Acquisitions provide services across the entire product lifecycle
MELVILLE, N.Y., Apr 06, 2010 (BUSINESS WIRE) –Arrow Electronics, Inc. (NYSE:ARW) today announced agreements to acquire Converge, a leading provider of reverse logistics services, and Verical, Inc., a unique ecommerce marketplace geared toward meeting the end-of-life components and parts shortage needs of customers.
”These acquisitions complement Arrow’s global strategy by providing comprehensive services across the entire product lifecycle for suppliers and customers,” said Michael J. Long, chairman, president and chief executive officer of Arrow Electronics. “Reverse logistics is a rapidly growing area, and this acquisition builds on Arrow’s global capabilities as a supply chain and logistics expert. The addition of Verical also further strengthens our ecommerce capabilities.”
Converge, with 350 employees, is headquartered in Peabody, Mass., with offices in Singapore and Amsterdam, including support centers throughout Europe, Asia and the Americas. Verical is based in San Francisco.
The acquisitions are expected to be accretive to earnings by $.05 to $.10 per share annually post closing of the Converge transaction. The Converge deal is subject to regulatory approvals and is anticipated to close in May 2010, while the Verical acquisition has been completed.
Arrow Electronics (www.arrow.com) is a global provider of products, services and solutions to industrial and commercial users of electronic components and enterprise computing solutions. Headquartered in Melville, N.Y., Arrow serves as a supply channel partner for over 900 suppliers and 125,000 original equipment manufacturers, contract manufacturers and commercial customers through a global network of more than 310 locations in 51 countries and territories.
The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking statements. This press release includes forward-looking statements, including statements addressing future financial results. These statements are subject to a number of risks and uncertainties that could cause actual results or facts to differ materially from such statements for a variety of reasons including, but not limited to: industry conditions, the company’s implementation of its new global financial system and the company’s planned implementation of its new enterprise resource planning system, changes in product supply, pricing and customer demand, competition, other vagaries in the global components and global ECS markets, changes in relationships with key suppliers, increased profit margin pressure, the effects of additional actions taken to become more efficient or lower costs, the company’s ability to generate additional cash flow and the other risks described from time to time in the company’s reports to the Securities and Exchange Commission (including the company’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q). Forward-looking statements are those statements, which are not statements of historical fact. These forward-looking statements can be identified by forward-looking words such as “expects,” “anticipates,” “intends,” “plans,” “may,” “will,” “believes,” “seeks,” “estimates,” and similar expressions. Shareholders and other readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. The company undertakes no obligation to update publicly or revise any of the forward-looking statements.
SOURCE: Arrow Electronics, Inc.
Arrow Electronics, Inc. Michael Taunton, 631-847-5680 Vice President & Treasurer or Paul J. Reilly, 631-847-1872 Executive Vice President & Chief Financial Officer or Media: John Hourigan, 303-824-4586 Director, External Communications
By Chris Cookson
Can the lean supply chain get too lean? That’s a hot topic now that Toyota is suffering safety and quality woes possibly related to its supply chain. While the lean manufacturing pioneer grapples with the fallout and recovery from “unintended acceleration” and other issues, high-tech manufacturers would do well to view the troubles at Toyota as a cautionary tale in lean supply chain practices. Regardless of the final verdict on Toyota, the supply chain can, indeed, get too lean. As a veteran of several lean implementations in the high-tech industry, I’ve got a few suggestions for staying on the right side of the lean line.
Don’t dismiss Toyota. People who say that Toyota has messed up because of lean are not clear about Toyota’s history or the real root cause of their problems. Toyota has a great supply chain as well as the original and best, long-term implementation of lean manufacturing. In fact, the Toyota Production System that the company started to develop in the 1950s is the original blueprint for lean manufacturing. The real root cause of their problems: the change of strategy in the 1990s to become the largest automotive manufacturer in the world. Bottom line, they tried to grow too fast!
More humbling for U.S. automakers, Toyota drew heavily on the works of W. Edwards Deming, an American. After Toyota successfully implemented lean, the U.S. automakers adopted lean manufacturing. Bottom line, whatever lessons Toyota may learn from any supply chain errors will certainly be worth studying.
