Avnet 2000 Annual Report Download - page 16

The largest of Avnet’s three operating groups, Avnet
Electronics Marketing (EM), with sales exceeding
$6.6 billion – an increase of 38 percent over FY’99 – is one of world’s leading distributors
of semiconductors, interconnect, passive and electromechanical components, and radio
frequency and microwave products. Customers include original equipment manufacturers
(OEMs) and contract manufacturers.
EM is led by co-presidents Steve Church and Brian Hilton, who share operational responsi-
bilities. Mr. Church leads efforts in the Americas and Mr. Hilton focuses on Europe, the Middle
East, Africa and Asia/ Pacific. They share the global functions of customer management,
supplier management, e-business, materials management, finance and operations.
In two years, EM – now the No. 1 electronic components distributor in North America and
a leader in electronics industry supply-chain integration – has successfully reorganized,
rebranded, integrated newly acquired companies, globalized and technically enabled its
organization to retain and enhance its strong market position.
Customer needs are fulfilled via three primary services: Core Value Services, Integrated
Material Services and Avnet Design Services.
CORE VALUE SERVICES
The legacy business of Avnet, Core Value Services is focused on the transactional needs
of the traditional buyer, who may choose to do business by telephone, online or both.
Staffed with inside sales teams of skilled, well-trained commodity specialists, and also
providing complete ordering and order tracking via its comprehensive Web site, EM
simplifies and adds flexibility to customer transactions. Stocked with hundreds of
thousands of components from the world’s premier suppliers, and offering a suite of
value-added services including chip programming and testing, cable assembly, kitting and
materials management, EM takes pride in its exceptional one-stop service.
INTEGRATED MATERIAL SERVICES (IMS)
EM’s strategies continue to strengthen Avnet’s position as a premier material manager
within the supply chain for the electronic components industry. Avnet IMS, the supply-
chain management services business, is growing substantially faster than the industry
average. Its success is a strong indicator of the direction Avnet EM will move in the future.
2.0
4.0
6.0
EM SALES GROWTH
billions
96
4.2
97
4.1
98
4.5
99
4.8
00
6.6
IMS’ growth is more than 40 percent compounded annually, with $2.6 billion in sales
in FY’00.
Serving major customers and suppliers, IMS employs leading-edge information technology
to manage the customer’s entire bill of materials while reducing cycle time from design
through production. Its charter is to pull components through the manufacturing process
efficiently, reduce inventory, lower costs and improve responsiveness. All are aimed
toward getting customers’ end products to market faster and more cost effectively.
AVNET DESIGN SERVICES (ADS)
Backed by Avnet EM’s technology suppliers, ADS offers complete product solutions to
engineers. With an average of more than 10 years of design experience each, Avnet
engineers, located around the world, can assist with a variety of design-related and time-
to-market issues. It remains ADS’ goal to support customers with the best technology
line card in the electronics industry, help them develop leading-edge products and, most
importantly, get them to market faster. ADS wins new designs for suppliers’ products and
influences the bill of materials early in the design process by focusing on three strategic
initiatives: design-win sales; custom integrated circuit designs; and systems-level design
services. The high technology products ADS helps design and develop are delivered
more quickly to market through the supply-chain management services of Avnet IMS
than through the traditional core value services model.
GLOBAL PLANNING
Another highlight of note: In January 2000, Avnet EM organized its first Global
Customer Management Strategic Planning Summit where EM shared its strategic
planning process used to establish its goals and strategies. Global customers were
encouraged to voice their expectations of Avnet and together, the group developed key
strategies and action plans. The Summit proved to be a valuable exercise in cooperative
strategic planning and will become an annual event.
AVNET ELECTRONICS MARKETING/AMERICAS
Avnet EM Americas (EMA) has had the most successful fiscal year in its history, with
record sales of $4.7 billion, up 36 percent over FY’99, and an increase in net operating
profit after tax return on working capital of 2.48 percent.
The year’s most significant accomplishments were achieved in conjunction with the
acquisition of Marshall Industries and its Sterling Electronics subsidiary. This, the largest
0.5
1.5
2.5
IMS SALES GROWTH
billions
96
.6
97
.8
98
1.0
99
1.6
00
2.6
At Avnet Electronics Marketing’s
Chandler, Arizona, megaware-
house (expanded 202,000 sq. ft.
in 2000), ‘Special Handling’
instructions divert orders to
stations where material handlers
ensure that customers’ unique
requirements are met.
Avnet engineer works on a
customer’s design in the new
Avnet Design Services facility
in Munich, Germany.
29
AVNET ELECTRONICS MARKETING
Avnet Electronics Marketing’s
goal is to be the supply-chain
integrator for the electronic
components industry.