International power conversion specialist International Rectifier(which makes use of the maxim'serving People in Power'), has stregthened its distribution channel into Africa, with the signing of a new agreement with leading South African distributor Avnet Kopp. While the new agreement with IR is specific to South Africa, Avnet Kopp is a subsidery of the giant Avnet Corporation which had FY99s sales to a record level of $6.5 billion.
Avnet is a world-leader in the use of e-commerce and part of its integrated materials services (IMS), offers its customers an EDI-based automated point of use replenishment system (POURS). Avnet's worldwide inventory has a value in excess of $1 billion, the stockholding being optimised through extensive use of IT.
International Rectifier (IR) is indubitably the best known company in the world when it comes to innovative power semiconductor development and manufacture, and it is also the oldest, having been in business since 1947. While the company's strength has always been technological and its patents form the core of many of its competitors product lines (more than a dozen other suppliers have licences under IR's power MOSFET patents alone), it has recently adopted a new and dynamic approach to sales and marketing of its product line. The impact of this for the South African power electronics industry is that its distribution base in this country has been bolstered by the new agreement with Avnet Kopp. The Avnet Kopp agreement does not affect that in place with the existing local distributor, but should be viewed as development of an IR strategy which has already proven itself beneficial to customers elsewhere.
Discussing the new strategy which he has been implementing since taking over some 18 months ago as IR's Sales Director, Northern Europe (and Africa), Colin Moger used the analogy of the 'corner shop' and the 'supermarket'. The former satisfies the needs of the customer who wants to buy specifics or daily needs, but when it comes to the monthly shopping, the customer wants a much wider variety of products and brand options. Avnet Kopp now becomes the 'supermarket' and will be able to offer the IR product line as an integrated part of its added-value service (such as POURS) to OEMs and other customers.
In effect IR has recognised that the traditional sales outlet is no longer sufficient and more and more of today's customers are looking for broadline distributors like Avnet Kopp which will also take care of its logistics and total component stock. IR itself is geared to new product development and manufacture and it cannot add the value to the total supply chain that customers now demand.
Moger agrees that the new strategy which has seen many 'sole' distributors lose their status has also created some fear. Overall however it has resulted in increased visibility and market penetration for IR, to the benefit of all parties involved. Referring to the company's choice of Avnet Kopp, he stated that after some research of the local scene, it was obviously the best choice. Particularly important to IR was the team at Avnet Kopp, who complemented IR's belief that despite valuable sales aids such as the Internet, people still buy from people. As for the local company, MD Albert Kopp was quick to admit that IR had been on its list of 'desirable agencies' for some time and that they were fed up just selling 'clones' of the real thing. He believes that the new relationship with IR will allow Avnet Kopp to continue to differentiate itself from competitors, particularly in the crucial power management business.
Moger sees IR as entering a new and exciting phase of market development. Right from its beginnings the company has had a single focus, power semiconductors. In this field its technological competence was never in doubt, but it faced severe competition in the marketing of its products. Its competitors were all part of larger electronic component conglomerates, who wanted to also be in power semiconductors, but never really took account of the cost. With modern business practice these semiconductor divisions are now being forced to become autonomous and divulge true bottom lines. The result is that while IR still has its technology advantage it is now competing commercially on equal footing. The technology advantage it possesses, it has no intention of losing and a huge 8,5% of turnover is ploughed back into R&D.
What is perhaps ironic is that a large portion of this is effectively paid by the competitors who are still paying royalties to IR on patent rights. While overall technology leadership remains firmly with IR, European Marketing Communications Manager Graham Robertson pointed out that there are niche areas where even IR could be a 'follower', but 'leadership' is the standard the company sets itself.
While technology leaders like IR have tended to keep 'followers' at a distance by keeping new developments confidential as long as possible, this of course has created the disadvantage that customers take time to incorporate new device technology into final products. The new strategy in this regard is as innovative as it is competitor-challenging. IR intends to publish regular 'technology road maps' which will provide details in advance of products to be expected, so that engineers can already design them into new systems under development. Once you have designed in the new IR semiconductor and know that new-featured improved products are in the pipeline, why would you change to anything else?
Focus on power efficiency
So just what is new from International Rectifier and why is the company set to influence us all in some way or another? The answer to the latter is of course the world's concern about wastage of electrical power and the often limited 'non-renewable' resources that go with it. An additional factor is the trend away from the construction of new power generation facilities and particularly those which are nuclear-fuelled. The focus now is on how power can be saved, and this is an area where IR can provide devices that can deliver solutions.
While the PC-fundi is most concerned about whether his system has the latest high-speed processor, other more mobile business-like users are concerned about battery life in their laptop. Intel itself is very much aware of this latter problem, and has developed a new standard called Mobile Power Guidelines 2000 which challenged suppliers to meet recommended power budgets for higher system performance within existing thermal envelopes. IR is the first company to meet these new standards with its IRF7811/7809 DC-DC converter chipset. This chipset enhances PC performance and maximises operating time, while keeping portable computer temperatures within acceptable levels. This development for Intel took IR's competitors by surprise, and they are now back in the position where IR wants to see them trying to catch up!
While we tend to focus on grid electricity as being the largest source of power wastage, it is automobiles which are really inefficient in terms of power utilisation and fuel economy. IR is at the forefront in the development of power semiconductors and electronic power modules to improve the efficiency of vehicle electrical systems. Just one of the innovations we can expect to see in our cars in the near future is electric power steering which will see the disappearance of the complex hydraulic systems and resulting in dramatic energy savings, as the new system will only operate when the steering wheel is turned. One of the other recent contributions that IR has made to the automotive industry was the development of a range of compact power MOSFETs which meet Q101 standards, including operation up to 150°C. These devices will be increasingly used in automotive electronic systems.
The electronic power steering modules (which save up to 23 min assembly time on the production line) will be manufactured at IR's new facility in Wales. This facility will become the company's motion control centre. The focus will not just be on automotive, but anything that moves, from the compressor in the refrigerator to the vacuum cleaner motor. All motor-driven devices used in industrial and home appliance applications can be made more efficient using modular solutions from IR.
Another area in which IR is active is intelligent lighting. While we in South Africa are well-used to our relatively crude intruder-detector systems which switch on external floodlights, IR is looking at the eventual use of intelligent lighting in office blocks and public buildings (and eventually the home) where lights will switch on automatically with entry to rooms (including bathrooms) and light levels (natural plus artificial) will be automatically adjusted to optimum. On an even simpler level it has been estimated that replacing just a quarter of the incandescent bulbs in use in the world with electronically-controlled fluorescents (a speciality of IR's lighting group) could save 200 GW of electrical power. As IR puts it "The need to build more power plants could be eliminated by just changing light bulbs!"
With the official launch last month now over and the professional approach to this by Avnet Kopp being something which the management team from International Rectifier were pleasantly surprised with, it is back to the grindstone for Albert Kopp and his staff. The particular task of updating the 'People in power' in South Africa is now in the capable hands of Field Application Engineer Mark van der Westhuizen. Mark is not fazed by this new challenge, and he views the IR product range as being highly appropriate for the challenges facing South Africa in the power area. With Mark totally up to speed technically on the new range, and with the supply logistics well in hand.
Avnet Kopp are ready to provide 'More power to you' - the customer!
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