Arrow/Wyle Rebuilds Practice Devoted To Intel

Gates/Arrow served Intel product dealers (IPDs) before it was sold last May to Synnex Information Technologies. To replace that business, Arrow Electronics built a new Intel-focused group within Arrow/Wyle, said Michelle Kuplic, vice president and general manager at Arrow/Wyle, a division of Arrow Electronics' North American Computer Products Group.

The Foothill Ranch-based company has dedicated several engineers and salespeople to focus solely on selling Intel products to systems builders, something that Gates/Arrow did not do, Kuplic said.

"There was some confusion that when we sold Gates, [the Intel part of the business went away. That's not the case at all," Kuplic said. "Arrow is still very committed to [selling Intel. We've put together a centralized group selling to IPDs. We didn't want to have it be just a part of somebody's mind share. We wanted to make sure we dedicated resources to it. We, as a company, haven't stopped supporting Intel."

Arrow/Wyle has been a key Intel partner for Paragon Development Systems, said Robert Hansen, director of distribution at the $75 million Oconomowoc, Wis., systems builder and solution provider.

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Paragon keeps Arrow/Wyle-owned inventory at its warehouse and buys it from the distributor as needed, a consignment model that has taken significant cost out of Paragon's business, Hansen said.

"I turn over inventory four times a month, which is consistent with Dell [Computer. I don't have the buying power that Dell has, so I have to be more creative," Hansen said. "I'm able to keep inventory down to $1 million a month. If I had to keep nonconsignment stock here, it'd be $4 million to $5 million a month."

About 60 percent of Paragon's business is generated from sales of white boxes to health-care customers and other midsize- and large-business customers, Hansen said.

Customers choose the white boxes because of the consistency of components Paragon procures through Arrow/Wyle, Hansen said.

"A customer like the Mayo Clinic will purchase product in advance and we warehouse it. They'll go through 1,400 PCs at once, and they do not have an issue with hardware because we know everything is compatible. If they want to roll out 1,400 PCs, they don't need 10 crews working 10 hours for 10 days to finish it."

Arrow competes with Avnet, Pioneer-Standard Electronics and Synnex in selling to systems builders, Kuplic said. The distributors ensure that Intel products are reaching the market through the 20,000 Intel systems builders in the United States, she said.

"They say, 'You're our support structure, our sales structure to these IPDs.' We provide [systems builders with the processors to make sure they're successful. If we were in Intel's shoes, we'd want to know who was able to sell our products, to make sure the right things are happening."

The majority of the systems builders have about 10 employees and sell primarily to the SMB market. They often have a vertical focus such as government, medical or education, according to Arrow/Wyle.

In addition, Arrow/Wyle continues to address the white-box market and other manufacturers in an OEM capacity, Kuplic said.

The division provides integration and logistics services for manufacturers, she said. For example, if a medical manufacturer designs a new MRI diagnostics machine, it may need additional equipment to complete the solution.

"If they need a flat-panel monitor, we can spec that in and build the solution for them," Kuplic said. "What we did with Gates, we had a bit larger line card," she said. "Now we're providing more solutions. [Gates/

Arrow would call on tens of thousands of customers. We are more focused on vertical markets. Our average customer spends a couple million dollars a year."