When Ingram Micro recently revealed its new $35 million warehouse, it also revealed, exclusively to ARN, elements of its game plan for the rest of the year.
2011 was a dark year for the company due to difficulties associated with transitioning to a new SAP ERP. It lost both business and revenue. But that, says Ingram Micro Australia managing director, Jay Miley, is all behind the company which has dominated the distributor space for much of its time in Australia.
“From our perspective we are singularly focused on figuring out how to improve the customer experience we provide our partner base, both from a partner and customer perspective,” he said. “There’s not an executive leadership meeting, there’s not a town hall [informal meeting] I do, that I don’t drill that home to our folks.
“We know that 2011 was a tough year for us and for our partners as a result of that. From our perspective it is behind us. We are moving forward, we are looking forward to the future.”
Sitting in the boardroom of its new Eastern Creek warehouse complex in outer Sydney, it’s easy to understand both his optimism and enthusiasm. The facility is impressive.
The state-of-the-art warehouse is Australia’s largest distribution centre, and sprawls over 40,000sqm. That’s twice as big as the Melbourne Cricket Ground. It has 34 docks, can hold more than 30,000 pallets, has three storeys of storage with two three-storey picking models in operation.
“We looked at what we believed our requirements would be for a 10-year horizon and essentially built and engineered the processes in the facility to support that,” Miley said.
“We built it so we can have some stability in the system for the next 10 years and with the stated goal of making us a lot more productive. Ultimately, that productivity gets passed onto our customers in terms of better quality and better costs.”
Ingram Micro director, operations and logistics, Michael Colagiuri, said, most importantly, the warehouse can also can be expanded over the next 10 years as need dictates.
He said the company owned the land behind the warehouse and could lift up the back wall and extend the facility back, creating a further 20,000 sqm.
Ingram expects to ship an average of 60,000 individual units a day. But the warehouse, which runs 24x7, has the capacity to shift a much larger number of units daily if required.
“What used to take 12 hours to ship at the old Matraville warehouse now takes six hours,” Colagiuri said.
When Ingram got approval to build the facility three years ago it was predicated on two things: the productivity improvements it would get and the new business opportunities it would allow the company to pursue.
One of those opportunities is IM Logistics.
“It’s not a new business for Ingram by any means,” Miley said. “We have several significant logistical partners in North America and Europe, and in Asia we are starting the business. We are one of the first countries in the region to leverage the opportunity.
“Previously, we had capacity bottlenecks in our system in Matraville that prevented us from moving forward on it.
“You need, space, you need capacity, and other things that were in short supply in our previous facility. We built this facility, taking into consideration those needs."
He said with logistics you move around boxes for a fee. "There is always going to be need for devices to be distributed places," Miley said. "We think moving devices around the world is good business.”
It is also a sign of its expanding nature as the old box-pushing-only days increasingly slip into channel lore. “For IT system resellers who make their margin through moving boxes it’s a hard business,” he said. “We add value by how we move boxes around.”
That said, he stresses how committed IM is to the market. “If you aren’t committed to a market you don’t spend $35 million. We made a major investment in this facility, in the systems, in the processes, so that we can help our partners both from the vendor and resell perspective grow their businesses in the future.
“I’m optimistic about the future as a result of the investments we’ve made here and some of the other investments you’ll see in the future. One of those is a new website we’re bringing to market soon.”
The website is a global platform that is already running in New Zealand. There were some hiccups when it went live there, Miley said, but the company learnt from them. It is now live in many other countries.
“I held off bringing it here until we were ready for it. We are in the process of rolling it out,” he said. “We have 55 customers using it at the moment. The plan is to have 500 using it in a beta trial by the end of May. Then we’ll expand it to everybody who wants to use it. We’re not taking away the old system. Our customers can continue to use it if they want to.
“The thing that is important to our partners is finding the product they want quickly. The search engine that’s been engineered into this website is world-class. You want to find something you don’t have to click to look for it. You type something in and it auto fills for you and asks ‘do you want this, this or this’.”
Services and the Cloud
And then there’s Ingram’s Services Group, launched in September 2011. In December it broadened the Group’s reach when it added education and training with the announcement of the Ingram Micro Training Academy (IMTA).
“The services are for us is a very small but very very important piece of our business,” Miley said. “ We are trying things. It’s got some nice ideas. I think there’s huge opportunity for training services, configuration services, logistics services. It encompasses a lot of things.
“Cloud services has got a lot of noise in 2011 and into this year. That means a lot of different things to a lot of different companies. The software vendors in particular have to set the stage on where that goes. They’re all trying to figure out what their strategies are still. We are dabbling in it and we’re prepared to take some risks and place some bets.”
And there is more to come from Ingram in 2012, Miley promised.