Companies Proceed With Plan to Form Strategic Alliance to Redefine Global Supply Chain
SANTA ANA, and MILPITAS, Calif., Oct. 1 /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 solutions, announced today that they have signed a definitive agreement. The agreement formalizes the terms of a strategic alliance announced on June 15, 1998, 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. Under the alliance, the companies plan to begin shipments to customers in early calendar 1999.
With this agreement, Solectron and Ingram Micro form a team intent on streamlining the global supply chain. By leveraging the core competencies of each company in logistics management, sub-systems assembly, systems testing, build-to-order, configure-to-order, and front- and back-end order processing, the model will lead to a more responsive channel product delivery service that will benefit original equipment manufacturers (OEMs), value-added resellers and ultimately, consumers.
This model is expected to reduce cost, time and inventory in the supply chain while maximizing assembly and configuration flexibility. For OEMs, the model can streamline their global supply chain, open additional distribution channels and address their build-to-order needs -- all of which will reduce their logistics and handling costs, limit their inventory liability, and help them avoid obsolescence costs.
Jerre L. Stead, chairman and chief executive officer of Ingram Micro, said, "We are pleased to finalize this agreement with Solectron. Through this alliance, Ingram Micro is expanding its reach around the world -- allowing us to provide PCs and servers to our resellers on a global scale. The capability our alliance will provide to configure and assemble high-quality solutions in the U.S., Europe, Canada, Asia and Latin America is a competitive advantage we believe will lead to greater efficiencies in the demand chain for OEMs and resellers."
"As consumers continue to demand customized computing products, more efficient manufacturing strategies such as build-to-order have become critical if the OEM wants to stay competitive," said Dr. Ko Nishimura, Solectron's chairman, president and CEO. "We want to enable OEMs to implement a build-to-order strategy leveraging Solectron's global supply chain agreements, investments in technology, streamlined manufacturing, stringent quality processes and global footprint. With this strategic alliance with Ingram Micro we are creating a new industry model. Build-to-order manufacturing for the channel will provide the ultimate customization, highest quality products and fastest delivery system in the industry today. This alliance strengthens our long-term strategy to provide our customers with the ability to fulfill their customers' customized orders through an alternative product delivery model that provides a global and cost-effective build-to-order solution."
With the Solectron and Ingram Micro alliance the expectation is that a consumer can place an order with a reseller for a brand name, customized PC, which will be built to their specifications and shipped directly to that reseller. State-of-the-art information systems links between the companies will enable the reseller to place an order with Ingram Micro, which will electronically send it to one of the alliance's manufacturing facilities where it will be built and shipped. With this flexibility, 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. In addition, resellers will be able to order customized products of the highest quality with the fastest delivery in the industry today.
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 sales of $19.3 billion for the last four quarters. The company and its affiliates operate in 31 countries and distribute more than 145,000 products to more than 112,000 resellers in 120 countries. Ingram Micro can be found at http://www.ingrammicro.com/.
About Solectron Corporation
Founded in 1977, Solectron Corporation (http://www.solectron.com/) provides integrated solutions that span the entire product life cycle -- from pre-production planning and design, to manufacturing, distribution, and end-of-life product service and support -- 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 160 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 Baldrige Award for Manufacturing twice in the 10-year history of the national program. The Company has more than 25,000 associates in 22 manufacturing facilities worldwide with 6 million square feet of manufacturing capacity. Revenues for fiscal year ended August 31, 1998, were US$5.3 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
Contact: Michael E. Donner of Solectron Corporation, 408-956-6688; or
Kirsten Frosh of Ingram Micro, 714-382-2727
Website: http://www.ingrammicro.com/
Website: http://www.solectron.com/