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Who has the key to the photocopier?

03 September 2009

Today, three generations of the Laughton family have a hand in a business that Bill Laughton founded back in 1956 - the electronics distributor, Aerco, which began life as the Aviation Electrical & Radio Company. We enjoy some of their reminiscences

When four members of the Laughton family, spanning three generations, met recently the conversation turned to a comparison between the industry in which they all work today and when the company was founded. Bill, who is still very active in the company, son Rob, now managing director, Fiona, Rob's wife and general manager and their son Harry, who is cutting his teeth in the family business as a sales support engineer, offer their thoughts on the business - its origins and future directions.

While younger members of the Laughton family saw recent developments in communication as the most significant factor, Bill had quite a different view. He looked back before emails, websites, mobile telephones, minis, micros, desktops, laptops and notebooks, to days when it was a position of honour to hold the key to the photocopier - a point that was quite lost on Harry! Bill set up his first office two years before the Western Union Telegraph Company started to build a telex network across the USA and when even the ballpoint pen was not commonplace.

Bill Laughton was one of the pioneers of the UK electronics distribution industry and set up Aviation Electrical & Radio Co (now Aerco) around the same time that George Stewart, with whom Bill worked at Aerocontacts, formed a distribution company called Stewart Aeronautical Supply Company that became well-known as SASCO.

Aerco began by repairing and installing aircraft radio and electrical equipment for companies operating from Croydon and other airports in the south and the catalyst for Aerco's move into distribution was the development of Gatwick airport that had been a grass airfield when Bill started working in the area.  Although Gatwick was issued with its first public licence in 1934, it was not until 1958 that the redeveloped site opened as the 'new London airport' and forerunner of the operation we know today.  In 1960 several operating companies, including Freddie Laker's Transair, formed British United Airways and set up its own workshops at Gatwick thus depriving Aerco of its fledgling customer base.  However, the problems of sourcing spares was a major issue in running an overhaul and installation service and this proved a significant factor in Aerco's decision to move into stocking and distribution.  Aerco worked mainly with connectors in those days and the main connector manufacturer at that time was Plessey. Although it is unlikely that the company took a conscious decision to develop this new route to market it did respond to the demands of this embryonic distribution service.

Communicate, communicate
It is impossible to overestimate the effect that subsequent developments in communications had on those early distribution companies. It's not just modern, web-based innovations, however. The Queen may have made the first-ever STD call from Bristol to Edinburgh in 1958, but the UK system was not completed until 1979.

Both Fiona and Harry pointed out that although communications were more sophisticated, they were not necessarily better. Many customers do not want to talk but prefer to hide behind the ubiquitous email resulting in a loss of personal contact between suppliers, buyers and engineers. There is no doubting that customers are more demanding and if suppliers are not quick with a quote or technical details they simply lose the business. There is also a greater level of transparency and it is highly probable that the buyer will have details of previous transactions instantly available and, more importantly, details from competitors.

Rob, who started working for his father on a part-time basis as a teenager and developed a marketing career in the computer industry before joining Aerco full-time in 1996, remembers that in the early days the main marketing thrust was through trade directories and direct customer contact. The appointment of a field sales engineer in 1980 helped take the business from £1.5m to £3.5m in ten years. Now, responding once more to a changing market, the company has no field sales effort and the choice of how to reach the market through both conventional and web-based media is bewildering in its diversity.

The future
Looking to the future, Rob is convinced that a higher percentage of electronic components will be sold through distribution but there will be fewer distributors as OEMs enhance vendor reduction programmes. So the remaining distributors will be selling more to fewer customers and this brings the danger that both manufacturers and the larger distributors may become more remote from designers and specifiers.  This could open a niche opportunity for specialist distributors to fill; a similar opportunity that appeared for Bill Laughton in the 1950s.


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