Dave Heinzmann – President & CEO, Littelfuse Inc. and Gursharan Singh Bhatia – Country Head, India, South Africa & SAARC speak to Dilin Anand from EFY.
Q. Your entire career has been at Littlefuse. How has your experience been?
A. I started as an intern at Littlefuse, right out of university. With that perspective, I’ve seen it grow from a very small company to a much larger company today. The biggest change in my current role is the link to strategies. In my previous roles, I was much more focused on the next three to four years for Littlefuse, now I focus on the next ten to fifteen years to make sure that we are setup for the company’s long-term success.
Q. What sparked the trigger to venture into sensors and power control for a company that was into circuit protection?
A. In 2012, we were in the leading position for circuit protection, but our ability to drive double digit growth every year had plateaued and reached a saturation level because we were in a fairly mature market where the global GDP was about 2 and 2.5%. So, the challenge for us was to take a step back and create a broader strategy that would enable us to reach higher levels of growth.
Q. Tense times. What did the team discover?
A. We looked at what were the major long-term megatrends, multi decade long trends with the current customer base and markets we served, and boiled it down to safe, green and connected. Safety of electronic systems is a long-term trend, because there is no scenario in which the value human life will be reduced. Energy efficiency is certainly a long-term trend. When we talk about connected, it is not just connected devices, but the large amounts of data. The infrastructure backhauls, the cloud infrastructure to support these.
Q. How did you and your team go about tackling these?
A. So once we had these, we looked at what our core competencies that leveraged our technical and manufacturing capabilities that were maybe one circle away from our core and that our customers needed. Power control was one such area, and that is what led us in the end of 2012 when we first stepped beyond circuit protection to protect, control and sense.
Q. What were the first steps taken to make an entry into sensors?
A. In the sensor world, 2012 had zero sensor activity. We started off with acquisitions of smaller sensor companies that were focused on one region. Our strategy was to take those and build up a portfolio and take those technologies to our broader customer base. Our first sensor acquisition was a Swedish company that was manufacturing in Lithuania. That business is now global and now one of the biggest consumer of those sensors is in China. We make these acquisitions to our platform and then to take them global.
Q. Could you share insight about how strategies at Littlefuse have evolved to keep up with trends?
A. We are a components supplier mainly, but more customers’ needs are becoming specific the technical and tactical solutions they are trying to solve. So, the competency of our engineering groups is being used to help our customers. As power requirement and power conversion challenges change, we need to start thinking on the system level to support our customers. We still sell components and modules, but unless we understand our customers systems and the evolution of those systems we need to keep up with.
Q. Do passives require the same amount of design wins that active components do?
A. Some product lines require designing and winning at the engineering desk, but other product lines just require us to win a share at the manufacturing point. But a major amount of our business focuses on winning at the engineering side itself.
When we brought in sensors and power control, we had already had our sales people well entrenched in understanding the system level challenges of our customers. If you look at our history as a circuit protection company, our products are safety critical and reliability critical which means we need to know their applications at least as well as our customers and, in some cases, we even help them with our expertise.
Q. How have connected devices and IoT helped demand for your product lines?
A. The main drive from connected devices is that the number of applications has increased exponentially. Previous, an appliance like a doorbell would have had very limited use of our components in its BoM, but now with modern doorbells being connected devices, they have started to have more sophisticated wireless connectivity, circuit protection and power control systems on board.
Q. What about in telecom and networking?
A. Most of our components go into the base stations and other backhaul equipment. Now when we go from 4G to 5G, the content opportunity is dramatically higher, due to the number of 5G cells you need are growing dramatically because the range in 5G is much shorter than in 4G, so the quantity of these base stations has to increase dramatically. When you think of cloud infrastructure, these blade servers data centers have these big racks for power distribution systems that are converting more and more to provide DC. The big cloud service providers also have unique architectures at their data centers, which also is solved by our power conversion business.
Q. Since your teams are connected with numerous design centers across the world, any trend seen in how challenges in design are evolving?
A. The automotive world has operated in the 12v for many years. But now we are working on 48v and 72v and even 900volts on passenger vehicles. The challenges of dealing with high voltage DC in automotive is a very serious challenge. Typically, industrial components are not designed to be suited in an automotive environment. But we see a lot of cases where customers use industrial equipment components for an automotive environment because that’s what is available, even though they shouldn’t. When we come across cases like that where they want one of our industrial components, we work closely with those customers to make sure they have the right solutions for their automotive application.
Q. What’s the major selling point when it comes to components for the industrial sector?
A. The challenges are to figure out cost effective ways to drive efficiency and connectivity in industrial settings. Power conversion is a major part of the industrial complex and just a 5% increase in power conversion or loss of efficiency is going to have a huge impact on them.
Q. What’s unique about the leadership model at Littlefuse?
A. In the Littlefuse environment, everyone is an engineer. Sales and operations staff are engineers too. My approach to leading and managing is to have a sound strategy that provides value to our customers. We have to be listening and understanding what the customers’ needs are and thinking with them about their requirements. Having great and phenomenal people with talent, and then getting out of their way. Where I can, I try to take roadblocks out of the way but otherwise I give them the authority to drive things forward.
Q. Other than IoT, what according to you is an interesting trend that can be observed in this industry?
A. One of the things that we see is the continuing evolution of the electronics industry. Especially in the automotive and industrial aspects, we see that these areas are converging with electronics. Automotive used to be almost always operated as 12-volt systems, while in industrial it was always high voltage. Today, we are seeing more and more engineers using industrial technology to meet automotive needs – we will see it in the EVs to come. In the future, we expect that even electromechanical devices and passive components will pivot to solid state solutions.