After years of going head-to-head with one another, distribution giants Arrow Electronics Inc. and Avnet Inc. have decided to try a new angle. They will bring their juggernaut-like resources to bear on a new goal: "putting together more than 1,000 suppliers, 1 million SKUs and $2.3 billion of available inventory" and will set the effort loose against the rest of the electronics distribution industry.
The latest pairing of the two rivals involves Arrow's equity investment in Avnet's eConnections, a new Internet-based supply-chain management venture. The Internet company offers online tools to link partners in the electronics supply chain.
Just a few short years ago no one in the electronics distribution industry would have imagined that the top two rivals, vying for the number one position in the North American distribution industry, would become partners in several Internet ventures. But with a combined total of nearly $13 billion in North American revenues and a huge chunk of the North American distribution market in their back pockets, it only makes good corporate sense to take the path of least resistance and join forces-at least when it comes to the Internet.
According to Avnet eConnections founder Rob Rodin, the online company allows "the typical OEM to network with over 80 percent of its supply-chain partners." Rodin is former chairman and chief executive officer of Marshall Industries (which was acquired by Avnet last year). He is also known as distribution's Internet guru, and has stepped up Avnet's Web activities, just as he once did at Marshall.
With the acquisition of Marshall, Avnet has access to a large talent pool as well as several branded Web services. One of those services is the Engineer's Playground, a site that allows users to build and store a bill of materials and search through various component selection guides.
What's the gain from these efforts? Well, distributors hope that by pumping more resources into online services they can give engineers the technical help they need, providing it more quickly than is possible with a telephone call or a search through reams of pages in a data book, thus bringing in more business for distributors. For OEM customers, only time will tell which Internet ventures are worth their time and buying prowess.