Group Sales Director
The continuing globalisation and the importance of connectivity in our business to support our customers has never been more evident than during this year
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We have continued the theme of 'it is all about the opportunities ahead'. The continuing globalisation and the importance of connectivity in our business to support our customers has never been more evident than during this year.
60% of our revenue comes from the 40+ multinational OEMs we service. We have positioned ourselves to support them by meeting their criteria of having a global footprint, high quality manufacturing in lower cost countries, being financially stable and providing technical and design support. Together with our logistical capabilities and a zero-defect philosophy, we have a winning combination that qualifies us as an outstanding Full Service Provider.
The changing and exacting requirements of our customers has focused us on meeting their expectations. We regularly complete customer questionnaires and audit documents. Being able to tick their boxes with confidence ensures that we go to the next stage of commercial negotiations with relative ease. The requirements of a small SME compared to a global automotive Tier 1 obviously differ, because of this we have structured our business to ensure we can effectively support all of our customers with a service package that meets their individual needs.
Pre-emptively responding to new legislation on subjects such as conflict minerals is the norm at TR. We have taken the attitude that we must embrace changes and adopt them at an early stage to ensure that, when asked by customers, we are able to respond swiftly and provide the best solutions. It is a huge relief to customers when they find that we already have the subject covered and are able to assist. This was true of the REACh Directive and no doubt new demands will surface that we will treat in the same way.
Every day there is a constant stream of people using our website to contact us for support. These requests are quickly filtered through to the TR personnel in the relevant countries so that we can speedily service their requests, whether it is of a technical nature or an enquiry. A high percentage are engineers needing product assistance or to download specifications or drawings. We are seeing a steady increase in such traffic which we expect to accelerate when the new, updated website is launched later this year.
We intend for this to become the preferred 'go to' solution for engineers and specifiers across our core sectors: automotive, electronics/telecoms and domestic appliances.
Servicing of SMEs is generally managed through TR Direct in three locations in the UK. The stock range of our own TR proprietary branded parts and core standard products are centrally located and distributed. This ensures a wide variety of products are readily available for immediate despatch. Dedicated teams used to managing transactional daily business and fast moving service requirements are supported by a telemarketing team who are in very regular contact.
We are also successful in selling TR proprietary products to other distributors both in the UK and Europe. We value their business and our teams have built up a great rapport, with almost no conflicts with the multinational OEM side of the business. We have 27 master distributors in these regions and this ensures we still can capture sales in areas such as Israel, Portugal, Finland, Bulgaria and Russia even if we do not have any TR locations in the region.
The larger single site customers and multinationals represent the largest part of our business. Their requirements vary considerably and often require specific, tailored logistic solutions and technical sales support that we are able to provide. A 'one size fits all' approach would rarely satisfy their differing requirements. Site surveys are conducted by our logistic teams and, in conjunction with the customers' teams, we are able to make a proposal for the right solution for our customers. Most multinational OEMs require a lean build approach to keep stock and costs low and our systems meet their criteria.
Once these systems are in place with the fasteners and category 'C' parts, we are invariably asked to either help customers resource away from other current vendors in order to reduce the number of companies servicing them on site, to assist in developing resource programmes or to offer alternative products to reduce in place and overall costs. Our product range is therefore extensive, growing every day and maintaining good quality is vital. We ensure we are able to do this by sourcing about 30% of product sold from our own quality managed manufacturing and keeping strict control of the suppliers we use.
The multinational accounts that we service globally are all structured differently. They require suppliers to have an international footprint, with senior teams in position that can work together at a global level with their corporate teams. At TR, we established our global strategic team over 14 years ago and this has been further segmented into dedicated teams to individually support the automotive, electronics/telecoms, and domestic appliances sectors. We meet with customer commodity teams and receive enquiries from central purchasing locations, not individual sites. Sourcing boards usually meet weekly and they examine these quotations and take a holistic view of the service offered and on that basis they award their business. Having close contact with these decision makers is vitally important to TR. Design headquarters are often in the UK, Europe and North America, but the production facilities could be anywhere in the world so the connectivity of our team with theirs is paramount. Though each of these core sectors has different product ranges and supply criteria, we are now getting requests from electronics/telecoms companies with the same demanding process and product requirements as automotive companies. There is a huge drive taking place at our customers to ensure product quality and a robust supply chain is in place, as failure in either of these is a costly business.
