The last pick of the National Football League draft is called Mr. Irrelevant. Becoming irrelevant seems to be somewhat of a norm in electronics. Washington Irving wrote a short story in 1819 about a man who went up into the Catskill Mountains and fell asleep only to return 20 years later and realize how much the world had changed.
Today’s fast pace of development makes things obsolete and irrelevant much sooner. Just five years ago, Rip Van Winkle could have dropped off his Kodak film to be developed at the pharmacy, and then walked next door to rent a movie at Blockbuster while talking on his Motorola flip phone. Today, our kids take a picture, post it on Instagram while downloading a movie from iTunes all while face timing or skyping with their best friends.
Maps, encyclopedias, phone books, house telephones... These things have all become irrelevant. So have many of our competitors. At Future Electronics, we do not want to become the next Mr. Irrelevant. So how do we stay relevant? We deliver value, great service, continuously innovate and we put the customer first.
However, the changing landscape of the electronics industry means you must put as great a priority on adapting to the changing times as you do on delivering great service and great products. To survive in this space, one must have innovation at its core. If not, it is highly likely you will end up as road kill on the electronics highway and get eaten.
We are at an inflection point in our industry. The 1990s saw companies like Dell and Intel prosper as one billion people connected to the internet via PCs and laptops. Then, the 2000s brought another 2 billion to the internet via mobile devices and the likes of Qualcomm, Samsung, Apple and others won big. We are now in phase three known as the Internet of Things. Goldman Sachs recently projected an additional 28 billion devices will be connected to the internet in the coming years. And I assure you, Future Electronics will continue to be there.
Wearables, cars, homes, cities and industrial applications (transportation, health care, oil and gas) … are all opportunities for connectivity. Businesses developed on napkins, not even created yet, will emerge with new products dominating new markets. This will touch virtually every market and all aspects of our lives. Mobile phones are acting as remote controls. Wi-Fi everywhere will help keep costs down with components being less expensive, processing times faster and lower bandwidth costs. And again, Future Electronics will continue to be there.
There will be such a thing as the Connected Home. A home network connecting appliances, vehicles, computers, phones, tablets, TV, lights, doors and even your pets will become standard. We will soon need home consultants for the IoT. Of course, many of us already have these today. We call them kids.
Future is fortunate to be in the position we are today. We have zero debt. We have the best distribution centers in the world. We are the acknowledged service leader in the industry. Future is investing. We aren’t just trying to be a better distribution company. We have never been as healthy or as strong as we are today. There is a HUGE advantage in being a private company. Because of it, we can invest in opportunities, take risks, go faster, innovate, change, adjust and improve.
Unlike others who have one bottom line and that is profit. We have a triple bottom line – people, profit and planet. Some companies sacrifice people to save the numbers, whereas Future sacrifices the numbers to save the people. Where would you rather work? You cannot provide great service when your people are not happy, and it is tough to have happy people when jobs are being eliminated every quarter. Cutting jobs to achieve success has never been a recipe for sustained success.
At Future, we don’t fear risks. We manage them. We will give any customer who is creditworthy a minimum of 180 days to pay assuming they are willing to make a commitment. Nobody else offers this in our industry. We invested in solid state lighting in 2001 when nobody else would invest in distribution. The bottom line is we see opportunity where others see risk!
Holding lots of available to sell inventory is an opportunity for us. We don’t view it as a risk because it all boils down to service. Why do buyers get in trouble? They fail to eliminate risk. Two types of risk. How hard is it to find parts? How hard is it to get rid of what you don’t need? In other words, you have too little or too much product. The key is getting it just right. How do you do that? You buy from Future.
What is the most expensive part on a board? The one the customer doesn’t have. Inventory matters. Service matters. Service is most important usually when we don’t feel we are getting good service. Otherwise, service is often taken for granted. We don’t take it for granted. We make it a way of life. Security of supply, OTD and flexibility are part of our core. Consider these as key aspects of our no-cost supply chain insurance policy.
They teach us history in school so we can learn from the past, but make no mistake; we are living in the Future. We consider ourselves to be a 2014 HD Version of the old Future. To be honest, this required some of our people to go through the mental carwash in order to wipe away complacency and replace it with a clean fresh start. It begins with prioritizing how we can help our customer and supplier partners. There is not a single customer or supplier anywhere in the world where we can’t find an opportunity to work together.
We believe in telling it like it is and tonight I’ll share with you that not everything is perfect and there are a few areas we still need to address. We have to continue to look for ways to become more efficient as well as take our service to the next level. One of our key goals is to simplify complexity. This past year we decided to implement the “straight talk” program. What is that? It is simply being candid and upfront about reality, and not a Rubik’s cube of information. We are now sharing a lot more information about our company, our strategies, and our challenges with our partners. We appreciate how much more can be achieved with straight communication and a set of common goals.
One area where we could use the help of our suppliers is ship and debits. They add costs to the supply chain. The process has become way too complicated. This must change. Quoting has become a huge cost of doing business. We need a refined process. An updated approach. We need to make it easier for all parties involved. When we make it easier to do business, we can then focus on what matters most. For our customers it is helping them become more profitable and winning business. For our suppliers it is about bringing profitable incremental NEW business. For our employees it is about creating a special workplace where you can make a difference.
If you think you are too small to make a difference, try driving in a car with a fly inside. We want Future Electronics to be an experience, and not just a career. We want to be recognized as the best place to work.
This article was excerpted from a speech delivered in October by Lindsley Ruth, executive vice president and a member of the president’s office at Future Electronics Inc., during a celebration marking the 10th Anniversary of the company’s Memphis Area Distribution Center.