Pay attention to the details. Many lean implementations are done sub-optimally. They may look good because of the emphasis on the visible. People pay attention to establishing visual controls, fool-proofing assembly lines, laying out factory floors and “walking the Gemba” — all of which are great. You have to do those things. But that’s only half the job.
The other half of the job involves the unseen. Utilizing analytics and statistics to understand, control and then improve processes. Whether it’s measuring variability of output from a CNC machine or understanding demand patterns, you have to be reasonably sophisticated in the way that you apply these techniques in a lean environment. You have to be able to collect and interpret data correctly to do things right, e.g., know what your inventory level needs to be to provide a desired service level or know when a result is outside a control limit. When you don’t pay attention to the details — or you don’t know what you’re doing with the details — things can (and will) go wrong.
Reinterpret inventory. Lean manufacturers view inventory as a necessary evil. Why? Because as a manufacturing discipline, lean encourages the elimination of waste, which includes inventory. Meanwhile, Wall Street takes a negative view of inventory when it comes to corporate valuation. To Wall Street, inventory is a non-performing or under-performing asset.
But manufacturers can’t just take inventory out of the supply chain altogether without exposing themselves to many risks. Look at Texas Instruments, for example. It cut back so much in the downturn that a lot of their parts are factory allocated, and Texas Instruments can’t make enough, fast enough to meet overall demand. The company cut everything back, from manufacturing facilities to staff, and it took all of its inventory out of the supply chain.
Another way manufacturers reduce inventory levels is to implement vendor-managed inventory programs. Dell is a good historic example, having earned raves about its supply chain as best in class with a negative cash-to-cash cycle and a configure-to-order model that had a two hour lead time from order to build complete. Basically, Dell pushed its entire inventory into warehouses that sat next to its factories. Until it’s actually delivered to the Dell factory, the inventory is owned by the vendors. Dell has immediate access to inventory, but the vendors carry the burden when Dell was probably best suited from a cost of capital perspective to actually own the inventory.
Unless you have a perfect supply chain, you’re going to need inventory to help manage supply and demand. And for most high-tech manufacturers, that means walking a fine line to get a lean supply chain.
by Jes Lefcourt and Brian Keyser
Companies looking to develop a high-impact, enterprise-class website on a shoestring budget should consider using open source software. Open source software has provided Verical with the ability, as a small company, to create a high-quality marketplace that competes with and exceeds the offerings from our competitors with much deeper pockets. The money saved from buying commercial products has allowed us to attract, support and retain customers. Here’s our high-level take on the open source advantage.
We have utilized open source software in all aspects of our software development including continuous integration, project builds, source code management, integrated development environments, runtime, testing and monitoring. Most of the tools that we use were built using Java. The Java runtime environment and the corresponding development kit are freely available for use. Because of the availability of Java, a thriving and passionate community has developed software that can be applied to many of the applications in development today, and the Verical Marketplace is no exception. Our small team of developers has leveraged several products from the community.
We have utilized several offerings from the Apache Foundation including the httpd and Tomcat containers and the Commons project. The Marketplace uses the httpd server to provide for session management and serving the unchanging content of our web site. The Tomcat container is leveraged to manage our catalog and inventory, guide the customer through purchasing electronic components, and administer the fulfillment process. The Commons project is heavily utilized in the implementation of many of our features. In addition to providing us with projects that enable the functionality of the Marketplace, Apache also gives us the Maven software project management tool. This tool and the associated open source “mojos” have provided the Verical development team with not only the ability to build projects, but also to provide static analyses of the Marketplace code which help us to better control software quality.
The Spring frameworks have been invaluable and allow our development team to focus on the programming of our business processes rather than working on infrastructure common to every software project. We have utilized the Inversion of Control (IoC), Model-View-Controller (MVC), web services, validation, testing, security, transaction management, and coupled with Hibernate, the Object Relational Mapping (ORM) frameworks. By providing the functionality needed by virtually every application, the Spring frameworks have saved considerable resources and allowed us to implement more features needed by our customers in a shorter time frame.
The Verical Marketplace relies on the MySQL database for persistence. MySQL provides the flexibility and scalability to offer sub-second search time for our vast inventory. In addition, the license model of MySQL, without breaking the bank, allows each developer to have a fully-functioning installation.
