Avnet 2002 Annual Report Download - page 14

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PART I
Item 1. Business*
Avnet, Inc., incorporated in New York in 1955, together with its subsidiaries (the ""Company'' or
""Avnet''), is one of the world's largest industrial distributors of electronic components, enterprise network and
computer equipment and embedded subsystems, with sales in 2002 of $8.92 billion.
Avnet is a vital link in the chain that connects suppliers of semiconductors, interconnect products, passive
and electromechanical devices, radio frequency (""RF'') and microwave devices, and specialty products to
original equipment manufacturers (""OEMs'') and contract manufacturers that design and build the electronic
equipment for end-market use, and to other industrial customers. In addition, Avnet distributes a variety of
enterprise network and computer equipment and embedded subsystems and provides services to both the end
user and the reseller channels. Through its electronic components distribution activities, Avnet acts as an
extension of a supplier's sales force by marketing products to a larger base of customers than individual
suppliers could do economically. While many suppliers can only economically serve a few hundred of the
larger OEMs and contract manufacturers, Avnet is authorized to sell products of more than 250 of the world's
leading component manufacturers to a global customer base of over 100,000. Avnet ships electronic
components as received from its suppliers or with assembly or other value added. As part of its distribution
activities, Avnet adds various processes that customize products to meet individual OEM customer speciÑca-
tions. Avnet also provides supply-chain management, engineering design, material management and logistic
services.
Organizational Structure
The Company currently consists of three operating groups, Electronics Marketing (""EM''), Computer
Marketing (""CM'') and Applied Computing (""AC''). A brief summary of each group followed by a more
detailed description is provided below.
1. EM is engaged in the global marketing, assembly and/or distribution of electronic and
electromechanical components and certain computer products, principally for industrial and some
commercial and military use. EM also oÅers an array of value-added services to its customers, such as
supply-chain management, engineering design, inventory replenishment systems, kitting, connector and
cable assembly and semiconductor programming.
2. CM is an international distributor/reseller of enterprise networking and computer equipment to
value-added resellers (""VARs'') and end users focusing primarily on middle- to high-end, value-added
computer products and services. CM also provides a variety of networking solutions to its customer base.
3. AC serves the needs of personal computer OEMs and system integrators worldwide by providing
the latest computer component technologies, and also serves the needs of non-PC OEMs that require
embedded systems and technical services such as product prototyping, conÑgurations and other value-
added services.
Throughout 2002, each of the three operating groups implemented plans to further manage their
businesses through the creation of new, focused business units that generally serve separate sectors, based
upon product, service or geography. These business units are speciÑcally discussed in the operating group
descriptions that follow. Even as the business unit structures continue to be put in place, EM, CM and AC
remain the overall segments upon which management primarily evaluates the operations of the Company and
upon which it bases its operating decisions.
* Unless otherwise speciÑcally indicated, references in this Report to any particular year or quarter generally
are to the Company's Ñscal year period. The Company's Ñscal year ends on the Friday closest to June 30th.
3