CEO Blog | Jarltech.com

CEO Blog

16/05/2011

Market Share Sugarcoat

When sales shrink, you can always argue "But we gained significant market share"....

When sales shrink, you can always argue "But we gained significant market share". That implies that one quarter was bad, but that for the competition it was even worse. And no one can prove it, because most competitors are not listed on the stock exchange.

One of our American competitors recently said this sentence during an analyst's conference... without first checking to see that we had grown approximately 30% in the same quarter. They should have known that; it would have only taken an inquiry to the manufacturers. But, we do not take pleasure in another's misfortune, so we will not pass our figures on to the analysts. Let the guys and gals in the US feel safe for now. At least until it is so obvious that it should be admitted... :)

02/05/2011

Gloating is not a good strategy

Just now a direct competitor of ours called me, because he wishes to buy something from us......

Just now a direct competitor of ours called me, because he wishes to buy something from us... that which we have on stock, and that which the manufacturer can only deliver in eight weeks again. My spontaneous answer was: "No". The reasoning behind this was that the same competitor let us down on a similar question not too long ago, and not so much because of strategic thinking.

Several have tried to keep only the top sellers on stock, and to help themselves to the rest from our warehouse. Ok, on the one hand I have enough of the product there. But it could also be the case that the supposed important regular customer (for which my competitor is trying his best to find the goods with us) makes a purchase, thinks Jarltech is really good, and we woo away a good dealer. Or, he cannot find us, the world will come to an end tomorrow, and we will have to sit on our stock forever. Throw into the mix that you undoubtedly meet each other now and again at manufacturers' events, and the colleague ends up spilling his wine on my shoes.

An alternative would have been a sale at "recommended retail price": Jarltech would have earned a great deal on it, and the competition would have paid on top of it. But, tell me, what is the good of gloating versus strategy?

18/04/2011

Phone alert

Today, Jarltech experienced the Stone Age: our lines were dead. All of them were dead; the multiplexer, the burglar and fire alarm systems....

Today, Jarltech experienced the Stone Age: our lines were dead. All of them were dead; the multiplexer, the burglar and fire alarm systems. Arcor (a German telecommunications provider) had a 'major breakdown'. But the Internet was working - and one can almost say: as long as the internet works, we can do without the telephone.

How good that we invested into a second installation from Alcatel, which is connected with the Telekom and independent from Arcor, and which switches automatically in case of failures. No, they don't share the 'last mile', the landlines lead to different directions from our premises. However, the automatic switch didn't work and trying manually was a disaster: no communication; even the Telekom wasn't broadcasting anymore.

We found out why: they share the local distribution frame, and that was ... broken. I thank our employees, who immediately posted their mobile phone numbers online, so that customers and suppliers could call us.

Anyway, we will need to find a better emergency solution now. Having two companies that back up each other, but use the same distribution frame is just nonsense.

09/04/2011

Why we develop our own ERP software

When I tell customers or suppliers that we use our own enterprice software, they look at me with big eyes....

When I tell customers or suppliers that we use our own enterprice software, they look at me with big eyes. In a group of 110 employees, they were expecting SAP or Navision. No, we do not have either one, and with a very good reason too. Ever since I started 20 years ago, I always wrote my own assets software, at the beginning under dBase II. (I just realized, that Word's spell checker does not know the word "dBase" anymore.) :) Now we have a team of three programmers, who work on our "Webfaktura". Not only does the manpower cost money, but the software must be certified every year by a special public accountant. Despite this, I believe that this software is a real unique feature, which differentiates us from the competition.

If the boss of Jarltech comes up with the idea to write a blog, and in two languages (the English texts are added by our translator), and electively with a Twitter function and Spam filter for the answers, then it will be up and running on the same day. Or a change-over from DPD to UPS, a warehouse layout system, a conference room availability plan, or, or, or. Our Webfaktura, in addition to working in German and English, also works in Chinese.

But even more important than the speed is the new roll of the distributor between the manufacturer and the re-seller. Both want to know things from the other, and to communicate with the other, but the software packages do not understand each other. Enter us, the interface between the two. Truthfully, when a customer decides to make future purchases with us, I simply cannot allow a programming order to be buried for weeks - I want my sales now.

