Supply chain constraints that have plagued the channel since last year are all but gone, said Ingram Micro CEO Greg Spierkel in an interview with CRN.
Ingram Micro, which had lost “tens of millions of dollars” in potential business during the fourth quarter of last year and first quarter this year, saw negligible impact caused by product shortages in the second quarter, Spierkel said.
“Where there were constraints in printing, networking and displays, the supply chain globally has caught up with market dynamics,” Spierkel told CRN after the $30 billion distribution power Thursday posted a 24 percent sales increase for its second fiscal quarter ended July 3, its largest quarterly sales increase in 11 years.
Spierkel went on to say that he’s had meetings with most of Ingram Micro’s top 10 vendors over the last few weeks, and he’s been in Asia and Europe, and the consensus is that supply chain constraints are all but over.
“I just had [Cisco CEO] John Chambers for an hour and a half a couple days ago and we talked about the supply chain situation. I could say the same for a number of other key vendors,” Spierkel said.
Spierkel's sit down with Chambers is significant given that solution providers say that it is the Cisco product shortages that hit them hardest.
“The general feedback is that things got substantially better, particularly at the back end of Q2, in June," said Spierkel. "ODMs (Original Design Manufacturers) are adding capacity, which most of the large vendors are drawing from.”
The one area where Spierkel still hears about constraints is smartphones, but it’s a space where Ingram Micro doesn’t have a big presence.
Spierkel added that his conversations with vendors indicate that product shortages shouldn’t return, barring any future wild fluctations in market demand.
"The growth in the market may be a little more modest off of comparisons where we had a little better back half of last year," said Spierkel. "Vendors are catching up to 10 percent to 15 percent growth rates as opposed to 15 percent to 20 percent we saw in the first half.”
Ingram Micro’s VAR business was “at or above” Ingram Micro’s North America sales growth of 30 percent, compared to the second quarter last year, Spierkel said.
“I’m encouraged that that segment of the business did well. We also saw some pretty good growth in e-tailers in North America. Other sectors, like corporate accounts are doing well too. Everything grew close to the [30 percent] average. It was a very uniform story for us in North America,” Spierkel said.