You are right. Managing order quantities and maintaing desired investory levels to fulfill customer demands is every organizations goal. If you are able to do it with maintaining a minimum of storage you are bound to save money and it will make the overall supply chain more effective.
@Barbara: Glad to know about this strategy by Avnet. I am sure it would have also saved a lot in terms of storage and handling costs by carefully identifying the right order quantities and maintaining the desired inventory levels.
@Taimoor: Avnet keeps a close watch on its inventory and does not buy unless its analysis warrants it. Basically the company has sold off whatever excess it had from last year and has been very conservative in new purchases. The velocity of its inventory--how frequently it turns inventory over--has actually improved. This means the inventory mix is in sync with customer orders and is often a good indication on how well a distrbutro manages its inventroy mix.
@Himanshugupta: The bill to book ratio for Avnet indicates that there were no major glitches during production or order cuts from the buyers. However, the low revenue could be because of slowness in the market and lack of demand in general.
I am also wondering as to why the revenue and profit declined from previous year's quarter. Last year had a poor performing year but i do not remember whether the first quarter was particularly strong. But this quarter's book to bill ration is at par which is a good sign.
Avnet is probably able to achieve right inventory correction and may be because of this short term revenues have come down. But slowly their current actions will definitely help them for sustainable future and profits.
EBN Dialogue enables and encourages you to participate in live chats with notable leaders and luminaries. Not only editors and journalists, but the entire EBN community is able to comment and ask questions. Listed below are upcoming and archived chats.
Thailand Stages a Comeback Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Microsoft Surface: Potential Winners & Losers What are the implications for the electronics industry supply chain of Microsoft Corp.'s decision to launch its own tablet PC? Join industry veteran and EE Times' systems and OEM expert Rick Merritt on Tuesday, July 3, at 12:00 pm EDT for a Live Chat on this subject.
Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Peter Drucker famously said "Trying to predict the future is like trying to drive down a country road at night with no lights while looking out the back window." Yet in the razor's-edge world of electronics—with a lean supply chain and just-in-time demands—the need to know the future is vital.
While no one really can accurately predict the future, we can take guidance from another Drucker saying which is the best way to predict the future is to create it.
You've heard the saying "the No. 1 supply chain risk is your people." That hasn't always been the case. But today's complex global supply chain requires a new type of multitalented employee. It's one who understands, finance, marketing, economics, is savvy with technology, graceful with relationships and can think analytically.
Where are these people? Are universities properly preparing the next generation supply chain professionals? How do train your existing workforce for these new, demanding positions?
Brian Fuller, editor-in-chief of EBN, will lead a 60-minute Avnet Velocity panel discussion that will ask and answer these and other questions swirling around today's supply-chain talent challenges.