Or try to become a distributor for HP - the interlocking of the computer system is a real Herculean feat. But I am sure that we will master it faster than if we had to first explain to an external company how it works. The same applies for customer requests. A customer had the brilliant idea of scanning his letterhead for us, so that we could print packing slip receipts for third-party goods on his letterhead. Great idea, and just like that, we are doing this for all of our customers, with packing slip receipts in all the important languages.

In order to evalute our software financially, we sent the current requirements specifications to a manufacturer for standard assets software. We asked them to compose their modules in this fashion and to amend it, so that it works for us worldwide. Result: Roughly 700,000 euros, including a few months of migration phase. Of course, this sum has also been invested into the software, but we can set the priorities for its enhancements every day. Our employees have a tool for offering suggestions for improvement, which will then be implemented. There are still hundreds of them, some of which go into great detail. But: it makes the sales and execution faster, plus simpler for the customers.

My IT professor buddy told me once that practically mid-sized businesses stopped individualizing large software packages. Instead, the sales process is simply adapted to standard software, which is often less expensive. Ok, but I think that our company differentiates itself from other companies through its methods of operation, and I do not want to lose that. When all is said and done, and all the companies have adapted to the three large software packages, then they will finally be working alike. . .

01/04/2011

Computer Week from 1979

Here is a link to the Computerwoche (»Computer Week«) archive, about the introduction of barcodes and NCR POS systems at Tengelmann (German supermarket chain)....

Here is a link to the Computerwoche (»Computer Week«) archive, about the introduction of barcodes and NCR POS systems at Tengelmann (German supermarket chain). Really funny, especially the prices (only in german, though):

Computerwoche 1979

31/03/2011

Q1: Jarltech Continues its European Growth

Just wanted to share a few numbers from my company: The first quarter is over - and our company news is positive: roughly 25% growth of Jarltech Europe GmbH compared...

Just wanted to share a few numbers from my company: The first quarter is over - and our company news is positive: roughly 25% growth of Jarltech Europe GmbH compared to Q1 of last year, about 60% in Jarltech Austria GmbH, and 20% in Jarltech UK Ltd. And this, despite the fact that we also showed similar quarterly growth last year, meaning the economic crisis did not affect Jarltech. The German central warehouse shipped goods valued at 7.5 million euros in March alone.

It is also nice that the growth is not only coming from our new markets (such as Denmark, Poland and Spain, for example), but also that German and Austrian sales are continually increasing.

We are proud to be able to create new jobs, thanks to these favorable conditions. At the end of 2010, the group employed 107 people (65 of which are in Usingen); now we are up to 112 - and there are quite a number of open positions, for trainees too.

21/03/2011

Doing big business with the Japanese catastrophe?

Two of our competitors had an idea: one donates a few cents to Japanese relief organizations for each Taiwanese scanner that is sold....

Two of our competitors had an idea: one donates a few cents to Japanese relief organizations for each Taiwanese scanner that is sold. The other sends an email to his customers, recommending urgent product bunkering, because prices must soon be raised, due to expected product shortage. Ok, now tell the truth: this sort of deal is not only embarassing, but repugnant. Of course every businessman needs to think about the effects of the catastrophe on his business. We even had an emergency Sunday meeting about Japan. We always have a plan ready for the scenario that Taiwan gets destroyed in an earthquake; that is a part of our business. But does that mean that the same tactics should be used to make a quick buck in Japan?

Good examples of how to handle such catastrophes come from manufacturers like Epson, Citizen or Fujitsu. They immediately and openly informed their partners about the situation of their personnel (thankfully, there was no direct damage) and their production facilities (also no problem). We have passed along this information to concerned customers, and hope that the situation does not deteriorate. Epson, a Japanese company, triggered direct relief aid to the tune of a million euros.

Of course, you can be sure that business groups will ask that Japanese goods be tested for radioactivity. The motivation here is obvious - who wants to take a chance? Whether it turns out to be feasible is yet to be seen. When I go through our warehouse and look at the goods from Japanese manufacturers, I only see boxes with "Made in China" printed on them.

11/03/2011

Credit Limits: Drop your pants!

