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TD Synnex CEO Rich Hume On Varnex And Tech Select Communities, Future Acquisitions And The Supply Chain

‘The [supply chain] backlog represents current needs and now there’s an emerging part of that backlog, which is future orders that are also part of that overall model. Our crystal ball would say that hopefully we’ll be beyond the peak by the middle of the year, and then really start to see progress being made and working it off in the back half of the year, says TD Synnex CEO Rich Hume.

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What's the latest on the integration of the two companies? 

So there are a couple of things of note. First of all, we absolutely in that first 90 days had put in place our organization structure pretty much top to bottom. All of our co-workers know who their managers are, and they‘re clear on their roles and responsibilities. The second thing is that, from a customer perspective, we made sure that they were clear on the coverage that they have within the relationship, and also clear on critical items such as credit, etc. In particular, in the SMB space, we have measurably expanded credit, so A plus B and incrementally more on top in the aggregate. So I think that we’ve been meeting the core customer needs.

I would also highlight that we have determined that our ERP platform for the Americas will be CIS [Compac Information System], which is the four-decade legacy Synnex platform. [Editor's note: Synnex was founded in 1980 as Compac Microelectronics.] The differentiators there as it was reviewed and studied by many internal co-workers is that system is optimized in particular for IT distribution, whereas some of the other standard packaged offerings in the market are sort of general purpose, and you customize it. The last two important points of note around the platform are that the agility or the ability to change based on vendor or customer need is much more expeditious versus a packaged product. And it also offers quite a good cost advantage. So for the foreseeable future, we‘ll transition towards CIS in the Americas, and then we will maintain the existing ERP platforms for the rest of the world.

When we think about deployment, ERP is oftentimes a concern. This deployment actually has two points of note. First, it‘s going to be a rolling transition, meaning customers and vendors are on a timeline. So it’s not a light switch to flip, which will allow us, if there are minor problems that emerge, to address them before we move forward. And finally, both legacy companies have a lot of experience with acquiring entities and then realigning ERP. So we feel as if we‘re in a pretty good motion there. We’re on track with our synergies, the cost optimization that was anticipated. And the overall integration is on track relative to the timeline we had laid out for 18 to 24 months.

How about the integration of the TD Synnex channel communities, Varnex and Tech Select? 

Sammy Kinlaw now leads our communities and we find that the mission and scope of those communities are unique and different. So the communities themselves at this point in time prefer to stay Varnex and Tech Select, and we‘re going to be endorsing and supporting both of those communities as we move through time, sharing best practices. And in the future, if there’s an obvious reason as to why we should move to a different alignment, we‘ll do it. But we make those decisions based on the voice of those communities, and really listen to how they feel they want to run, manage and operate, with a single senior executive responsible for both. So there’s a common listening post in Sammy.

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