If we decide to do this, doing it well is not enough – we need to do it best (2)

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In the 2012 edition of ‘Secret of Success’ issued by the European Commission for the European SME Week, among others, the sole representative of Lithuania the company UAB Ruptela is also sharing its achievements. The publication presents the best small and medium-sized companies that has started as small businesses but eventually has successfully established themselves in the market and started to export their goods and services to other countries. In this respect, Ruptela is a representative of Lithuanian business the experience of which may be attractive for the majority of companies.

What is the role of innovations that are inevitably related to embedded systems in communications, and modern electronics in the hardware implemented by UAB Ruptela? The answers are presented below in the continued interview with the director of UAB Ruptela Andrius RUPŠYS.

The origins of success

From the first part of our conversation a conclusion can be made that in the work of UAB Ruptela, advanced software, hardware and technological solutions are not an end in itself but rather tools to achieve optimality between quality and price.

Andrius Rupšys. Price has a certain importance. Striving for the greatest benefits we could offer our most expensive offers, instead, we understand that our clients are different: some see quality as a priority, others are in the need to look for cheaper solutions, for some of them some basic functions are enough, and others need lots of them. We need to look for solutions that are acceptable for both sides.

„Ruptela“ direktorius Andrius Rupšys nesibodi į rankas paimti ir atsuktuvo
„Ruptela“ director Andrius Rupšys has nothing against to taking a screwdriver into his hands. Photo: G.Zemlickas

How come the company you have been managing has anchored in a rather wide geographical space within a relatively short period of time? What were the driving forces?

A. Rupšys. This year, we sold equipment to 80 countries. I cannot say that the volumes of sales are equal in all the countries, however the geographical area we work in is really wide. What are the determinants of success? There is no a single answer i think. As in any other activity, an important role is played by the company’s approach, employees, quality of service, reliability, and feeling of responsibility. You can sell a lot of things – chairs, tables, computers, but it is very important that employees of the company are capable of communicating. We communicate with our clients in seven languages, and have quite a few foreigners among our workers. We do not avoid meeting our present and future clients in person to clarify their needs and offer solutions they need. This may be called not technical but rather commercial and human communication.

As regards technical things, the types of the systems we implement are not included even in the standard cars manufactured in Germany. Why? There are companies that offer this telecommunication equipment for trucks, however, installed in a car that costs several hundred thousand of euro, this type of equipment would cost several hundreds of euros, making this a thousand times difference of prices. As a result, this would give low profits to car manufacturers despite high costs of absorbing the subtleties of manufacture. Moreover, the systems require service and maintenance. Selling of a car ends with the selling transaction while in telecommunication systems, seller’s tasks does not end with installation – systems need to be maintained, software updated, clients need to be consulted, and technical support needs to be provided sometimes even 24/7. This is simply not profitable for the major manufacturers. People buy cars for transport, and our systems help economizing manufacturing and trade costs. These are completely different purposes. The ones that are successful in selling cars will not necessarily be able to sell our systems equally successful. Of course, such systems can be bought in respective shops, but our clients are companies willing to economize production costs, and optimize activity.

There is one more factor of our successful activity. Because the company operates in the Eastern Europe we have lower costs of our products and services due to lower wages compared to Western Europe. Of course, they might be producing as good systems as we do, but the price will be higher. With larger volumes the price might be reduced, however, small and medium sized companies find it more convenient to use the services and technological solutions of, for example, Ruptela. Upon request, we provide our clients with possibilities to upgrade their equipment.

Where the true mind prospers

How many competitors you have in Lithuania?

A. Rupšys. We do have a few. Although we are competitors, I see them as colleagues. We meet in exhibitions, and keep normal communication at least with the majority of competitors.

To what level are you interested in the exhibitions dedicated to electronics and embedded systems?

A. Rupšys. We planned to participate in 23 exhibitions this year, however as a result of adjustments to the original plans, the number was reduced. Still, we are planning to attend in 18 exhibitions. These events give us a chance to meet new clients, and maintain communications with the present ones. Of course, visiting exhibitions outside of Europe is costly. Does this pay off? – it is hard to say.

How do you get information about new technical innovations?

A. Rupšys. During exhibitions, companies willingly demonstrate their innovations because demonstrating old stuff is just unwise. Companies want to show new functions, different technologies, and new pricing. Similarly, we also try to present some innovation. Thus, participation in exhibitions gives possibility to see what is happening in the market we are interested in all in one place. You will not be able to know this sitting at home.

