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 dramatic expansion of worldwide telecommunications networks and wireless systems demands innovative approaches to supply chain management. In this environment, materials and supply chain management excellence is as important as the technology behind the equipment. Arrow supply chain innovations make it possible for the right components to arrive in exactly the right place, at the right time, and in the exact quantity needed. . . everywhere in the world.


Arrow sales to telecommunications, networking infrastructure, and wireless communication system manufacturers (In billions)


Share of Arrow 2000 Sales
Networking infrastructure 26%
Handsets/cell phones/
     mobile units 4%
Wireless/optical 9%
Voice/data/cable 4%


In Hong Kong, Arrow Asia/Pacific managers plan the implementation of the solution at their customer site.


In Melville, New York, supply chain specialists work on an integrated solution for a global customer.

  

A child working on a computer watches a video being sent directly to her desk from a classroom on the other side of the continent. An executive on a street in London logs on to the Internet from his mobile phone to read today’s newspaper headlines. A large, global company connects all of its employees around the world on a computer network, enabling them to share information and coordinate business activities. A cable connection to a home brings both television programs and high-speed Internet access.

It takes literally tens of thousands of components to build the telecommunications networks and wireless communications systems that make all of this possible. Arrow teams around the globe work with manufacturers to deliver innovative supply chain solutions to manage the flow of these materials to the production line.

Fiber optics, digital signal processors, RF technology, cables, switches, routers, connectors, trunk lines, discretes, logic devices–the list of components and products used in telecommunications equipment and infrastructure manufacturing is virtually endless. New component technologies are introduced to the market every day. Manufacturers work under constant pressure to incorporate and to leverage technology innovations to improve our communications capabilities. To accommodate the demand for communications in emerging economies, these customers often have multiple manufacturing sites in multiple countries.

Perhaps nowhere are Arrow innovations more evident than in our ability to design complex and flexible supply chain solutions that cross borders and continents. While Arrow technical teams work with the customer on the initial design, Arrow materials management and supply chain experts work in parallel with the customer’s purchasing and manufacturing teams to develop the best procurement, supply chain, and manufacturing strategies for the product.

Arrow materials planners conduct detailed needs analyses and inventory profiling. Arrow supply chain specialists evaluate options for delivering components to the manufacturing group for cost efficiency, flexibility, and impact on speed of manufacturing and time to market. They recommend solutions to help the customer migrate to more efficient build-to-order processes, where inventory is available on a just-in-time basis. If the customer decides to outsource manufacturing to a contract manufacturer, the Arrow team works with the customer’s partner to plan materials needs, to reserve customer-specific inventory, and to deliver the components needed for production. From planning materials, to identifying manufacturing partners, to selecting needed Arrow physical value-added services, the Arrow team stands ready to help manage the customer’s total supply chain.

Arrow specialists have the broadest range of materials and supply chain management solutions to offer. Combining the right services and programs for customers creates a custom solution. An in-plant store to ensure the immediate availability of parts, combined with an electronic data interchange that allows system-to-system forecasting and materials delivery scheduling, reduces the customer’s inventory management and product handling costs and ensures product availability. An Arrow CARESTM auto-replenishment solution monitors the use of parts during production and automatically replenishes supply as needed for just-in-time manufacturing.

Designing a supply chain solution to serve multiple geographies adds numerous complexities. Beyond the obvious implications of multiple sites, materials flow and processes must be consistent where the customer demands consistency, and customized to the local practices and culture where the customer needs them to be. The level of service at the in-plant store in Rochester, New York, has to match the level of service at the in-plant store in Singapore. Arrow teams in different countries communicate daily to respond to customers’ global and local requirements.





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