Digi-Key President and Chief Executive Officer Mark Larson is looking relaxed and happy in his usual London hotel haunt. Not entirely surprising as he is in Europe, and more specifically the UK, a region and area fuelling phenomenal growth for the Thief River Falls-based distributor.“Europe is a shining star for us,” he observes. That’s almost an understatement when you look at the numbers.
In Europe sales will be up 26.4 per cent in 2014 at £178.5m or 222.6m Euros. Germany, the manufacturing engine of Europe is purring along nicely. Europe’s biggest market for Digi-Key it is growing 30.5 per cent to 53.8m Euros. The UK market, where Digi-Key first alighted in Europe, comfortably holds on to second place and Larson is looking at a sales increase of 32 per cent to £26.4m. In fact there is not a country in Europe that isn’t providing a sales increase. The emerging east Europe countries – Hungary, Poland and the Czech Republic have sales growth well north of 40%.
The company’s entry into the production volume market announced two years ago is paying dividends. It prompted Digi-Key to establish a physical presence in Europe and the 30-strong team have driven the production business forward as well as growing the customer base.
The other major geographic markets have made a decent contribution. Asia/Pacific sales have grown 12 to 14 per cent and North America sales are up 8 per cent on the previous year. Digi-Key global sales were $1.55bn in 2013 enough to take the company to the number 7 slot in the global distribution rankings.
With a volume production business comes the responsibility of making product available and here Larson reckons Digi-Key come up trumps. “Inventory, inventory, inventory” is the mantra at Digi-Key, both in depth and breadth. “We are 96 per cent in stock with every product in our inventory,” Larson notes. The web site and its ecommerce offering are also getting constant attention. “It is evolutionary progress,” says Larson. He is wary of big changes which can unnerve customers.
In 2013 customers from 391,000 sites around the globe accessed the Digi-Key web site. There is a fair chance some engineers at those sites were looking for technical advice from top line “not sure about which part I need” to more in-depth technical questions. “We have 140 engineers taking customers questions and of those 20 will deal with high-level applications.” To ensure a steady supply of qualified engineers Digi-Key has recently introduced a Technical Scholarship Program to study for an Electronics Technology degree at a local college.
With what seems to me no little pride Larson unveils a recent survey in North America from Hearst Electronics Group that shows Digi-Key as Best in Class for supplying design and engineering solutions to its customers.
“Engineers rank us above Arrow and Avnet in design and engineering support,” Larson remarks.