Avnet gets a premium for this service, but the savings to Motorola far outweigh the cost, according to Parrott. While other Motorola organizations opted for different approaches, the computer business turned to IMS, and has seen a tremendous improvement in its bottom line. In the four years since the partnership went to a full EDI-based transaction system, inventory turns at the Motorola unit have tripled, Parrott said. The results of the supply-chain management program have attracted the attention of top Motorola officials, and Parrott said the company expects to broaden the program to the entire Industrial Engineering System sector. We are probably far ahead of others in adopting this.
Buyers still have the upper hand Changing market dynamics continue to work in the customer's favor.
The overwhelming trend toward outsourced manufacturing also threatens to diminish the value proposition of traditional distributor services. While consolidation is accelerating, there are still more than 2,500 CEMs out there, and they are not just aggregating demand, observers said. CEMs are increasingly influencing OEM designs. That means suppliers will have to work hard to protect the demand-creation element of distribution. But value is in the eye of the beholder.