SYNNEX INTERNATIONAL: TRANSFORMING DISTRIBUTION OF HIGH-TECH PRODUCTS

ABOUT SYNNEX

The world’s 3rd largest electronic products distributor.

Headquarter in Taipei, CEO: Evans Tu. It was started in 1975 as a division of MiTAC. The division was created to distribute intel

CPU’s to manufacturer’s. In 1985 ,it was separated from MiTAC and

named as Micro Electronics Corp.

Tu started positioning the corporation as a "bridge of high-tech products”.

He started building the firm on two pillar:1. Advanced management information

system(to fill order electronically)2. Corporate identity system In 1988 the firm was incorporated into a

new company called Synnex technology international corporation.

The operations of Synnex were divided into three areas: products, channel and logistics

DISTRIBUTION OF HIGH-TECH PRODUCTS

Distribution of information technology products could be divided into two chains:

1. Supply2. Demand Supply side of the distribution chain handled

two types of products:1. Parts/components2. System products The demand side of the distribution chain

handled mostly computer peripherals and consumer electronics

THE SYNNEX WAY

High labor costs in Taiwan had triggered a mass exodus of PC manufacturers to China.

In 1987 Synnex established a division to distribute computer peripherals to retail outlets .

Unconditional Practices: As a newcomer in consumer electronics distribution, Synnex adopted three practices that were considered unconventional in Taiwan. They are:

1. Broad client base2. No push for volume sales3. No reimbursements for unsold stock

Full-Range Logistics Operations: To avoid cost disadvantage Synnex started

serving the small retailers by bundling multiple items in one shipment.

To achieve this goal ,Synnex made extra efforts to sign up more vendors and positioned itself as a one-stop distributor.

To handle all aspect of inventory management, Synnex established a logistic centre.

Management Information System: To ensure the accuracy of order contents and

lower the cost of processing orders, Synnex created management information system and linked following operational units.

Inventory control ( shortage, normal, overstock, slow moving and dead items)

Customer management (small quantity order, single unit order)

Express delivery(video tape, a big box) Telephone sales(all information about client)

Service Differentiation: Synnex differentiated itself from its

competitors in two aspects. They are:1. Quality warranty2. Reliable after-sales services Successful Transformation:1. Elimination of unnecessary layers from

supply chain 2. Projection of market trend more accurately3. Over-production problem4. Inventory risk5. Exclusive-dealing policy

INTERNATIONAL EXPANSIONS

Power structure changed from upside-down pyramid to beer barrel.

1997-Synnex acquired an electronics distributor in Hongkong.

1998-it created australian subsidiary. It became third largest distributor of

electronic information and communication products in the world.

LOOKING AHEAD

In 2000, Synnex began marketing products directly to end users through a website called Synnex e-city.

Tu continue the expansion of Synnex to more foreign markets. China is at the top of the list

Synnex is evaluating the possibility of uploading more products with similar features into its system.

THANK YOU