Verical’s unique end user experience is one of our primary technical differentiators. The development team has utilized Flex to create an easy to use, dynamic experience. Similar to Java, Flex is freely available and, in our experience, is undoubtedly the best way to build websites that attract users and keep them addicted, perform like a desktop-resident application, and enable teams to effectively collaborate on development. In addition, using Flex provides a clear separation between client and server that accelerates application delivery and reduces maintenance.
We also use open source throughout our production and testing environments. The Verical Marketplace is deployed on servers running the Linux operating system. This open source operating system is of high-quality and performs better than most of the operating systems available for purchase. In addition, we were able to use commodity hardware that further reduces our cost of deployment. Testing is aided using open source products including JUnit and Apache JMeter.
Open source software has many advantages, but it also has some disadvantages. The largest disadvantage is learning how to use the product. The documentation and examples, while improving, are not as good as those of commercial products. Technical support is also a problem with some of the projects, but for others such as JBoss, Spring, MySQL, and Linux, you can find commercially available support.
Most of the developers of today have “cut their teeth” on open source software and so they are familiar with the above issues. If support is not available, they are used to finding the answers to questions through their peers or through the community forums such as those hosted by JBoss, Spring, stackoverflow.com or the JavaRanch. An organization’s development practices may also help with these issues. At Verical, we use the Scrum methodology, but more on that at a later time.
We encourage you to explore what a small team of developers has done by implementing the Verical Marketplace exclusively through open source projects. If you have any suggestions for improvement, please let us know; we are sure that, enabled by our open source libraries and tools, we can find a solution rather quickly.
Flex Brings Performance Muscle to B2B Sites March 4, 2010 No Comments
By Jes Lefcourt
The Flex programming language has yet to fully catch on in the B2B world. It should. People shopping on B2B websites increasingly expect the performance and experience they get from the B2C sites they use at home (or when the boss isn’t looking). Websites that incorporate Flex perform like a desktop-resident application. The effect is addictive to users, in the same way that the iPhone is. Exponential improvement in ease of use locks in business users who prize speed and convenience in their online purchasing. As I discuss below from a general business perspective, Flex delivers B2B performance muscle.
Flex enables common, best of industry development practices and methodologies for delivering rich internet applications. A classic problem with the HTML/Ajax applications is they don’t grow very well, due to the lack of an object-oriented, component model designed to support large application development. The projects aren’t very well organized, and it’s difficult for teams to work on them. Flex lets you take a programmatic, object-oriented approach to writing applications that are ultimately delivered via Flash. Delivery over Flash allows for browser-embedded applications with nearly the power of an Applet, without Java’s poor install base or common installation complexity.
We chose Flex because 1) it offers a more professional programming approach and 2) it lets you build a website that is much more cinematic and interactive than the typical website built in Ajax or HTML. Visit verical.com and you’ll see things transition very smoothly. There are no page refreshes. We can perform advanced operations like in-place sort, resize and rearrange table columns, dynamic filtering, auto complete, etc. All of those operations would be time consuming and non-componentized in Ajax, but they’re relatively simple using Flex.
Verical was originally written in OpenLaszlo, another rich Internet application technology that preceded and competes with Flex. Verical migrated to Flex over the past year or so because, among other reasons, Flex is better supported for newer versions of Flash. As a result, we can take advantage of the features in newer versions of Flash, which means that our website runs much, much faster.
Other benefits of Flex? It enforces the separation between the client and server. We’re not creating HTML views that the user then sees. Instead, we have a server application that communicates with the Flex application via open standards. That separation lets us easily create additional applications— e.g., our browser extension—that consume the same information. Likewise, the separation of resource bundles under Flex makes it much easier to do things like internationalize and update site assets compared to HTML. And Flex Builder, Adobe’s IDE, is much nicer to work with than a standard HTML editor.
Finally, but of no small import, as any web developer can attest, delivering an application via Flash/Flex prevents browser differences from interfering with the users’ experience of the web site. Flex eliminates the web development headaches of sites looking different in different browsers, or things working in one browser and not working in another. This translates to significantly reduced development and QA time, and also to a much more stable, consistent experience for our users.
Despite the advantages, a small percentage of businesses still resist Flex. Here are two roots to the argument against. First, building a website in Flex means your users need to run Flash, and business adoption of Flash lags behind the general user community. Second, Flex imposes an initial performance hit to deliver its overall performance gains: Our initial download time may be 1.5x that of a typical HTML page.
