More competition for Dell?
Ingram Micro and Solectron Corporation Partner to
Redefine Global Supply Chain
PR Newswire - June 15, 1998 16:17
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Companies Enter into Strategic Alliance to Deliver a Global Integrated Build-to-Order Solution
SANTA ANA and MILPITAS, Calif., June 15 /PRNewswire/ -- Ingram Micro Inc. (NYSE: IM), the
world's leading wholesale distributor of technology products and services, and Solectron Corporation
(NYSE: SLR), a worldwide provider of customized electronics manufacturing services, announced
today that they have signed a non-binding letter of intent to enter into a strategic alliance to provide
global build-to-order and configure-to-order assembly services for personal computers, servers and
other related products in the United States, Canada, Europe, Asia and Latin America. Financial terms
and specifics related to the announcement were not disclosed. The companies plan to begin shipments
to customers before the end of 1998.
Under the terms of the agreement, the companies plan to leverage their combined resources, including
existing facilities, systems and personnel, to provide first-class build-to-order solutions. Both
companies will manage this alliance under a joint management matrix that will include a sales and
marketing staff, program management, information technology resources, and test and process
engineers.
The alliance will create one of the strongest teams in the dynamic electronics manufacturing services
and distribution industries designed to deliver the first truly global configuration solution. Original
equipment manufacturers (OEMs), value-added resellers, and ultimately, consumers will benefit by this
redefined and streamlined supply chain. This model is expected to reduce cost, time and inventory in
the supply chain while maximizing assembly and configuration flexibility.
This alliance will permit Ingram Micro's worldwide channel assembly and configuration initiative,
Frameworks(TM) Total Integration Services, to deliver customized, fully-tested systems to resellers
from 11 locations worldwide utilizing Solectron's and Ingram Micro's global footprint. Earlier this year,
Ingram Micro announced plans to open five integration centers in key geographic regions. This alliance
greatly accelerates and expands Ingram Micro's commitment to global channel assembly by positioning
additional integration facilities in close proximity to its distribution centers in all of the geographic
markets it serves.
"As global leaders in our industries, we are uniquely positioned to drive this effort on behalf of our
resellers, supplier partners and OEM customers," said Jerre L. Stead, chairman and CEO of Ingram
Micro. "Our mutual goal is to deliver the latest technology products to the specifications of resellers
and their customers. We are delighted to join forces with Solectron, the undisputed quality leader in
manufacturing process excellence, to define this new industry model."
"To stay competitive in today's rapidly evolving marketplace, OEMs need to lower costs and improve
time-to-market and time-to-volume. The way to do this is to reduce costs and time in the supply
chain," said Dr. Ko Nishimura, Solectron's chairman, president and CEO. "This alliance, backed by
Ingram Micro's superior execution of product delivery, should offer the industry a new model that
optimizes the supply chain to give customers the ultimate flexibility and the highest quality products at
the lowest total cost. Solectron will also be able to expand our market access by leveraging Ingram
Micro's leadership and its ability to generate product demand within the channel."
By leveraging the core competencies of each partner in logistics management, sub-systems assembly,
systems testing, build-to-order, configure-to-order, and front- and back-end order processing, the
alliance is expected to optimize a product delivery solution for the reseller channel.
Consumers demand products that contain the most current technology in the marketplace. This forces
resellers to evolve the way they do business and how they deliver products, Stead said. As a result of
this alliance, resellers should be able to lower inventory carrying costs and avoid duplicative "touch
costs" of reconfiguring already assembled systems to meet customers' specific technology
requirements. With this new model, resellers will be able to place an order with Ingram Micro, which
will electronically transfer the order to one of the alliance's assembly facilities. The assembly facility will
produce the order to specification and ship directly to the reseller. With this flexibility, resellers will be
able to order customized products and still get one of the fastest deliveries in the industry without
compromising quality.
OEMs will benefit from this alliance since they will be able to use this enhanced capability to address
their build-to-order needs while streamlining their supply chain on a global basis. Specifically, this
alliance is expected to open additional distribution channels to the OEMs to better respond to the
global marketplace. The goal is also to enable OEMs to reduce their logistics and handling costs, limit
their inventory liability and avoid obsolescence costs.
About Frameworks Total Integration Services
Frameworks is Ingram Micro's worldwide channel assembly and configuration initiative that delivers
customized, fully-tested systems to resellers. Ingram Micro launched Frameworks in July 1997 in an
effort to offer enhanced integration services in support of Acer, Compaq, Digital, HP, IBM and other
major brands.
About Ingram Micro Inc.
Ingram Micro Inc., headquartered in Santa Ana, Calif., is the world's leading wholesale distributor of
technology products and services, and a leading provider of assembly and integration services, with
1997 sales of more than $16.5 billion. The company and its affiliates operate in 31 countries,
distributing more than 145,000 products to more than 100,000 resellers in 120 countries.
About Solectron Corporation
Founded in 1977, Solectron Corporation (www.solectron.com) provides integrated solutions across
the entire product life cycle -- from design to manufacturing to end-of-life services -- for the world's
leading electronics OEMs. Solectron offers its customers competitive outsourcing advantages such as
access to advanced manufacturing technologies, shortened product time-to-market, reduced cost of
production and more effective asset utilization.
The Company has received more than 150 quality and service awards from its customers in addition to
the 1997 and 1991 Malcolm Baldrige National Quality Awards. Solectron is the first company to win
the Malcolm Baldrige National Quality Award for Manufacturing twice in the 10-year history of the
national program. The Company has more than 22,000 associates in 21 manufacturing facilities
worldwide with five and a half million square feet of manufacturing capacity. Revenues for fiscal year
ended August 31, 1997 were $3.7 billion.
This release contains forward-looking statements based on current expectations that involve a number
of risks and uncertainties. The potential risks and uncertainties that could cause actual events to differ
materially are included in the SEC filings, including the Form 10-K and Form 10-Q for Ingram Micro
and Solectron, respectively.
SOURCE Solectron Corporation
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