For many years now we have been sending our financial figures not only to our banks, but also proactively to all German credit bureaus....

For many years now we have been sending our financial figures not only to our banks, but also proactively to all German credit bureaus. This means that some suppliers (who do not have loan insurance) have access to our figures. I do not have a problem with this - sooner or later the financial framework needs to made public in the Electronic Federal Gazette. And above all: we need a good rating with the banks, insurance companies and suppliers. It is a natural procedure - I wish to take a loan, therefore, I need to "drop my pants" so to speak.

This awareness has not yet sunk in with some customers. We have been working with the German Factoring Bank for more than a decade now, and they are very generous with our credit limits. We owe this to the credit agency, and of course, to our financial figures. If this does not work, we ask our customers to send their current figures directly to the Factoring Bank, resulting in establisment of a credit limit. But unfortunately you often hear "I won't give my figures to a foreign bank". I believe this idea belongs in the Stone Age. You also often hear "But your competitor XX gives us XX credit." Ok, even then customers should be interested in having 2 credit limits with 2 suppliers, as this would be an advantage during delivery bottlenecks.

As is often the case, non-transparent companies have other problems. If we take on the credit risk of a couple thousand euros and ask them to "Please pay three times within the credit period, and at the very latest then you will receive a limit from the Factoring Bank." it still mostly does not work. As a last measure we have acted as a guarantor with a loan guarantee via the General Manager. Up to now the people who have refused to sign are the ones who previously said "My company cannot go broke, because. . . " even though they do not really believe their own words.

Oh, by the way: We do not even need the financial figures for ourselves; just for the bank, which then has to declare them secretive. Our experience has been: credit yes or no, and clarify further questions directly with the customer. Even then we only do this with customers who have a poor credit rating, or who are asking for a particularly high loan. Customers with poor credit ratings usually already know they have one. I can only advise: Do as much as you can to make sure that your credit rating with credit agencies are as good as possible.

06/03/2011

The Perversion of Outsourcing

I do not like outsourcing: We program our software ourselves (a real USP!), our technicians do not sit in India, we handle our own bookkeeping, we have our own...

I do not like outsourcing: We program our software ourselves (a real USP!), our technicians do not sit in India, we handle our own bookkeeping, we have our own marketing team (including product photo studio) and translation office, and of course, our own logistics. One of our large competitors has been outsourcing his warehouse for a long time. I ask myself how that can be a good thing.

We are of the opinion that a distributor's warehouse and logistics show his strengths. Sixty percent of our delivery process is handled automatically. For the remaining 40% logos have to be adhered to the devices, non-standardized serial numbers need to be put on, or perhaps a customer-specific packaging tape will be used. We also often use our customers' printed shipping boxes, or slip their advertising materials in. This is all done in small quantities, so that it hardly works in a 1,000 man warehouse. Independent of that, it is important to have an on-site warehouse, so that a technician or salesperson can have a quick look at something.

Add to this mix the fact that Jarltech also has a small but nice truck fleet. DPD is a very reliable shipping partner. Despite this it sometimes happens that their last truck is full at the precisely calculated cut-off time of 7PM. So, either we have to send another truck after it, or also fulfill the 4-hour delivery service within a radius of 250 km.

Another example is palette goods shipment. We have tried this with many shipping companies. Unfortunately the prices here have been driven into the ground so much to the point that quality is suffering. Palettes with printers on them are left standing in the rain, ink cartridges are freezing, goods are being delivered incorrectly, or are needed within 5 days somewhere in Germany. Sure, a palette like this costs about 40 euros and will be loaded and unloaded about 5 times. But if we do this ourselves, then the palette costs around 100 euros. . .but since we started with our own trucks 5 years ago, we have never ever had an incorrect delivery, or receipt paper left standing in the rain. And we have never had a palette tip over while unloading it.

To comment on the topic "Outsourcing Core Strengths": A large, well-to-do manufacturer in our segment recently sought the help of a well-known corporate consultant to plan new business areas for them. What? What is the job of their Top Management? Can you simply outsource future corporate strategies? And if it does not work, do you then fire the consultant? For a corporation this is the perversion of commercial trade.