It’s also true, however, that businesses lag in Flash adoption by only a few percentage points, maybe 97 or 98 percent (business) vs. 99+ percent (consumers). And the few extra seconds it takes to initially load our site? That time is easily recovered in the first few sorting steps our customers take in search of their parts. Once on the Verical site, our customers blaze through the entire purchase process, doing things immediately that take minutes of page refreshing and waiting on other sites.
Bottom line: The development and user experience benefits of Flex are absolutely a key differentiator for Verical. Our relatively small development team is able to remain agile and responsive to the needs of our customers. And, at the end of the day, the web experience that we offer our customers is unparalleled in the electronic components industry and is among the best of what e-commerce on the web has to offer in general.
Did Toyota Take Lean Manufacturing Too Far? February 24, 2010 No Comments
The Economist carried an insightful article today, describing how Toyota, in its quest to become the number one car manufacturer worldwide, stretched its lean manufacturing philosophy to the breaking point. As Toyota sought to grow market share, they rapidly expanded their supply base to include suppliers they hadn’t worked with before. Along with their sole-source strategy, this resulted in a decrease in quality, an increase in recalls, and the situation Toyota finds itself in today.
If we look back on the origins of lean manufacturing, we can trace the principles to improving design, service, quality, testing and sales through various methods, including the application of statistical methods. In inventory management, statistical methods are applied to accurately size the amount of inventory needed in the supply chain based on time, variability and service levels. If applied correctly, the use of statistics in lean manufacturing will optimize the end-to-end supply chain. If applied incorrectly, with a “lean focus” (meaning reducing inventory as much as possible), it’s going to mean missed opportunities as upturns in the economy occur.
At Verical, we recognize the need for highly agile supply chain processes to compete in today’s market and the problems associated with the chronic excesses and shortages that result in large costs and risks to the supply networks. We work directly with the OEMs and contract manufacturers to reduce the risk by allowing them to source time critical components fast and easily, and with component manufacturers and distributors to allow them to monetize slow moving and end of life inventory. Our innovative online electronic components outlet provides an easy, reliable and fast way to buy and sell electronic components—which ultimately results in more agile, responsive supply chains with the associated lower costs and risks.
We can all learn a lesson from Toyota. As The Economist article states, take time to “stop, think and make improvements” in your supply chain and lean manufacturing strategy.
Press Release: Verical’s Toolbar Shows Discount Prices of In-stock Electronic Components in Browser Bar February 22, 2010 No Comments
Buyers See Part Numbers, Prices and Quantities for Inventory In-Stock at Verical’s Factory Outlet—without Navigating to Verical.com
- Firefox extension gives buyers immediate, always-on access to Verical inventory information
- Auto-complete feature displays drop-down lists of matches as shoppers key in part number searches
- Download the Verical Toolbar at https://www.verical.com/extensions
SAN FRANCISCO — February 22, 2010 — Verical, Inc., the online factory outlet for electronic components, today announced the Verical Toolbar, a Firefox web browser extension that lets users quickly and easily search the company’s extensive catalog of electronic components through a search box located in the browser bar. With the Verical toolbar, buyers can browse Verical’s in-stock inventory and bargain prices—without navigating to Verical’s website located at https://www.verical.com. Available now, the Verical Toolbar can be downloaded at https://www.verical.com/extensions/.
“Our new plug-in toolbar gives buyers, engineers and others an instant search tool to spot check prices and availability at Verical without needing to open a new window and navigate to our site,” said Josef Ruef, co-founder and CEO at Verical. “This toolbar is just one of many features that Verical offers to improve the efficiency of its user’s search experience, by rendering data in a way that makes it extremely consumable—information rich, yet easy to understand and act on. Our mission is to provide shoppers with all the data and tools they need to make informed buying decisions as immediately as their circumstances dictate.”
Other customer-driven features recently announced for the Verical Marketplace include the Bid Button, a one-click icon that delivers eye-popping bargains on selected clearance inventory available at https://www.verical.com, and Demand Match™, the industry’s only bulk search tool that matches open requirements with available supply automatically.
