02 January 2018 | By: Bauke Zeinstra

MAG45: 70 years’ experience and still young at heart

Today, MAG45 celebrates its 70th birthday. A good reason to look back at how we’ve achieved our position as the benchmark in our field and look at some of the developments the future may bring. Because if I’m right and the past is any guide, there are many changes in store for all of us. Especially since the business disciplines of purchasing and supply are still relatively young in Europe. 

Strong manufacturing roots...

'Magazijn 4500' was set up by Philips in 1948 to standardise and simplify MRO warehousing and logistics across its manufacturing divisions. So how did our profession look back then?

Well, purchasing, or sourcing, was essentially an administrative 'buying clerk' role. And 'logistics' a term barely heard outside military contexts, such as the Berlin Airlift of that year. Training was rudimentary and 'on the job', with little or no underpinning theoretical work.

In the absence of unifying concepts like the supply chain, 'buying', 'warehousing' and 'transport' were typically independent little kingdoms (and apparently not always on the friendliest terms!). Beating suppliers down on unit price was seen as a virtue, large inventories counted as assets on balance sheets, and no-one was too bothered by the impact on overheads (which were probably on someone else's budget anyway...).

...that keep us ahead today
Today, of course, things are very different (at least in theory: some old habits do die harder than others!). Now we have 'Just in Time' and 'lean' manufacturing. We understand Total Cost of Ownership. And professionally-trained purchasing and supply managers apply the principles of strategic sourcing across global marketplaces. Companies tend to focus on core competencies, with everything else, however critical, being delegated to lower or local levels, or even outsourced entirely — as we discovered for ourselves at 2004 when MAG45 was carved out of Philips!

Fortunately, we were acquired by young, entrepreneurial investors at VAROVA, and while leaving the security of a major corporation was a challenge, it also took us out of our comfort zone as a business. And presented us with some wonderful opportunities to apply the skills and insights we'd developed over the decades. First within Philips and later for a more diverse and exciting customer base.

Focusing on the machine builder and user industry sectors we knew and understood, we set out to develop and promote truly integrated, tailored and holistic solutions. Bringing together sourcing and procurement, warehousing and logistics, and all the underlying business processes to address two notoriously problematic areas: first, Maintenance, Repairs and Operations parts that are essential to keep production lines running; and secondly, the 'long tail' diversity of often low-value, but nevertheless critical, Bill of Material product components.

... and in shape for tomorrow
Since 2016, MAG45 has been part of the Danish-owned Solar group. This gives us the stable environment to grow and develop further. We're investing heavily in our people, so we can develop ever-more innovative approaches and implement them in ever-shorter timescales. We're ensuring our warehousing, distribution and customer operations have the automation and other tools they need to ensure perfect execution, today and in the future.

And in partnership with customers and third-party vendors, we're also developing the integrated supply tools of tomorrow. It won't surprise you if I say some of these will be web-based, e-commerce and mobile applications, or creative but economical uses for RFID. But looking beyond the immediate future, I'm convinced that developments regarding the Internet of Things, Machine Learning, Artificial Intelligence, and the use of advanced analytics to exploit Big Data will all have an impact in our field — and sooner than many think. I'm therefore determined that at MAG45 we maintain our leader's role as the industry reference, and take the concept of integrated supply to new levels.

Having said all that, I can assure all our stakeholders that MAG45 will stay true to its roots. Which is something that Managing Directors like me tend to say. So let me give you two simple examples of what I mean:

One, MAG45 is not a wholesaler or a distributor, though we do both those things. No, we're first and foremost an integrator. For the types of machine-dependent companies who we've been serving for 70 years now.

Two, though we're now part of a larger group, I promise you we will remain a 'small company' in the good sense of that phrase: we're questioning, proactive and daring (within sensible limits). We're team players and believe in collaborating wholeheartedly with our customers and partners. We understand that ultimately it's all about our customers, and take pride and joy in finding new and better methods to give you greater visibility, certainty and control. While also lowering your costs, improving your efficiencies and helping eliminate your risks.

I believe that's the sort of partner a modern business needs. And if you agree, why not give us a call via +31(0)40 263 8000 or drop us a line via info@MAG45.com.