Designs on Distribution: Amplicon Electronics

It maintains an interesting business model, blending distribution with manufacture of its own products. Its distribution clients are typically system integrators, manufacturers and test houses in the aerospace, military, transport, security and building automation industries. The company has built its reputation on providing non standard, extended specification, high quality products backed up by technically competent long term support. The company has been through a number of phases over the last few years, culminating in a management buy out in 2005 in which long term Amplicon employee Tony Gorbold bought the company from founder Jim Hicks. Since then, Gorbold has sold his interest and Gina Citroni is now in full control of the company as chief executive. Citroni, who joined the company as purchasing manager in 2001, freely admits the last few months haven't been that good. "It wasn't until the last three months of our 2008/9 financial year that the downturn hit. In fact, until then, our business was buoyant and, with the figures showing we were 12% ahead of budget, we were heading for a very good year. Then someone turned the tap off. If I'm honest, we've just experienced a few heart stopping months as we saw ourselves move back to where we were last year." In the end, the company saw its sales grow by 3% over those of the previous year. "But profitability remains strong," she noted. "However, looking ahead, things look problematic and feel very 'edgy. We're talking with people, but the discussions aren't closing very quickly." Discussions in Amplicon's world have typically centred around technology. "But, at the moment, people are only discussing price; and that's quite a sea change in our market," Citroni commented. "In engineering, customers are generally interested in the cost of ownership, innovation and quality, alongside price. And we don't usually win orders simply on the basis of price." In fact, Amplicon is more interested in competing on a cost of ownership basis than on price. "We're engineers," Citroni affirmed, "and we sell the benefits of pre sale and post sale support. In some cases, we're selling an Amplicon product, but if we aren't, we are acting as the principal UK distributor; that's typically our position. But times have changed – at least for the moment – and Citroni admits that the only way the company is winning business is if it is the cheapest. "Even so," she noted, "there will be a cost attached. We can cut our cloth accordingly, but if our customers want a cost of ownership discussion, then we have to point out that discussion will be different to one based on price. In the latter case, service levels will suffer." Citroni believes Amplicon is weathering the storm because it doesn't have all its eggs in one basket. "We don't sell one particular technology; we're spread across a number of sectors. And we have 35years of history behind us; our database covers most industries." Amplicon continues to deliver a range of products to a lot of different end markets, even during the current recession. Citroni puts this down to the 'fear factor'. "There's a 'fear factor' element involved. Not implementing new technology has a higher cost than shelving it. Technology is a saver of time and a provider of efficiency and so on. Technology will always be a driver; even during a recession." In the time since the management buyout, Amplicon has been rebranded and refocused. But the recent downturn has made it harder – as it has for most companies – for planning. Nevertheless, the company has expanded its horizons. "We've added a security automation division," Citroni pointed out, "and we've recently launched a test systems division. We're trying to keep our product offering relevant and fresh. We've invested in areas where we believe there are revenues to be taken." The test systems division is being launched, as she recognises, at the most difficult time. "I believe that you shouldn't hide," she asserted. "If you believe in your products and believe in your staff, then you should get out there and pitch. And the stronger you pitch your company, the more likely you are to win business." The test systems division has been 18 months in the making. "You just can't shelve something like that," she claimed. "It wouldn't make sense." Nevertheless, Citroni admits the market is 'the most difficult I've known it'. "We were probably about six months behind everyone else in terms of when the downturn hit. What I don't know is whether we'll be six months behind everyone else when the economy starts to come out of recession. January 2010 might well see an upturn, but I'm not convinced." But the economic troubles are not restricted to the UK; many of the world's economies are experiencing downturns in demand. It's a factor that impinges on Amplicon, because 11 or 12% of its business is international. "We've been growing our international sales," Citroni observed, "and have been working with UK Trade and Investment." One thing which concerns many industry observers, along with Citroni, is just how quickly markets will pick up. "What worries me is whether the economy is going to experience a 'double dip'," she concluded. Amplicon have recently added the DX series of industrial routers from GarretCom to its range of IP based industrial networking solutions. DX series routers have IEEE1613 and IEC61850 approval for substation environments. The devices come with fibre optic, Ethernet and serial (RS232/422/485) connectivity options, as well as with built in support for Modbus TCP to Modbus serial conversion and network redundancy through RSTP-2004. Each industrial router can operate in temperatures ranging from -40 to 85°C and comes with a range of mounting options. Routing and firewall functions allow the units to act as a gateway between a corporate and industrial LAN – a common application for industrial routers. David Evans, Amplicon's product development manager, commented: "We have had a great deal of success with Industrial Ethernet switches and serial to Ethernet converters and see industrial routers as a natural progression for our data communications range. Whether people are integrating two separate lans, building wan links from remote sites such as substations and roadside cabinets or simply using a router to represent a 'point of presence' for their network, the DX series provides an ideal solution." Amplicon's Test Systems Division has been developed to provide system integrators and end users with a wide range of test system hardware at a price. PXI, Compact PCI (cPCI), LXI and PC-based systems along with an extensive product integration service provides customers with a finished hardware platform allowing them to concentrate on their specific area of expertise – typically, the addition of a bespoke test software application. Test Systems product manager John Hayward comments: "Despite the decline in UK and European manufacturing, we have found substantial demand for the supply of integrated hardware test solutions and we are now responding to that demand."