Reseller Supply Chains Wobble Under Increasing Pressure

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Major IT trends such as BYOD, mobility and cloud computing are putting pressure on resellers’ supply chains as they are required to engage with significantly more suppliers in order to meet their customers’ demands for increasingly complex IT projects. This change has been reflected by ASM Technologies’ reseller customers who have required ASM to introduce twice as many vendors to its supplier network within the space of one year, including many in new product categories such as AV, smartphones and mobility.

In response to demand from its reseller customers for a broader range of products, ASM has doubled the number of tier 2 and 3 vendors in its portfolio within the space of a single year (fiscal 2013/2014). In the fiscal year 2012/2013 ASM transacted with over 816 vendors, yet in the current financial year (starting April 2013) the figure already stands at 1,716 – putting ASM on track to double the number of vendors before the end of the current financial year. This represents considerable acceleration over the previous year where ASM had 700 vendors in total (fiscal 2011/2012).

Iain Tomkinson, director at ASM suggests that the significant increase has been driven by major IT trends such as mobility, BYOD and cloud computing which have put pressure on resellers to offer more holistic, solutions-based offerings. Combined with an increasingly IT-literate customer base, resellers are being tasked to deliver much more than your traditional desktop PC and server, which requires access to a much broader portfolio of products.

“We attribute this huge growth to System Integrators and resellers now being required to offer a wider product portfolio to their customers, often including specialist commodities such AV equipment, smartphones and mobility solutions. Looking beyond the short-term logistical challenge of managing so many additional suppliers, the most innovative resellers are seizing on this opportunity to climb up the value chain, growing from low margin box pushers to selling high value, multi-product solutions.”

“The challenge for resellers is keeping their supply chain under control with so many new suppliers to manage. That is why many have chosen to partner with ASM as a means to rationalise their supply chains for tier 2/3 products. By using ASM as the primary supplier for these lower margin yet project-critical products, resellers are able to focus their time, effort, money and resources on the major tier 1 brands that bring in the most margin. Supplier rationalisation is freeing up resources so that resellers can focus their efforts on the relationships that matter.”

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David Dungay

Editor - Comms Business Magazine