No one can accuse Ingram Micro of being arrogant. It just wants to bet outlines his plans and values. the most successful distributor in Europe and - eventually - the world. It wants to be 'significantly bigger' than all of its main rivals in the countries in which it is active. It's an ambitious company and that, from a reseller's standpoint, is probably no bad thing.
But what really counts is what the distributor can do for the reseller business. This is what will make the difference between being Europe's biggest broadliner or one of the chasing pack.
Ingram Micro is not an easy company to get to know. Ever since its arrival in Europe through the 1989 acquisition of Softeurop - a software distributor based in Brussels - it has remained relatively alien to outsiders. We know there is a model, a formula, to which the company works and that it has considerable buying power and resources behind it. It is one of the top European distributors but does not talk about its sales figures - although we know this year they are approaching $4 billion.
Ingram is certainly ambitious, but little else about its culture, about the personalities that run the organisation - in Europe particularly - and about its attitude and approach to business has been revealed.
The distributor has not had an easy run of it in the past year. Several key executives have left the European business, including European executive vice president/president John Winkelhaus III and Martin Blaney, former boss of the UK business and vice president of central European operations.
From an outsider's point of view, Ingram is run by a few powerful individuals, and relies on the underlying system more than the personalities that work within it. But is that really how the distributor operates? Or is there more to it than that?
According to Philip Ellett, Ingram's senior vice president and chief operating officer, the European operation's central aim is to be profitable.
'We want to be the number one distributor in Europe. We believe in protecting our shareholder values. What we are interested in is profitable growth and we have to achieve that.'
Ingram is unquestionably a powerful organisation. It operates in over 120 countries and works with over 1,000 vendors. Its 1996 sales were up 39 per cent to $12 billion, and last year's figures are expected to be $15 billion. Its 1996 profits were $130 million - a margin of barely one per cent.
While Ingram won't discuss specific European figures, Ellett intimates that the company is performing just as well over here - but he refuses to be specific. It may be this restriction that leads some to speculate that Ingram is not doing as well as it says across Europe.
But growth is the objective - both organic and through acquisition. What's good for European dealers is also good for the Wall Street traders, Ellett says. 'The way to achieve growth in Europe is through customer satisfaction, so all our efforts and our investments will focus on that. Customer satisfaction leads to long-term growth and that leads to profit'.
Ellett thinks the three most important strategic advantages Ingram has are: its people - called 'associates' by the company - its logistics, and its investment in and dedication to the advancement of the organisation and its staff. But all of this means nothing, he adds, if you don't listen to the customer.
Customer service is a major theme for Ellett, something which he feels Ingram is doing well, but could still improve upon. The key to getting it right, he says, is having the right people. 'You can never be too good.
I think we are making a lot of progress, I think we are doing well, but we want to do extremely well. I think what customers want is someone at the end of the phone who can make decisions, and that means that we have to recruit correctly, we have to train and we have to motivate people.'
Even with very low distribution gross margins - Ingram won't talk about margins either, but most believe they are currently about two per cent - Ingram intends to provide a level of staffing that will meet customer needs, says Ellett.
'People are not expensive. Un-educated, poorly-trained, non-motivated people are very expensive. We will never be satisfied with the level of training. We will never be satisfied with the level of empowerment in the organisation.'
But what Ingram claims sets it apart from others - a service where someone can make decisions then and there on the phone - can also be claimed by most distributors in the market. Also, dealers tend to take a cynical view of all such claims and point to their own worst ordeals. In the end, it's experience that will count. What Ingram, like all other distributors, must do is make the dealer experience of the company a good one.
Of course, service is important as well. Ingram, naturally, claims it can deliver both - attractive volume pricing and the services to back up specialist areas of business.
Providing service is a simple process. If you listen to the customer and determine what services are important and do it in a cost effective way, you can deliver good service levels. We want the dealer to be able to say that, as a result of doing business with Ingram, we are more efficient and more profitable.'
But can Ingram do everything? Ellett says not. But he does think it can do most things, and do them well. 'There are lots of lines you draw, but it's not just economics. Clearly, if I tried to provide a product or service and I thought that I couldn't provide a decent return, I wouldn't want to do it. But there are other lines you would draw. If it is not core competency of ours, or a competency we could develop, I wouldn't want to do it. If it was not in line with our values or strategic direction, I wouldn't want to do it.
'The bottom line, when listening to customers or vendors, is determining what they need in order to make themselves more efficient - and then responding with a set of products or services we feel confident about and we can stand behind in terms of quality. And yes, we are a public company - we answer to shareholders and we have to provide a return to those shareholders.'
Ingram tries to engender a number of values in its business and these are important, says Ellett. The distributor issues a small booklet to all staff outlining them - seen dotted around desks in the Ingram offices in Milton Keynes.
