1. Why has Murata recently reorganised its distribution network?
With the acquisition of the Datel and Newport Components businesses four years ago, it meant we had 50 distributors in Europe and that was difficult to manage effectively. There was some commonality in the USA and Asia, but in Europe it was unmanageable. So we took the decision that we needed to rationalise. We needed something that was attractive to our franchise partners.
So we knocked it down to 30 by the end of March 2011 and we will reduce it down to 20 by the end of March 2012. We believe we are constructing a network of strong multi-nationals and specialist distributors. We want to give our customers a wide choice of suppliers and a strong network of technical distributors that can support them technically as well as logistically.
2. What did you do at the Pilkington group and how different was it to working at Murata?
In that role, I was selling contact lenses and spectacle lenses as a field sales person. It was very interesting. Many of the things that were common then in that business are only now becoming normal in electronic components, such as consignment stock. If you wanted to sell into an optician, then consignment stock was the norm. They took the product for their stock and paid for it as they used it. This means you have to supply a bank of stock, invoice for it but only get paid when it sells.
Now this is quite common in the component business. Cashflow was quite problematic doing this in ophthalmics as you never knew when someone would come in for a particular type of contact lens. But you can manage it better in electronic components because you can get forecast information about what they are planning to build. This lets you manage inventory a lot better.
3. You are working with Powervation on developing a reference design for your 45A power block. What are the advantages of this kind of alliance?
We work with a lot of companies, particularly the IC companies, to get included on their reference designs. That means whenever they sell the product, we will be there and they will have a requirement for our products when they go to manufacturing. To do that, they have to have a high confidence in Murata and be sure we can meet their technical requirements, and they want to be sure that we are recognised for the quality of our product. They don’t want components to fail. And they want a global network and supply chain that can support their customers worldwide.
4. You list family history as one of your hobbies. What is the most interesting discovery in your own family history?
I traced back the Palmer family to the 1600s. They were in Wareham and basically clergymen and vicars in the church. Given my character these days, people find that quite amusing. They also had free entry into Oxford University and it is a shame that is still not available. I also found my father had a step brother that he didn’t know about, but I only discovered that after he died.
I also discovered there is a Palmer brewery in Wareham so it would be nice if we were related and I could get some free samples.
5. Why are German trade shows more successful than those in the UK and what can the UK do about that?
The main exhibition in Europe we do is Electronica in Germany. I think the popularity of trade shows there is to do with the strength and the breadth of the German market itself. There are a lot more companies involved in a broader application base than we have in the UK. There is a cultural thing too. The German people are more willing to invest their time. They are more open-minded to new innovations in electronics.
We have tried many things in the UK. We have Southern Electronics coming up just after Christmas. But I don’t think there is the appetite for them in the UK any more. They can get information from the internet so they feel they don’t need to invest time in going to exhibitions any more.