Future Electronics Inc. isn’t an enigma. Not by a long shot. Many of the electronics components distributor’s suppliers and customers swear by it because it’s reputed for standing by them through the industry’s notorious boom and bust cycles and for offering design and engineering support critical to breaking into new markets and security design-wins. Others credit the Montreal-based company with helping them secure and manage required components through what they term “truly-bonded inventory” stock.
Yet, Future Electronics has had its fair share of controversies and myths about the company. Many of these, which won’t be repeated here, range from merely speculative and tantalizing to outright silly. Like any other areas of human endeavor, rumors and speculations abound in the electronics market and Future has been the target of these events since the company was founded by Robert Miller in 1968. (See: Getting to Know Future Electronics’ Robert Miller, Part Two and Getting to Know Future Electronics’ Robert Miller, Part One).
As Future marches towards its 50 anniversary, however, its position as one of the top components distributors in the industry appears solid. It has survived the industry’s consolidation in North America and by focusing on organic growth it has become a truly global player with services in various market segments in all key regions. The company is growing globally – sales topped $5 billion in the most recent fiscal year – and the management is talking about and exploring opportunities in Asia, Eastern Europe, North and South America and even in Africa, where Future has a presence in South Africa.
Yet, Future Electronics has confronted numerous changes since it was founded in 1968. The industry it serves has evolved and gone through wrenching consolidation at all levels; the OEM, EMS and supplier communities have expanded in certain parts of the globe (mainly Asia and South America) and shrunk elsewhere. Many of its once biggest customers have either disappeared, gobbled up by competitors, or have seen their market shares dwindle to a fraction of what they were once decades ago.
New customers have emerged, with similarly novel demand on the distribution partner and the larger supply chain. Furthermore, commoditization, a nasty scourge of the electronics business, continues to crimp margins at suppliers, forcing distributors to search for and evolve new ways to service them. The rate at which new components are being introduced has also accelerated with many of these going into new applications across multiple industries throughout the economy. This has meant increased opportunities as well as challenges for distributors.
The consolidation of the distribution market in North America sharply reduced the number of competitors in the sector just as electronics manufacturing was beginning to shift massively to the Asia Pacific region. In response to that evolution, all major distributors have fanned out to Asia where they now confront a horde of local competitors with varying levels of expertise matched only by their outsized hunger for a piece of the pie.
In this environment, companies like Future Electronics are distinguishing themselves with a wide range of services stretching from design support for engineers to traditional inventory services and other supply chain management activities. Over the years, Future has broadened its offerings to include a portfolio of services to specialized segments of the electronics industry; business divisions include Future Lighting Solutions, Future Energy Solutions, Future Display Solutions, Future Connectivity Solutions, Advanced Engineering Group and Supply Chain Solutions.
The Private vs. The Public
Partly because it is privately owned Future Electronics doesn’t discuss or announce its profits (gains or losses) revenue goals (hits or misses), management strategies, broad growth plans, pitfalls, challenges and opportunities or any of the thousands of other issues publicly traded companies trot out to shareholders on a quarterly basis. Interviews with executives at the company indicate they believe the company’s status as a privately owned enterprise enables them to provide a higher level of support to suppliers and customers without checking first with investors and analysts.
A recent visit to Future Electronics served to reinforce the impression of an organization focused and built on a constant search for the optimal ways to service dozens of component suppliers and tens of thousands of OEM and EMS customers globally. As it turns out the key to understanding what drives Future electronics is indeed quite simply. The suppliers and customers are at the core of everything the company does, followed by an unflinching loyalty to employees and a driving sense of using the company to serve a larger goal championed by owner Robert Miller.
“We provide the highest level of service in the industry because it’s good for the customers,” said Miller in an interview. “Also, the relationship we have with our suppliers is one of the best in the world. It’s not what they can do to help us but what we can do to help them.”
To understand Future Electronics and remove the mystique about the company’s operation, its focus, structure and driving principle, it helps greatly to know a bit more about Miller, whose personal experiences and vision have not only shaped the company but also a large swathe of the electronics industry. As Miller said in a rarely granted interview, Future Electronics is the product of and the tool for achieving certain goals he set for himself decades ago. If Future is about top-level service, Miller himself is all about Future and his commitment to making it a better company and thereby generating the returns he needs to help others.
“My dream on the business side is to be able to continue to help our customers,” Miller said. “People grow up and decide what they want to do the rest of their lives and for me the dream was to be able to help in whatever capacity I find myself. The better the company performed the better my opportunity to achieve this dream.”
The core of that vision, which Miller doesn’t talk much about – preferring instead for his actions to show it – has been to make a difference in the lives of everyone he comes into contact with. Future Electronics is helping in many ways to make that dream come true not just in Canada but in many other global centers where the company has a presence and even in a handful of countries where it doesn’t.
That may sound like a strange goal for an enterprise but it makes perfect sense for Miller. From a fast-growing industrial location just outside of Montreal, Future Electronics partners with thousands of customers and suppliers worldwide, winning their trust and businesses by investing in the capabilities that foster growth across their joint operations.
Many of Future Electronics’ suppliers swear by the company. And, former employees, including those that have moved on to senior positions at competitors, credit Miller with instilling in them the knowledge and work ethics that have helped them in their careers. A letter written to Miller by a former Future global account manager who joined an electronics manufacturing services (EMS) provider in a senior executive position is typical of the kind of reverence some current and former employees have for the company’s owner. Excerpts from the letter follow:
By now, I know you are aware of my departure from Future. With my skill set and also the network of people I have come in contact with over my electronic sales career, I feel like I can make a real difference.
I cannot tell you how much I have appreciated the last four years at Future. I was well educated about distribution, an area where I was once a neophyte but [in which] I am now schooled by the best in the business, Future.
On the personal front, Mr. Miller, I could write a book on your humility, intelligence, compassion, generosity, kindness, selflessness, leadership and success. Very few times in life do you get to meet and work for a person like you.
The sentiments expressed in the letter excerpted above are shared by many Future employees. Many of Future’s suppliers too say they are guaranteed the best support by the components distributor. The company’s management said they continue to demonstrate their willingness to support suppliers and customers by building technology infrastructure and systems that facilitate the achievement of shared goals.
As part of this strategy, the company spent millions of dollars on a global technology platform managed from Montreal but which links all of its assets globally and those of suppliers. Future’s international sales support team provides services to suppliers and customers in 26 different languages while sales teams are constantly on the road, visiting OEMs and suppliers and learning more about their operations, challenges and helping them create new opportunities, according to Lindsley Ruth, vice president and member of Future’s senior management team.
A new automated distribution center built in Leipzig, Germany, close to a DHL facility facilitates the company’s distribution efforts, helping it get components out to customers quickly and on time. Future has also invested in additional system design centers to “help customers with their design needs,” according to Tracey Sutherland, sales training manager. “They’ll do testing and design for customers as needed.”
That’s the Future Electronics differentiation strategy. But what lies ahead for the company? Will it continue as a standalone, privately owned enterprise or, as Miller gets older, will it become an acquisition target to be folded into the warm and eager embrace of one of its bigger rivals? These are questions Future’s management wouldn’t comment upon. In fact, the idea of Miller not being at the head of the company he founded nearly 50 years ago is possibly a frightening one for the senior executives.
“He will be here for a long time and well into the future,” Ruth insisted. That’s a wish shared by many Future customers.