Distribution:<BR>Middleman's Mantra: Know Thy CustomersDistribution:<BR>Middleman's Mantra: Know Thy Customers

A perennial problem facing distributors is determining what customers want. That's because customers usually deal with the distributors' clients--often retailers and dealers--and not the distributors themselves. The Internet, though, is helping distributors get in touch with the ultimate customer.

Ingram Micro Inc. initiated a data-mining project, with the help of dating-mining experts at the University of Arizona, to collect and analyze information on customer-buying patterns and behaviors. The initiative let the $25.2 billion-a-year PC distributor identify attrition patterns among end customers so it could develop programs to keep them. Ingram Micro employed Microsoft online analytical processing tools to create sales portals that use Microsoft's Digital Dashboard to distribute customer information to sales associates, giving them opportunities to generate more revenue by knowing what and how to sell to customers.

Avnet Inc., which distributes semiconductors, embedded systems, and other computer products, employs Internet technology through an operational data store to capture detailed product information from suppliers, such as price, speed, and capacity of electronic parts. The company, with $12.8 billion in annual revenue for its fiscal year 2001, then uses WebMethods middleware to convert data in an Oracle database. WebMethods lets customers customize and interpret the data.

In July, Avnet struck a deal to process EDI transactions for IBM and its reseller customers. "IBM was looking to maintain its business processes without reengineering the way it does business," says Bill Chapman, senior VP and group information officer at Avnet's computer marketing group. Avnet's flexible architecture let it adjust to IBM's EDI method, while continuing to process other transactions using different EDI standards such as RosettaNet, a standard used by Hewlett-Packard and some of Avnet's other customers. "Our ability to adapt to help suppliers and customers be successful lets us add value to the supply chain," Chapman says.

Adding value beyond the parts and finished goods is what distributors strive for, says Jack Maynard, research director at Aberdeen Group. Someday, he says, customers may be able to log on to a distributor's site to get inventory information about an order that's being assembled from different locations. He says a customer "doesn't care if it comes from multiple places. He just wants one shipment."