Resources and Relationships
Employees
Premier Farnell is a high service business, driving a high performance culture. With 99.6% of all orders delivered the same or next day, consistent high performance and service excellence is essential.
For two consecutive years Premier Farnell has conducted an all-employee survey, Your Voice, in order to evaluate employee engagement and give all employees an opportunity to share insight into what it is like to work for Premier Farnell and where we can improve. Based on the feedback received, there are four areas where employees told us we could do better – Leadership Development, Personal Development, Innovation and Customer Focus.
Leadership development and succession planning are critical for consistent and ongoing high performance. Premier Farnell has a well embedded process to meet with business leaders every six months in order to review what we are doing and ensure that appropriate succession plans and bench strength are in place. Additionally, these reviews are supplemented by regular meetings throughout the year attended by the CEO, CFO, COO and Global HR Director to review talent throughout the Group and ensure that people plans are appropriately aligned to the strengths and weaknesses of our current and future leaders.
In order to further strengthen our leaders we have begun a programme of 360 degree feedback, where select employees from every level in the Group are asked to comment on the performance of their leader. 360 degree feedback allows employees to give real feedback to their managers and gives managers a better sense of their performance and more importantly how it impacts employees. We also have a well embedded mentor programme that informally matches senior business leaders with talented performers in order to help them navigate the organisation and nurture their potential growth. This programme has been so successful that we now have plans in place to extend it deeper into the organisation as part of our commitment to personal development of all employees.
Attracting talented people and retaining the talent we have in the Group is of the utmost importance for continued success. Our commitment to personal development is unwavering. All employees meet with their managers at least every six months to review performance and talk about career aspirations, which are included in an aspirational development plan. Employees are then encouraged to take one hour a week for personal development. This time is used in a variety of ways including attending sales training in order to become a more effective seller, job shadowing a role related to aspirational development or studying modules in our Online Learning Centre. Capability ladders have also been created for certain functions; these ladders are used by employees in order to understand what they need and how they can target their own personal development for career progression. These ladders have been so popular that they will be expanded for additional functions.
eLife, a Group initiative, was created in order to encourage employees to embrace the web and improve innovation. Through eLife we have introduced an online performance management and objective setting tool that gives employees and managers access to their performance reviews and objectives year round. We have also worked to further embed the idea of innovation in the business this year with the development of an innovation exchange. The innovation exchange is a cross-functional, global forum in which participation changes every quarter. The exchange participants evaluate suggestions submitted from around the business and where relevant begin the process of developing the innovation. We have also created innovation teams that unite talented performers into cross-functional, global groups with a focus on projects that sit outside of their daily scope and stretch their capabilities.
One such innovation team is driving improved customer focus across the business. This is the final area where employees told us we needed to get better and this team of talented performers are ensuring that customers are at the heart of everything we do. Every employee across the business has an objective related to customers and throughout the year, each employee will interact with at least one customer, further embedding our customer commitment and high service culture. This initiative will be extended to the Board of Directors who have committed to spending time in one of our distribution facilities picking a perfect order for one of our customers during the year.
Market position and reputation
The Marketing and Distribution Division trades through several major brands including Farnell and Newark. As their product portfolios and customer bases are diverse, the precise market positions of these brands are hard to quantify. The roots of these major brands are all over 70 years old and have high recognition and prominence within their particular markets. They are true multi-channel operations with online and paper-based product information, marketing programmes and relationship management. The success of these programmes within their key market segments, as well as their brand reputations, is reviewed through regular market surveys.
Customer relationships
The MDD businesses have a customer base comprised of some 2,000,000 customer contacts. Contacts are typically electronic design engineers, production and maintenance engineers or procurement specialists. They represent a diverse spectrum of private and public organisations, covering 156 industries and areas of commerce. No single customer represents more than 2% of Group sales.
The Group has Customer Relationship Management (CRM) systems within its key MDD businesses. These are adding to a growing understanding of customers’ needs and enabling the business to offer specific customers the services that they most value. The Group also has a suite of web diagnostic tools which improves our understanding of customers’ web technology needs, product preferences and provides a unique insight into the ways in which customers work.
The MDD businesses manage relationships with customers through multiple channels including websites, catalogues and conversations with customers, both by phone and face-to-face.
Supplier relationships
The MDD businesses work with over 2,500 suppliers, stock approximately 400,000 products, and offer access to more than 4,000,000 other products. The Division’s attraction to suppliers is directly related to its ability to seed new products to market and drive customer acquisition across its global customer base, using multi-channel solutions-based technology marketing.
The supplier base is balanced to offer customers around the globe a breadth of products from many different suppliers, while also offering deeper product ranges from some key suppliers with whom the Division has strategic alliances and improved commercial terms.
Across Farnell and Newark, the portfolio of suppliers is managed by an international team. The largest suppliers within this portfolio include many global premium brands for whom integrated, go to market strategies are developed. During the year, the Division continued to build its proposition to design engineers, securing new distribution agreements with 40 suppliers to fill technology gaps. Many of these new suppliers develop new, emerging technologies that are in very high demand from EDE customers. Additionally, the Division secured territorial extensions with existing suppliers to support our emerging businesses in Asia Pacific and Eastern Europe.
Elsewhere within the Division, supplier relationships are managed at a business level, enabling specific customer needs to be met by sourcing, for example, locally branded products, or value-brand products from Asia.
Distribution network and inventory
The Marketing and Distribution Division has sales offices in 23 countries. These are supported by a network of distribution centres that enable the Division to ship products anywhere in the world within one to three days. 99.6% all orders are dispatched on the day they are placed and received the next day.
The network is comprised of seven primary distribution centres:
US – Gaffney (South Carolina) and Springboro (Ohio)
UK – Leeds and Preston
Mainland Europe – Liège (Belgium)
Asia – Singapore
Australia – Sydney
These are supplemented by satellite warehouses in other locations including Mexico, Brazil and China. Collectively, this network handles an average of 20,000 orders per day and stocks some 400,000 products. Technology systems are therefore central to delivering high service. The network is managed by a global supply chain team that shares best practice between locations and drives a programme of continuous improvement in accuracy, efficiency and service.
At the year end the Group held £194.3 million of inventory in its businesses, of which £171.2 million was in the MDD businesses.
Inventory is managed on a line-by-line basis, utilising best in class forecasting and stock monitoring IT systems. The re-ordering of most products is automated, enabling purchasing teams to manage order quantity, delivery or demand exceptions. Order fill rates are among the highest in the industry, in line with the Group’s commitment to service excellence. The Division aims to increase stock turns through the use of ever more intelligent systems, seamless supply chain integration with suppliers, and elimination of any non-moving stocks.
The Division uses a variety of third-party carriers to ship orders. It has a strategic relationship with UPS, its principal carrier, responsible for approximately two-thirds of its worldwide deliveries each day.