After adding the Verical Toolbar to the Firefox browser, users simply type in the part number they are looking for, and the toolbar will display a drop-down list of the parts available at Verical that match the search. To expedite searches, the toolbar’s auto-complete feature guides users as part numbers are keyed-in, by progressively refining the match list with each keystroke entered. Selecting one of the parts from the list will take users to the Verical site, where they can research and purchase the part. Going forward, the company will introduce a Verical Toolbar for Internet Explorer and Chrome.
For buyers who need parts delivered “yesterday,” Verical’s new toolbar provides ready access to factory direct inventory, at discount prices. Keying in the first few digits of a part number will instantly reveal parts orderable on demand, replete with pricing and quantity available.
For more information on Verical, Inc., please visit https://www.verical.com. For additional perspectives, visit and subscribe to the Verical blog at http://blog.verical.com/, and follow Verical on Twitter at @Verical and Facebook at http://www.facebook.com/Verical.
Verical Website: https://www.verical.com
Company Overview: https://www.verical.com/about/
Blog: “The Electronic Components Source” http://blog.verical.com/
Verical on Twitter: http://www.twitter.com/Verical
Verical on Facebook: http://www.facebook.com/Verical
Industry Insights: presentations, articles, websites; https://www.verical.com/about/resources/industry.html
Counterfeit White Paper: “The Real Solution to Fake Parts: Securing Supply Chains through Data Transparency and Better Market Design”; http://bit.ly/counterfeitwhitepaper
Verical is the creator of the Verical marketplace, an online factory outlet for electronic components that provides buyers traceable, branded goods at discount prices. Top manufacturers and franchised distributors publish slow-moving inventory to Verical to optimize prices and yields anonymously. Founded in 2007, Verical is a San Francisco-based start-up backed by Valhalla Partners. The company is experiencing rapid growth with over 27,000 parts available today in the Verical outlet at www.verical.com.
DemandMatch is a trademark of Verical, Inc. All other brand names and product names are trademarks or registered trademarks of their respective companies.
Tags: Verical Marketplace Toolbar, Firefox, browser bar, electronic components, distribution, electronic component catalog, electronic components factory outlet, excess inventory, online catalog, shortage purchasing, shortages, supply chain, supply chain integrity, supply chain security, inventory, manufacturing, Bid Button, DemandMatch, Internet Explorer, Chrome
Susan D’Elia, media relations for Verical
Report from DoC sheds light on counterfeit electronics in U.S. supply chain February 18, 2010 No Comments
Do you ever wonder if the electronic components that you buy from brokers and independent distributors are legit? Where are they REALLY coming from? The U.S. Department of Commerce (DoC) just issued its assessment report on counterfeit electronics, which provides some interesting, albeit alarming, statistics on the degree to which counterfeit components have become integrated into the U.S. supply chain. Thankfully, the DoC also recommends best practices for protecting against counterfeit electronics. While obvious, the foremost recommendation is buying from trusted suppliers.
To help answer those nagging questions about counterfeit components that keep buyers up at night, we created the Verical marketplace: a factory outlet for electronic components that provides buyers traceable, branded goods at discount prices. Top manufacturers and franchised distributors publish slow-moving inventory to Verical to optimize prices and yields anonymously. Today, the online Verical factory outlet has more than 27,000 parts available; check it out at www.verical.com.
Check out this excellent EE Times interview with Barclays Capital analyst Tim Luke. Luke anticipates “a tight supply of memory parts in 2010 and perhaps beyond.” This article reinforces our belief that memory will soon be joining the list of hard-to-find parts turning up on buyers’ shortage lists across the world, and at the same time, prices will begin to rise. Quickly finding trusted sources of constrained parts at bargain prices will become one of the priorities in 2010 and into 2011 for buyers and procurement managers alike.
At Verical, we recognize the need for highly agile supply chain processes to compete in today’s market and manage the challenges associated with the chronic excesses and shortages that result in large costs and risks to the supply networks. Our factory outlet provides an easy, reliable and fast way to buy and sell electronic components – which ultimately results in more agile, responsive supply chains with the associated lower costs and risks.
Supply & Demand Chain Executive: Slashing Sourcing Times for Electronic Components Buyers February 10, 2010 No Comments
By: Gina Roos, Electronics Advocate