Palm Inc. is expected to announce today that it has selected Converge Inc. to help manage its surplus components and procurement operations, cementing a relationship nurtured over the last six months as Palm worked to reduce excess inventory.
The deal, under which Palm has designated Converge as its preferred surplus inventory management and open market procurement exchange, pulls the Santa Clara., Calif., PDA maker into the circle of electronics companies that Converge assists with supply chain solutions.
A few months ago, Converge announced a similar pact with a unit of Hewlett-Packard Co., one of its 16 founding members. Converge will handle parts replacement, sourcing, light assembly, returns testing, and fulfillment of desktop and mobile PC microprocessors for HP.
Palm and Converge's latest agreement is an extension of a previous relationship aimed at reducing Palm's global surplus inventory and sharing Converge's market intelligence data, according to Robert Kramich, vice president and general manager for global account management and marketing at Converge, Peabody, Mass.
"Converge has helped Palm manage surplus inventory levels by providing excellent market intelligence, a liquid marketplace, and solid global logistics," said Angel Mendez, Palm's senior vice president of global operations, in a statement. "In addition to Converge's surplus inventory services, we also plan to use its reverse auction and shortage purchasing services to lower procurement costs and increase productivity globally."
The companies didn't disclose how much Palm buys or sells through Converge. Palm routes various surplus components and finished goods through the site, said Frank Cavallaro, Converge's chief operating officer. In the auction area, Palm buys an array of materials, Cavallaro said.
"Palm is using Converge's reverse auction capability to efficiently discover best pricing for certain direct materials," Kramich said. "Palm invites the bidders to the events and we host the events. These have been working successfully for Palm."