ETI seized a fast growing consumer market for its professional catering thermometer, based on a flexible supply chain through contract manufacturer WPS and Anglia Components. In 2012, ETI won a Queen's Award for Enterprise within the category of International Trade for its success in worldwide markets.
The fastest thermometer in the West
Electronic Temperature Instruments Ltd (ETI) is claimed to be the UK's largest digital thermometer manufacturer, producing catering and industrial thermometers and other related instruments. While most are aimed at professional users industry, ETI discovered that its SuperFast Thermapen was attracting interest from the home gourmet kitchen. Faster and more accurate than any other cooking thermometer on the market, the SuperFast Thermapen stabilizes in fewer than 3 seconds and is the digital thermometer of choice for professional and celebrity chefs. Based on their endorsement, Thermapen became all the rage with those for who cordon blue cookery or BBQ competitions are a passion.
Consumers behave very differently from professional buyers, though the product is technically very similar, according to Managing Director Peter Webb of ETI. "Professional demand is relatively steady and easy to predict but consumer markets are volatile," he explained. "If Thermapen is featured on a popular cookery program or blog, there can be a sudden spike in demand. We offer the probe in a range of colours, and demand for different colours can also fluctuate wildly. Thermapen is sold online – fickle browsers move on if stock isn't available in a now timeframe."
Flexible supply chain
"Our flexible supply chain partnership with contract manufacturer WPS and component distributor Anglia allows us to adjust our manufacturing schedule on a week by week basis, continued Webb. "When we placed the Thermapen contract, we looked at manufacturing in Eastern Europe and in China. WPS and Anglia were able to match the offshore factory gate price, offered higher quality and much faster, more flexible delivery. For the Thermapen, it was the key to allowing us to grow quickly into a new market without overstretching our capital base."
The supply chain agreement with Anglia Components and Wilson Process Systems (WPS) allows ETI to place firm orders on a rolling schedule two weeks ahead. According to Steve Rawlins, CEO, Anglia, "ETI provides us with a non-binding forecast of demand a year ahead, which allows Anglia to place orders for long lead components, and WPS to manufacture the bare PCBs. Though ETI ultimately underwrites the stock, they are only invoiced for the components that they actually use, which keeps the capital employed in finished goods to an absolute minimum."
Peter Webb says, "This flexible partnership is critical to the continued viability of our UK manufacturing operation – we currently make about 70% of our instrumentation and sensors here in Worthing, and 95% of our staff are based here."
Communication is key
Communication is key to the success of the relationship. "Anglia keeps a close eye on the market, and lets us know about upcoming obsolescence issues and lengthening lead times," Nick Jones, Sales Manager at WPS, said. "In discussion with ETI, we can then manage the issue by placing additional orders, sourcing equivalents or designing out problem parts. Equally, ETI give us visibility of upcoming design changes, so that we can ensure that stocks of components are fully used up. Effective communication between all three partners has meant that, in four years, we've never had to call on the underwriting commitment that ETI provides."
Jones believes that the success of the relationship is based on playing to the strengths of all three partners. He says, "The ETI product can be assembled automatically, helping us match the Asian factory gate price. A machine in the UK costs the same to run as a machine in China. WPS offers an agile, responsive manufacturing service and is just 90 minutes' drive from ETI. This has allowed a really close working relationship to grow. Anglia is helpful and easy to deal with – probably our best supplier, and has a UK warehouse so that we get a reliable, overland shipment. "
According to Webb, there is still a real cachet to offering a British manufactured product – and ETI makes much of this on its website. "British made is still regarded as a guarantee of quality, especially for a prestige consumer product. The gourmet chef and BBQ market has supported significant growth for us – it is 5-600% bigger than the professional market. We just couldn't have grasped this opportunity with a Chinese manufactured product on a six-week shipment lead time."