Where do you buy products for embedded systems?

A. Rupšys. In the area of microcontroller manufacturers, number of companies is not that high. Among the dominant ones are American manufacturers because the first microcontrollers were manufactured by Americans in the Silicon Valley in California. When we look to America in this respect we naturally understand we will not be designing embedded systems in Lithuania in the near future. Even producing hundreds of thousands will not bring us far, and selling tens of millions is behind our capabilities. Manufacture and trade must go hand in hand. It is no secret that a major part of crystals for production of embedded systems is grown by Asian countries, however, the greatest minds are concentrated elsewhere. In the smallest microcontrollers, there are tens and hundreds of complex technical solutions designed by the most qualified scientists and engineers. The true mind lies not in the place where production is carried out but rather in the place where production is ordered.

The truth is that it has been three or four years Chinese grow their own crystals, manufacture chips and microcontrollers. This is a Chinese capital – fruits of their engineers’ and employees’ minds. As far as I know, the first pancakes were burns, however, this is characteristic to every start.

You doubt about similar capabilities of Lithuanian scientists and engineers, do you?

A. Rupšys. Let’s be realistic. What is Lithuania? A country with three million inhabitants. We can be as professional as we can, but we cannot have a significant role in global production because of the small numbers. Globally, we are Europe, therefore, we should think and act as Europeans: what can we do to compete as Europe? I think we need to raise this question for ourselves, and strive to act as a single body. Lithuanians, on the other hand must look for certain niches where they could fulfil their potential as laser manufacturers, biotechnologists, or specialists of information technologies.

We need to focus on certain areas of business, and manufacture top-level products – lasers, biotechnological products, or GPS systems; we need to learn to provide top-level services, and improve them. We simply do not have any other alternative. We do not have to design embedded systems ourselves but we need to learn to apply them to make our services widely known and valued. If Lithuania was a country with at least hundred thousand residents then we should think and act differently. In the present situation with only three million, we need to be wisely selective and focus on priority trends – do few things and be unsurpassable. We need to be best rather than good. And we should not be worried about the things we do not do – doing everything is impossible.

Added value created by knowledge

Maybe a business providing services cannot operate otherwise; in Lithuania, attempts to similarly segment scientific areas are being made. Companies no longer attempt to embrace everything.

A. Rupšys. Sometimes I hear that all the areas and fields need financing which is apparently lacking. The world’s greatest software manufacturer Microsoft Corporation has almost 100 thousand employees. The number would constitute a major part of Lithuanian highly-qualified employees. Microsoft Corporation, that is striving to unify its strategic business platform, is not planning to use three different operation systems in the future, and therefore, they will most probably design a single operating system. This is valuable lesson. We may attempt to embrace everything, develop new companies, but will we be able to maintain them in the future? Wouldn’t it be better to mobilize forces and funds, for example, in the area of information technologies? We can become a country of information technologies, establish a Northern European service centre, and see what companied pay for.

This year, I had a chance to visit Shanghai, China. In Shanghai factories, average monthly wage is 1 thousand Litas. The wage is planned to be raised by 20 percent each year for three years. This means that after three years, wages in Shanghai factories (not in the entire China) will be higher than in Lithuanian companies. Of course, we might try to compete with Chinese in production or services, however, in such case, we will be taught less. Then, we shouldn’t complain why we live poorly. Chinese have understood that added value is created by knowledge rather by employees; therefore, they design their own systems and products. Here in my hands I have an Apple mobile phone manufactured in China. The price of this phone in a shop reaches 2 thousand litas, and Chinese company is only paid 3 dollars for assembling this phone while the rest goes to the Apple Company. Therefore, Chinese are trying to develop their own product, and get the whole price for the product. We also need to develop instead of producing cheap things that can be produced by anyone.

Don’t we do similar things as Chinese do, only not that ingeniously maybe? We are putting together separate blocks, i.e. assembling products using imported parts, including embedded systems.

A. Rupšys. There are some companies in Lithuania that develop own products. Such companies include software, electronics, laser, and biotechnology companies. The number of such companies is not high but they sell their products globally. Our services are offered globally under the trade name Ruptela. There are many companies that serve for world’s famous giants, e.g. sews pants for one of the largest sports clothes manufacturers Nike. However, the world does not aware of this because the product is offered under the brand Nike. This is not just a trademark or a label but a brand, which is a much broader concept that involves associations being raised in the minds of people when they hear this brand pronounced and creating the impression of reliability.

Continue No. 17

Interviewer Gediminas Zemlickas