We have had recent success through focusing our attention on the automotive multinational Tier 1s, the exception being PSEP in Malaysia who historically deal directly with the OEMs. Going through the process of being accepted onto their approved vendor list is essential, before striving to become a 'preferred vendor' as the next stage, which we have achieved in most of the key players. This ensures we receive sales enquiries and we have a very good conversion rate of enquiries to orders, which is reflected in our sales figures. This is worked both at a strategic level and at a local level where TR application engineers play a key role in the design centres and manufacturing sites. The automotive sector represents 31% of the Group turnover and is growing rapidly. We are penetrating more sites of existing customers on a global basis, experiencing platform builds on one continent transferring to three continents where we are able to quickly respond due to our global presence — providing the required product, systems and processes to grow customer revenue. Having a global parts database and enquiry log enables us to cooperate as a business across all of our key disciplines (e.g. sales, quality, engineering, sourcing and manufacturing). This model is replicated in electronics/ telecoms and with the major domestic appliances companies. It is a winning formula that we are further enhancing.
The electronics/telecoms sector differs from automotive in one particular aspect as products in this sector may only have a life cycle of 12 to 18 months, while in automotive the product is stable for the life of a build, which is six years on average. Within telecoms, discussions are already taking place on designs incorporating 5G and every time they upgrade new equipment, new parts are specified. This is a sector in which we have expertise and have experienced good growth within the last financial year. The electronics market is buoyant again and we have experienced new wins, particularly through working closely with designers. Additionally, many of these large electronics multinational OEMs and their subcontract manufacturers have a sealed vendor base limiting the vendors that they work with. So on new projects, where they have a need for a specific item, they will come to us to help source and service the part.
TR UK Managing Director
We have had sizeable wins on new programmes that have six year life spans
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The UK business has seen steady growth in the year under review and the diversity of customers ensures that we have no heavy dependence on one sector. Automotive is 29% of the turnover, which is mainly due to the work we do for the Tier 1s that support Jaguar Land Rover, Nissan, Honda and Toyota. We have had sizeable wins on new programmes that have six year life spans which will fill the pipeline up for the coming years. The rest of the UK turnover is very evenly balanced and growing at a similar rate to automotive.
The sales teams have a good balance of business development managers working on new business, product managers working on development and application engineers working closely with the customers' design and prototype teams.
TR Europe Managing Director
In the new financial year we will be extending Hungary's role into automotive
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Within Europe, our hubs in Sweden, Holland and Hungary have all performed well. Norway has had a tougher time due to the downturn in production in oil and gas, but they have been recovering their position since January 2015. Sweden and Holland enjoy a high percentage of our automotive business due to their close proximity to major car plants and the Tier 1s that supply them. Hungary, on the other hand, has a strong presence in telecoms and business machines and has also had a good year. The team are maturing and have serviced their existing customers very well, with experienced staff in position. In the new financial year we will be extending Hungary's role into automotive as the car manufacturing plants are moving to Eastern Europe, where the cost base is much lower.
The acquisition of VIC has significantly increased the domestic appliances sector sales as a percentage of our Group revenue, which now stands at 19%, marginally behind electronics/telecoms. It will be interesting to see if this overtakes and becomes our number two sector. Having screw manufacturing within the Group in Europe has been well received by customers. VIC's product range is extensive and they have also developed innovative moulded products and solved some design and cost issues for many of the major companies in that industry.
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TR Fastenings Inc Operations Director
The business was refocused towards the multinational OEMs
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The USA operation was restructured two years ago and re-located to Houston. The business was refocused towards the multinational OEMs that we service elsewhere in the world. The USA is of strategic importance because of the influence of the design centres in the USA and due to the headquarters of many of the companies we work with being based there. We have recruited and trained staff to support this change of direction and with good management and support from the global teams they have had a very good year. The pipeline of new business wins already on the books ensures that they will enjoy another year of solid growth.
TR Asia Managing Director
The Asian sites have had a good year, with Singapore and SFE in Taiwan doing very well
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The Asian sites have had a good year, with Singapore and SFE in Taiwan doing very well. China has recovered sales back to the levels of pre-recession, and they have received automotive success as platform builds have been replicated from the UK to Shanghai.
PSEP has had a steady year and will, this year, enjoy the fruit of development work that they have already put in with some major automotive OEMs on complex engine components.
Areas of focus for the current year are opportunities in Thailand, Mexico, Spain, Hungary and China, mainly on automotive business development. Thailand has a burgeoning economy and we now have a legal entity there, with a young, enthusiastic team being trained and supported by the Group to capitalise on this opportunity.
We have just completed one of the most interesting, demanding and exciting years in sales in our history. We have seen many of the plans we have made executed successfully and are now delivering tangible results for both Trifast and our customer base. We have a solid foundation and strategies in place to enter the new financial year with confidence.