CEO Blog | Jarltech.com

CEO Blog

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.

02/03/2011

Everything iPad

One very noticable thing at the EuroShop is that every second POS manufacturer has a touchscreen checkout, which looks like an iPad (or rather, has used some of its...

One very noticable thing at the EuroShop is that every second POS manufacturer has a touchscreen checkout, which looks like an iPad (or rather, has used some of its design elements). The manufacturers who do not openly show an iPad checkout have top secret developments going on in the back room, which basically looks like a puffed up iPad. Ok, sure, they are trying to excite customers with its shape and navigation via multi-touch gestures on the screen, which does not really work.

Anyone who is really into multi-touch though can find something of interest at the EuroShop: at least every fifth presenter is offering games of chance for the exhibition visitors to win prizes like Apple tablets. By the way, these devices look an awful lot like the new POS systems. . . :)