Avnet celebrates 20th anniversary of 'speedboat' business model and pursues innovation in IoT and AI
Avnet EMEA, the regional business organization of Avnet, Inc., is celebrating the 20th anniversary of its ‘speedboat’ model, which is the term used by Avnet to describe how its individual distribution companies do business. Essentially, the Avnet business units operate from day-to-day upon an independent basis, while benefitting from Avnet’s robust financial and logistical corporate structure.
The speedboat model, so-called because it comprises a series of smaller entities that can deliver a faster and more agile approach to the market than a much larger but slower moving vehicle such as a super tanker. Overall, the model has enabled Avnet to drive demand creation and vertical segment support to a new level, embrace market changes much faster and more effectively than many other large organisations.
The new millennium ended a decade that had seen massive global expansion for Avnet in Europe – with the acquisition of about 20 distribution companies – from the acquisition of Access Electronics in 1991 to the EBV Group in 2000 – growing the parent company to almost US$3 billion in revenues. This consolidation of small- and medium-sized distributors into one global organisation was an important strategic move to create partnerships with global suppliers and service large customers.
Avnet’s speedboat era began in 2001 with semiconductor specialists EBV Elektronik, WBC and Silica, in addition to Avnet Time for interconnect, power and electromechanical (IP&E) devices and Avnet IMS for supply-chain services & solutions. This was followed by the acquisition of the Memec group in 2005 and the Abacus group in 2008, further strengthening semiconductor and IP&E fields, respectively, and then MSC Technologies in 2014 to help build the company’s reach into embedded boards, displays and systems solutions. Various incorporations of the acquisitions have resulted in the Avnet EMEA business units we see today, including EBV Elektronik, Avnet Silica and Avnet Abacus.
“The speedboat strategy was heavily focused on demand creation – helping customers to find new technologies to set apart their designs and products. At the same time we encouraged the idea of complementary and also competing distribution business units, with overlapping franchises. To make it work and ensure it is capitalizing on Avnet’s size and scope, we had to put it on a fundament of financial, logistical and IT strength,” said Mario Orlandi, President Avnet EMEA, Global IOT & Avnet Integrated. “It allowed the ‘speedboats’ to move at different speeds with regards to IT integration and to try out concepts of a different nature, such as board-based business opportunities, software, value-added services or vertical market segments.
“Looking forward, we foresee a doubling of the EMEA market in the next ten years, partially driven by new technologies such as IoT, AI and highly integrated embedded products. However, the introduction of new technologies will only be successful if you fully understand their benefits in a specific use case, which is where our experts in the field will make the difference for customers.”
Slobodan Puljarevic, President EMEA, Global Design Chain & Supplier Management, added: “Additional growth will also come from major manufacturers increasingly relying on distributors to deliver goods and fulfil orders, even with their larger and previously direct customers. Both customer and suppliers are realizing how our capabilities in that field can help them to decrease risk in their supply chains. The transactional nature of our business will always remain and will increasingly be determined by efficiency and process optimization.
“There is also little doubt the Avnet speedboat model will evolve over time with manufacturer consolidations and new dynamics from the market. Perhaps it will become ‘Speedboat 2.0’ – whatever is required to enable us to continue to deliver a world-class level of demand creation, supply chain service and whatever else local and global customers may need over the next two decades and beyond.”