Mouser.com has increased its revenue by two billion dollars in the last two years! What’s their success mantra? Why do customers keep going back to them? What are they investing in, to keep growing? Is India important for Mouser? Why? What’s next? Quite a few burning questions, which got answered when Yashasvini and Rahul from Electronics For You met Mark Burr-Lonnon, Senior Vice President of Global Sales and Service at Mouser Electronics, during his recent visit to India. Key extracts…
Q. How would you define Mouser’s unique strength for its customers?
A. Our strength is in offering the newest products and working with small- to medium-sized customers to help them grow by getting the latest technology into the hands of the engineers who need them. We define New Products as those which are within 48 months from release to market, which is about 25% of our total inventory. We also put a lot of time and effort to make sure we have the widest range of parts for all our suppliers. So, this is not about the value of inventory or depth of inventory, but the breadth of inventory. When engineers are looking for parts, they want to go to the one source where they have the optimum chance of finding as much as possible. Plus, we have a motto that says, “Always do the right thing.”
Q. Can you shed some more light on the motto and how you handle its execution?
A. Our order accuracy rate is very high, but there are times when our customers make mistakes or we make mistakes. We try to fix such mistakes. For example, if the customer has gotten something by mistake that can be returned/exchanged, then we’ll send them the right part. It’s really important when you’re dealing with a customer to do the right thing. If we look after someone, they come back. So, we do our best to do the right thing to help them come back.
Q. How do you handle promotion of brands that sell competing stuff via your website?
A. We have some big suppliers and some small suppliers. When it comes to marketing, we do more with the big suppliers, because that’s where most of the revenue comes from and they often have co-op dollars that they want to use. However, if we have a new technology, and it could be a very small supplier who may be supplying only four or five items, or it could be a supplier who we’ve just signed up, and they have a groundbreaking new technology—we promote it because it’s something that engineers are interested in knowing about.
Q. Do you list a product only when it’s there in your warehouse, or is there an opportunity or a service for which you are also pre-booking orders?
A. We do take orders before the product comes into the warehouse. We won’t promote it though. The day the inventory hits the warehouse, the button goes off, and the marketing machine then starts to get into action. It is listed on the website and on the search engines. So, when someone’s searching for it, they can immediately find it. There’s nothing worse than a customer who gets excited about a new product but can’t buy it. We promote it when we have it in stock.
Q. We hear that there is some major expansion happening at Mouser. Can you shed some light on it?
A. We’re building a new warehouse and doubling our warehouse capacity. Currently, we have about a million square feet of warehousing. This is a footprint of about 450,000 square feet, but it’s going to be a mezzanine with three levels, totaling over a million square feet when finished. So that’s going to double the components we can put in the warehouse. In our business, inventory is king. Even during the past 12 months, we were fortunate to double our inventory and we plan to continue doing that. We currently have as much in the warehouse as we have on order. Despite the recent supply-chain issues, we have managed to increase a lot of inventory. The one thing that drives our business more than anything else is inventory. We can’t sell what we don’t have. If we don’t have the inventory, the marketing doesn’t matter, because the marketing drives people to the inventory. If the inventory is not there, the marketing is a waste of time. So, we try to make sure that we have the inventory, only then we do the marketing.
Q. Do you have any kind of robotic system, or any new innovation, that’s coming or is already there in your warehouse?
A. In the current distribution centre, which we recently expanded, we have installed an “auto store.” It has a huge number of robots picking and moving parts; and we’re just beginning to see the benefits of that. We don’t have any real data on that yet. As a corporation, we’ve had TTI in Germany which has an auto store in place, and that’s working well for them. We’ve launched our auto store and filled it with products which are coming out now. We’ve put a huge amount of money into vertical lift modules (VLMs). We currently have 138 vertical lift modules—more than any other company in the world. When we finish the new expansion, we’ll probably double that. So, we’ll be, by far, the largest user of VLMs. It’s like a big filing cabinet, but it brings the inventory to the order pullers. The whole concept really is about trying to speed up the process of picking and the vertical lift modules are really good at doing that. We have all our fast-moving parts in there.
Q. What’s the benefit to your customers because of this level of automation?
A. The throughput time for us from the time we get an order to the time it’s ready to ship is about 15 minutes! Sometimes it’s so quick that some customers phone us half an hour later and say that they want to add another item to the order, and we have to tell them to place another order. Because it’s easier to do that than to add to the earlier order, which has already been boxed and is ready to ship.
Q. Is there any manual involvement in the entire warehousing operations?
A. Oh, yes—quality assurance and oversight. That’s the key involvement; to see that everything is running smoothly. Plus, handling of smaller quantity orders. We ship even a single component to a customer, and handling of such small quantities is still manual. We have over 1,400 employees in the distribution centre.
Q. What brings you to India? Is India doing better than expected, or does it need to do more to meet expectations?
A. We’ve got a large and growing team here. We have over 800 people in our Bangalore office. We have a back office doing lots of things for us corporately. We have a local sales team for India and our India business continues to grow strongly. I think we’ve got a good opportunity to grow it even more.
Q. Do the team members move out of the office, or do they remain at office to support?
A. My team, which is the sales and customer service team, is primarily in the office. They’re the customer service people. The manager goes to see some local customers to be sure where they need support. Overall, we have 850 people in India. We have the local India team here, and then we have the bigger global team that’s doing a fantastic job. There are also lots of product marketing people and web people who support our global organisation. Remember, Mouser has grown in the last two years by $2 billion. We could not have done that without India. With what we have in place here now, we’ve done that, and hired people. Hiring is probably one of the biggest issues anywhere in the world. If we tried to do all that in Texas, we wouldn’t be able to do it. The local presence here has really enabled our growth. Growing $2 billion in two years is tough. It puts a lot of stress on a business, but I don’t think our customers have really felt that – which is nice. Some days I wake up and wonder how we do it, but it’s because of everybody working together. We couldn’t have done it without the people in Bangalore, to be honest.
Q. How do you estimate the potential of a market like India, or any other geography which does not have much data, to figure out the targets and performance?
A. We look at a couple of things, including the dollars that are coming in, because that’s what pays the bills. The other thing that’s important to us is the number of customers. With our broad product and supplier base, we do a lot of marketing activities to be sure that we get the right products in front of the right people. We know what our customers are interested in, and we make sure that we send them relevant information—regardless of whether they’re in an EMS, telecommunications, or computer company.
Q. What is your next set of targets for India?
A. Well, when I look at the data, we’ve been very successful in South India. We’ve been less successful in West India. We think part of the reason is we don’t have people in the place to do that. Hence, we have recently launched a new office in Pune. We think that many people in the West are probably more likely to use Pune than Bangalore. Pune is our office number two; we’ll see how well it goes, before expanding further. Plus, we are working on making it easier for our customers to pay in Indian currency. Hope to share that good news soon.
Q. Can you clarify a little more about this—what’s expected to change?
A. People can pay with a credit card now, but they can’t pay in Indian rupees. We need to work through all the financial legalities, from a taxation standpoint. It’s a time-consuming process but we are making progress. Stay tuned. Once complete, it will be good news for the customers in India.
