In economic terms, 2022 will go down in history as a year plagued by record inflation and ongoing supply chain disruptions. What challenges has this presented for Rutronik, and what opportunities need to be identified and exploited in equal measure? In this interview, Rutronik CEO Thomas Rudel answers these and other questions about the role and added value of distribution; something that is currently on the minds of many in the industry.
2022 is coming to an end. Can you give us an entrepreneur’s view of developments in the logistics and distribution industry?
Thomas Rudel: : Despite having the last month of the year still ahead of us, it is more than likely that semiconductor shortages and electronic component disruptions will continue to accompany us in some product areas over the coming months.
Is broadline distribution a competitive advantage?
Definitely! The situation shows once again how important the comprehensive skills of Rutronik’s experts truly are. It includes monitoring supply chains and getting the latest information on the production capacities of the 150 or so suppliers in our portfolio. This enables us, as a broadline distributor, to provide our partners with a clear understanding of the challenges and dependencies.
Further, we support our customers not only in terms of logistical solutions and through our technical expertise, but we also marry up our concepts for Rutronik System Solutions with the very latest developments. This is important if we want to continue to be successful together in tomorrow’s world.
You talk about Rutronik’s strategic orientation, which goes far beyond the procurement of components and parts and now also includes in-house system development. How did this transition from distributor to system partner come about?
As a distributor, the needs of our partners are at the heart of everything we do. We analyze what the market needs, which business sectors are losing importance due to current dynamics, such as the energy and mobility transition, and what potential this offers in terms of technical innovations and new business models for our customers. Beside flexibly adapting our product portfolio to these developments, we actively support transitions and act as a strong partner for our customers.
And what added value does Rutronik offer its customers exactly?
Our comprehensive value-added services are additional real advantages that set us apart from other distributors and direct sales via suppliers. This enables the design and construction of automated logistics systems that are tailored to bespoke customer needs and can be expanded with further additional services, such as customer-specific packaging solutions and industry-specific process standards.
We are also involved in the life cycle of a product from an early stage. With our individual in-house solutions, some of which are patented, we can make a decisive contribution to the success of our customers as early as the preliminary development phase, especially with regard to the time to market.
Which role does Rutronik System Solutions play?
The aim of Rutronik System Solutions is to make the preliminary development phase more efficient for our customers and to significantly accelerate the market launch. This shift toward becoming a system partner, with successful boards such as the recently launched Development Kit RDK2 and the Development Kit RDK3, which is on the verge of release, definitely creates additional added value that does not yet exist in this form on the market. These modular toolkits can be used to develop proof-of-concepts within a very short space of time. Moreover, it is possible to immediately create very specific use cases and applications and to test them without delay. And remember, all the components are available in Rutronik’s portfolio. The actual availability of these components stands, alongside other things, at the core of the new developments. I believe that design for availability will play a key role in the future. We support this efficiency and acceleration by increasingly regionalizing our organizational structure.
You refer to regionalization. Is this not the complete opposite to the trend toward ever-increasing globalization and internationalization?
I am positive that future success is only possible through the successful combination of global standardization and regional adaptation. The development of our markets is becoming increasingly dynamic, while supply chains and value creation are becoming more globalized. This also goes hand in hand with regionalization, which must be taken into account. For Rutronik, this means that we need to be globally networked and at the same time more strongly focused on our respective regional markets to be able to serve our customers even better.
That said, it is becoming increasingly difficult, if not impossible, to manage a company with more than 80 branch offices in over 40 countries on three continents from a central point in Ispringen. Moreover, who knows the regional requirements better than the local employees? Therefore, we have decided to strengthen our regional market presence by developing field application engineering and product marketing expertise within our local teams.
This allows us to create faster decision-making mechanisms, enable communication in the local language, and increase the availability of specialist staff. In addition, we pool the required skills where they are needed and can thus bring our technical expertise to more customers, in more markets, more swiftly.
Regionalization obviously ensures we are closer to local customers in the market and can better place products and contribute our technical know-how. In short, behind all our regionalization efforts and activities lies the principle of: Think global, act local. At the same time, this realignment enables the executive board and management team to focus even more on strategic development and to better adapt to medium and long-term market developments.
That leads nicely to my next question about the latest recruit to Rutronik’s executive management team. How did that come about?
At Rutronik, the executive management team is a “five-man team.” In addition to myself, there are Markus Krieg as Chief Marketing Officer and Dr. Gregor Sommer as Chief Financial Officer. About 18 months ago, Ramon Demelbauer joined us as Chief Sales Officer, with the particular task of expanding and developing our global sales network. Efficient and agile processes with a flexible organization are critical factors for the success of the entire business. Over the past almost 12 months, my colleague Frank Altrock has been supporting the transition to a matrix organization as Chief Operating Officer (COO). The five of us represent a strong team with many years of expertise and a wealth of experience to steer Rutronik’s fortunes, consistently and doggedly pursuing the course set, but always with a view to our long-term goals and success.
Does this also involve investing in new locations? What is the latest on expanding Rutronik’s international presence?
Our ultimate goal – together with our partners – is to ensure sustainable growth and profitable operations in order to continue to act as an independent, privately owned company. We are always on the lookout for promising locations that are important for the expansion of our international activities, and obviously with the aim of serving new markets as a reliable partner and ultimately strengthening our relationships with our existing customers. Last year, we opened new locations in Vietnam and Malaysia. We also recently relocated our head office in the USA from Texas to Florida. But our headquarters in Ispringen is also part of our global growth strategy with regard to staff expansion and development as we are an international company with strong local roots.
How do you combine being locally rooted and yet committed to international growth?
Throughout our almost 50 years, we have always taken well-considered steps with regard to further growth in order to be able to continue to act independently and to maintain a neutral position for our R&D activities and more than 40,000 customers within our network of suppliers and cooperation partners, such as universities and research institutions.
As a result of increasing globalization that began many years ago, we soon recognized that we can only maximize and further develop our strengths in the long term through international expansion. This also includes strengthening our position as an attractive employer. Further examples of this are guaranteeing secure jobs, further training opportunities for our employees, internal career paths, and the expansion of our teams.
What challenges do you see for Rutronik in 2023?
Rutronik always keeps a close eye on global markets. The European share of the global semiconductor market is less than 10%. Among the top ten suppliers in the global semiconductor market – accounting for around two-thirds of the total market – there are six US companies and only one European company, Infineon. We are very concerned about these developments and see considerable risks for Europe as a business location, especially in the high-tech sector. We are currently experiencing serious impacts on energy supplies and prices as a result of the war in Ukraine. We need to strengthen the European market and make ourselves more independent.
At the operational level, a look at some of the figures gives us a pretty good idea of what we, and above all our employees, achieve every day, and what challenges we face at various points in the company. Colleagues at the logistics center in Eisingen, for instance, perform roughly 13,000 picking tasks a day, shipping around 290 million articles to customers. Our customers can choose from 28 billion articles. I am always amazed by this outstanding commitment and enormously proud of our approximately 1,800 employees, who actively walk the path with us in times of growth and transition – in terms of Rutronik, as implied by my previous answers, but also with a view to economic and social developments.
source: RUTRONIKER 2022