A flyer for resellers is also available (see box).
But Ingram needs to do a better job on communicating these, says Ellett.
'We are a values-based company. I think those are values that I feel very comfortable running my business life and my personal life against.'
They should be important for the reseller too, he says. 'I would say that a reseller would want to do business with a company that has integrity as a value. Without innovation as one of our core values, how do we know we are able to offer the reseller the best or the newest? Or that the choices we are offering are always updated, always improved?'
While Ingram does have a distribution model, Ellett does not see it as a centralised regime - it is more of a customer-focused approach. 'One of the very basic foundations you have to have in distribution is cost efficiency. Nothing happens if you can't pack and ship efficiently. Another foundation is IT capability and you have to get those right and provide effective account management, so that when a customer calls they speak to an educated person who can give answers.'
It's also necessary to take a different approach in each country, he says. 'Customer satisfaction is as powerful in Spain as it is in France.
We'll never say: there will be one Ingram Micro Europe and this is what it will look like. We believe we will regionalise those things it makes sense to regionalise. But French people like to do business with the French and the number one person who knows what is right for the French market is the French MD.'
Reseller needs vary from country to country. It may be more important in one country to have longer or more flexible credit options than it is to have fast technical support. For this reason, Ellett does not see Europe becoming one distribution market. E-commerce will be important but it won't lessen the need for personal attention on a local basis.
'I do not believe it's going to replace an educated motivated staff,' he says. But e-commerce is going to be very important and we're going to continue to make heavy investments in that area.'
Ingram's UK ordering is now up and running and, according to one company source, is proving effective - particularly for large corporate orders for standard products. Ingram will be rolling out capability across Europe over the next few months. Eventually, this will give the customer real-time price changes and inventory information.
But systems and logistics alone won't make Ingram different. Ellett understands this and believes that if Ingram wants to be the preferred choice for the reseller it will have to earn that right. 'I want to earn the right to maximise my business. You can't overcommunicate with customers - they want facts, they want information.'
He also firmly believes that Ingram can be both the service provider and the volume distributor. In fact, he says, one can't be done without the other and in areas in which Ingram has chosen to specialise, Ellett believes it outperforms most specialist distributors in terms of its service levels.
'That's where you have to work with the reseller partners and help them - in lead generation and marketing services - to help them win business.
We've got to understand their needs better and recognise that in specialist areas there is a different set of needs.
'We have never got to the philosophy of one size fits all. If we can satisfy a customer requirement by putting together a unique programme or suite of services we're going to do it, provided they are services that we can offer and deliver with a fair price and a high degree of confidence.'
The desire and capability to provide service has always been paramount at Ingram, according to Ellett. Price and availability are important but so are service, communication and feedback, product range and general services. Ingram, claims Ellett, is doing a better job than most of using its global resources. 'The consistent implementation of logistics and our service levels comes out of being part of a worldwide organisation with worldwide IT capabilities. The quality of our sales people and our associates in general comes out of our global commitment to training and development. I think there are significant advantages that come out of core structure - we want to provide a solution, we want to provide value, but we know we have to be cost-efficient as well.'
Nothing is set in stone at Ingram and the distributor will go on modifying its approach and its services to meet the changing needs of the market, says Ellett. 'If you served the same dog food every day and the dog didn't show up for lunch, you'd probably change the dog food, right? Or change the dog.
'We don't fear change - change is good. Innovation is good. All we seek are new opportunities, new markets, new efficiencies, and new ways of doing something we can pass on to the customers.'
INGRAM'S VISION AND VALUES
Ingram offers these statements to its customers, and tries to engender the values in its personnel.
The vision: 'We will always exceed expectations with every partner, every day.'
The mission: 'To maximise shareholder value by being the best distributor in the world.'
The values: 'We commit to these values to guide our decisions and behaviour.'
Teamwork: 'We promote and support a diverse yet unified team. We work together to meet our common goals.'
Respect: 'We honour the rights and beliefs of our customers, shareholders, suppliers and community. We treat others with the highest degree of dignity, equality and trust.'
Accountability: 'We accept our individual and team responsibilities, and meet our commitments. We take responsibility for our performance'
Integrity: 'We employ the highest ethical standards, demonstrating honesty and fairness at all times.'
Innovation: 'We are creative in delivering value to our fellow associates, customers, shareholders, suppliers and community. We anticipate change and capitalise on the many opportunities that arise.'
Highlander MD Steve Brown tells CRN about the skills he learned on the pitch and brought to the boardroom
Reports suggest Dell is pursuing a straightforward IPO, contradicting existing plans to buy out tracking stock holders
Analysts predict upturn in PC market next year, but 2018 to remain plagued by components shortages
Neil Sawyer claims he has 'never seen so many conversations about a new method of investing in workplace technology'