2. REDINGTON: Maintaining Growth Momentum

MD: Jitendra Kulkarni START-UP YEAR: 1993 BRANCHES: 16 NO OF PARTNERS: 5,100 PRODUCTS & SERVICES: Systems, peripherals, components and software AGENCY OPERATIONS: Intel, Canon, Epson, Samsung, HP, Microsoft, Computer Associates, TCS, IBM and APC ADDRESS: SPL Guindy House, 95, Mount Road, Chennai 600032 TEL: 044-2353313-18 FAX: 044-2300940   POINTERS TO PERFORMANCE Has offered value proposition to partners Services division has added to the bottom line POINTERS TO FUTURE To expand to more C and D-class towns  To focus on storage and Internet-related products

Jitendra Kulkarni, CEO, Redington (India) Ltd, is ebullient because only his company among the top three members of the Silver Club, has shown a year-to-year growth. The other two have seen a decline in their growth.

The percentage growth is marginal at four points -- 80 percent this year, against 76 percent of last year. But when this growth is seen in the context of the declining growths of Tech Pacific and Ingram Micro who are at No 1 and 3 positions in Silver Club respectively, one understands the high spirits of Redington's CEO. Says he, "We have consistently grown above industry average due to the better value proposition we offer to our customers."

Redington added several new customers to its fold by focusing on creating value for its partners. The cost-effective management of logistics helped the bottomline. The service division, with an employee strength of 140, brought in a revenue of Rs 25 crore adding to the profitability. 

Jitendra believes that if Redington had entered more number of B and C class towns, the results would have been even better. Says he, "We took a little longer to expand into newer geographies." The initiative was taken only in the fourth quarter of 2000-01. Since then, 13 new locations have been added taking up the total to 26.

New tie-ups were signed with Samsung for HDDs and CA and TCS for software products. Products from these companies have taken off well and have helped Redington to balance its portfolio . Besides, several new products were added to the existing businesses. These include, high end lasers prints and CD writers from HP and i-series servers from IBM.

The highest growth for Redington came from the home and SME segment. The systems assembler segment also grew substantially.

In a market where margins have shrunk, Redington has shaped its margins in line with the value that it provides to its customers. Points out Jitendra, "We may not offer everything to every customer. However, we serve certain segments of the market much better than others." Redington has improved margins by customizing its offerings based on the needs of partners.

Keeping a constant tab on the expectations of partners has helped Redington to improve the logistic support that it provides to the channel. Immediate availability of stock with the distributor may not be perceived as a value by partners in metros, but in smaller towns this aspect carries a high value and Redington has tried earnestly to provide this value to its partners. 

Every slowdown offers an opportunity for cost cutting and Redington has not remained an exception to this. Costs have been reduced by improving processes, employee productivity and bringing in efficiency in supply chain management. 

Flexibility in policies has helped Redington to meet a wide range of requirements from the channel. Says Jitendra, "We have successfully maintained the health of our business in spite of the market slowdown and are confident that the market will only improve in the coming months."

Redington sees high potential in SOHO and SME segments in the days to come. It also wants to concentrate on C and D class towns where it expects business to grow exponentially. From products perspective, the No 2 distributor of the country sees potential in storage, packaged software and Internet-based products.