Avnet 2003 Annual Report Download - page 5

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Improvements in our cash conversion cycle are an important example of the meaningful change Avnet
has effected through our commitment to value-based management. We are methodically aligning our
structure, culture, compensation, leadership and customer and supplier relationships with our goal of
shareholder value creation. We are also focusing intently on continuously improving our business
processes through operational excellence initiatives and the aggressive use of information technology (IT).
Shared Business Services, which celebrated its first anniversary in the Americas, successfully provides
leveraged support services and solutions to Avnet’s internal business unit customers.
re:EDUCATE
Every Employee Contributes
We expect everyone on our team to understand how to positively influence the Company’s results.
Internally, the shift to a value-based management culture is being brought about through our Driving
Value campaign, aimed at educating every employee on what he or she can do, specifically, to increase
operating income and asset velocity, and ultimately, return on capital employed. Already, we’ve seen
a 20 percent increase in sales per employee over FY ’02. We are also striving to ensure all employees
have development plans to improve their current job performance and prepare them for advancement.
In FY ’03, Avnet Computer Marketing’s organization development team was named among Training
magazine’s “Top 100 Training Organizations” for its initiatives in North America, and Avnet, Inc. was
honored with a spot on Working Mother magazine’s list of “100 Best Companies for Working Mothers.”
re:BALANCE
Embracing Change
From a broad array of components and computing systems to the services that support them,
Avnet delivers value across the technology supply chain. Overall, revenue from our higher-margin
electronic components business, Avnet Electronics Marketing, and our enterprise computing business,
Avnet Computer Marketing, was up slightly in FY ’03, while sales in our subsystem business,
Avnet Applied Computing, were down slightly.
Although revenue at the largest of our operating groups, Avnet Electronics Marketing, grew only
slightly, it achieved profitability in the Americas, Asia, and Europe, the Middle East and Africa (EMEA).
The group’s operating income more than quadrupled, its gross and operating income margins were
up, and it continued to improve return on working capital and total capital employed. Days to cash,
a measure of asset velocity, improved 33 percent. Avnet Electronics Marketing is executing well on
a global basis.
Through its system integration centers,
Avnet Technology Solutions engineers install
embedded components and software, storage
and networking products as part of the
complex systems assembly process.
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