Letter to Shareholders

Company Overview

Arrow-Leading Provider
  Discovery
  Support
  Innovation
  Knowledge

Arrow by Region
  Americas Components
North American
Computer Products
Europe
Asia/Pacific
E-Commerce

Financials
Selected Financial Data
Management's
Discussion & Analysis
Consolidated
Statement of Income
Consolidated
Balance Sheet
Consolidated
Statement of
Cash Flows
Consolidated
Statement of Shareholder's Equity
Notes to Consolidated Financial Statement

Directors & Officers

Tribute to Stephen P. Kaufman




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The technology discoveries of the past few years have brought solutions to the most pressing problems in medical diagnosis and treatment. Arrow teams have offered their discovery and design skills to thousands of medical equipment and systems manufacturers to help them develop and deliver the critical products that make those solutions possible.


Arrow sales to medical imaging, instrumentation, and scientific testing manufacturers (In billions)


Share of Arrow 2000 Sales


Using Arrow's web-based engineering tools, engineers are able to research components for performance and end-of-life rating.


Working side by side with a customer's engineering team, Arrow field application engineers suggest solutions to a difficult design challenge.


At the ASIC Design Center in Irvine, California, Arrow engineers test logic to ensure that the board logic is performing to customer specifications.

  

An annual mammogram detects early signs of breast cancer, creating more treatment options and the possibility of recovery. A CAT scan confirms that a child’s fall caused only a mild concussion. An MRI helps a doctor find the source of a patient’s back pain. A blood analyzer pinpoints the cause of an infant’s dangerously high fever. Advances in medical imaging and instrumentation have provided more information, early diagnosis, and help to millions of people around the world. Growth in the manufacturing of these critical products in 2000 drove an increase in Arrow’s sales to this customer segment of more than 40 percent year over year.

Manufacturers of medical equipment face unique challenges. Government regulations in most of the world require extensive approval of the components and products before manufacturing and delivery of the equipment to the market. Substitution of approved components is not permitted, and this leaves these manufacturers particularly vulnerable to changes in component supply and computer product life cycles. Arrow’s design services and end-of-life product management programs ensure that the approved components and products are available throughout the life cycle of the medical system.

From the time a medical equipment manufacturer first conceives of a new product, our engineers work with the customer’s design team on technical challenges and solutions. With more than 550 design engineers and dozens of design centers worldwide, Arrow brings the power of our suppliers’ latest technology solutions to customers. We have more engineers assigned to support sales teams than any other distributor. In the early design stages, Arrow field application engineers work with customers to design and finalize the architecture of the system. They tap into the latest and most advanced componentry and computer products from Arrow’s premier line card.

As a result of our close supplier relationships with more than 600 leading manufacturers, our engineers receive early training on products to which our customers have not yet had access. At our ASK Engineering centers in Denver, Colorado, and Thousand Oaks, California, engineers provide immediate answers to Arrow teams as they work with customer engineers on complex medical imaging systems designs. All of these resources provide faster access to newly introduced component and computer product technologies.

A medical equipment manufacturer cannot afford to design in components and products that will not be available for production after the lengthy government approval process is completed. Arrow has long offered these manufacturers end-of-life product management services where we purchase end-of-life products for the customer and hold and manage that inventory–sometimes for years–until the customer is ready to begin production.

Many manufacturers have been faced with the challenge of procuring components that are rarely purchased or have disappeared from the suppliers’ product lists, causing the components to be unavailable for the full length of the product’s life cycle. To identify potential product obsolescence issues in the early phases of design, Arrow launched a new service in 2000, a proprietary suite of web-based, component risk assessment tools. Design engineers using this service can access key technology information and evaluate specific components for pricing, availability, and end-of-life ratings. Each component entered receives a rating–green for go, yellow for caution, and red for risk. This web-based program provides engineers and production buyers with information in advance of changing market conditions, allocations, diminishing sources of supply, and shifts in component usage patterns. As a result, it significantly reduces the number of changes to the design and shifts those changes to earlier in the process, when the overall cost impact is less.

In addition to our field technical resources and web-based support, Arrow has 37 design centers worldwide for component testing to manufacturer specifications. Our ASIC and Intellectual Property Design Centers are full-service technology organizations that support custom programmable logic and ASIC technology needs. Certified ASIC engineers provide state-of-the-art services to test the logic to ensure that the systems are producible. If faults are discovered during testing, Arrow engineers can provide alternative solutions, which reduce design re-work and cost overruns.





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