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A meet-in-the-channel approach for a software-defined storage customer

Posted on
December 4, 2019

The solution

We designed a fully custom and integrated meet-in-the-channel business model that matches our customer’s solution and meets their objectives. Then we built a custom manufacturing and distribution facility for our customer at our flagship campus in Milpitas, California. With state-of-the-art manufacturing equipment, automation robots, and highly experienced engineers and operators, it’s one of the most advanced facilities in the world.

Flex’s custom global direct order fulfillment solution, “meet-in-the-channel,” helped our customer optimize their financial and operational efficiency. This strategy makes 100% of the order billable directly to the distributors, allowing the hardware inventory cost burden to never touch the customer’s financial books. This valued financial objective allows our customer to report higher margins and higher valuation. The channel model also enhances operational efficiency and end-user experience by reducing operational overhead while automating order management, yielding faster response time and throughput. This also allows optimization for RMA and logistics with electronics workflow and faster turnaround times.

Because our customer receives significantly higher order volume in the final days of each quarter, we designed a system to enable consistent throughput regardless of demand. This includes not only ample inventory and on-demand vendor ordering agreements, but also manufacturing processes that drive efficiency and enable scale. We assemble products up to 80% of the way before they’re ordered so that they’re ready for configuration. And we modify our modular lines in a matter of minutes to meet changing demand.

These operations replicate globally. With 100 sites in more than 30 countries and 16,000 global suppliers, our facilities, workforce, and relationships create efficient and reliable operations. Our footprint is intentionally designed for our customer’s regional and global growth: we offer flagship locations throughout the Americas, Europe, the Middle East and Africa, and the Asia Pacific.

The outcome

Our customer chose us for our deep design, engineeringmanufacturing, and systems integration capabilities. And they’re getting it — we can ship an incredible number of products in 24 hours. We’re equipping our customer to deliver excellent customer service and respond with agility as they grow.

Our global footprint makes it possible for our customer to expand worldwide as well, with a significant financial advantage. Our global direct order fulfillment solution makes entire orders billable to distributors, which allows our customer to avoid hardware inventory costs. They remain a close-to-100% software company, yielding significantly higher profit margins that protect (or even raise) company valuation. Their books show low capital outlay. And we manage our customer’s credit risk directly.