The Rupp Report: Don’t Argue, Find New Business Channels

As an old horse in this industry, I’m still convinced that true textile people are a little bit
like farmers: They always argue that life is tough, they don’t make any money and they’re close to
bankruptcy. However, I’ve never seen a farmer with an old tractor and an old barn. Farmers around
the world are in a comfortable situation: They have the strongest lobby in their parliaments and
are – sorry farmers – still the biggest obstacle to free trade.

Slippery Slope

With the whole textile fabric and apparel industry on a slippery slope, the textile machinery
industry is not far away from the point of vanishing too. And, as a very human touch, it is still
common sense to blame other people for its own mistakes and delay the development of new products
(See ”
Rupp Report: The Vicious Circle Of Money
,” Sept. 8, 2009)
. But there are new twists in the
story – enhanced service and cost reduction.

Original Parts Close To The Market

There are companies that are in search of new ways to generate new business. Spare parts are
a possibility – genuine spare parts. Everybody knows the problem with spare parts. First, you have
a machine breakdown and you need the spare parts immediately. Most companies carry some parts in
stock, but to reduce costs they are sent only by collect freight. At ITM 2009 in Istanbul, Turkey,
Oerlikon Textile Components presented its new approach to spare parts sales. Oerlikon opened with
its agent in Turkey a spare parts shop – yes, a shop. The franchiser is maintaining a certain
quantity of spare parts which are available from the shelf. The store personnel are industry
experienced and trained by Oerlikon Textile Components in Germany.

For Example

Now, if the customer needs new travelers, he goes to the shop and buys them. If, for example,
a customer needs five spindles, they cost 250 euros. If he’s ordering the spindles from Germany, he
pays transport costs of some 300 euros. If he buys in the local store, he only pays the 250 euros.
This is a silly calculation and very expensive. Let’s take the example of the rings and travelers.
According to Oerlikon Textile Components, a 25 percent loss of travelers through handling is
average. Why? Many travelers are wrongly stored in textile plants and therefore many travelers are
never used. If the shop stocks the travelers and provides them 24 hours a day, the change of the
parts in the spinning mill is easy to execute without maintaining its own supply that potentially
may not be used.

Premium Products

As mentioned, top labels only sell top quality. According to Iris Biermann, vice president
and head of markets and product strategy, Oerlikon Textile Components’ brand guarantees highest
quality. There is no need to conduct time-consuming research. Furthermore, the one-stop-shop
strategy of the product portfolio includes all components, spare parts and consumables relevant to
ring spinning. Time is money. For the purchaser, it is essential to have a reliable source to get
his spare parts. All important components, spare and wear parts for ring spinning are on hand with
a guaranteed availability. The store holds stock on the spot, which reduces machine down times and
decreases spare parts stock at mills.

Customer Proximity

Customer proximity is a necessity. The new stores will be in the most important markets where
the customers are. The decision to open a store is based on the number of installed spindles in a
200-kilometer radius. All required parts should be at the customer’s premises in less than 24
hours.On top of that, every authorized dealer is provided with the latest products news and
developments from the supplier. And last, but not least, it is always favorable to have a
face-to-face contact with your supplier.

Oerlikon Textile Components said that it will open some 10 stores in the next few years.
We’ll see. However, this is an idea to observe in the future. If you want to know more, please

September 15, 2009