EMS Makes a World-Class Distributor Even More Efficient

Editor's Note: Ingram Micro is the world's largest distributor of computer hardware and software products. Based in Santa Ana, California, the company distributes over 16,000 products from 750 vendors. Its customer base comprises more than 40,000 computer resellers world-wide, including independent dealers, corporate resellers, national VARs, and mass merchandisers. Ingram Micro is part of Ingram Industries, Inc., a privately-held corporation which has other distribution operations in wholesale trade books, and prerecorded video cassettes. Ingram Micro reported 1993 revenues of $4.0 billion.

As a leader in the distribution industry, Ingram Micro understands the value of technology in maintaining a competitive advantage. "At Ingram, computer and distribution center automation systems make it possible for our company to take and process orders more quickly than our competitors," states Mike Kelly, Sr. Vice President of Management Information Systems. "My charter is to insure that Ingram continues to run competitively superior systems."

Kelly's data center provides computer services for Ingram Micro domestically, as well as for several international affiliates due to an aggressive Ingram acquisition strategy that resulted in added facilities in Singapore, U.K., Italy, France, Belgium, Germany, Spain, and Mexico.

Because of a global business requirement, Kelly's data center must provide 24-hour/7-day service. MIS supports the company's growing computing requirement with two mainframes: an IBM 3090 and a Hitachi Data Systems HDS 8310, both of which are running MVS/ESA as well as a large CICS environment that handles over four million transactions per day.

One of the keys to Ingram Micro's success has been a reliance on advanced technologies to produce operational innovations. For example, Ingram helped organize an industry task force to define Electronic Data Interchange (EDI) standards within the computer industry. Ingram customers who have implemented the EDI program can now place their orders electronically, thus helping Ingram shorten order processing cycles and further reduce its cost of doing business. The company continues to aggressively adopt new technologies such as bar codes and scanners, radio frequency transmitters, imaging, and computer/telephone integration.

In the late 1980s, company management recognized the potential of electronic mail to produce innovation and became convinced that E-Mail could enhance the company's competitiveness. An early E-Mail system was introduced in 1989, but requirements quickly exceeded the functional capabilities of the software.

In 1991, the company embarked on a search for a more advanced E-Mail system. Wren York, a Systems Analyst at Ingram, was tasked with developing a checklist of required features and evaluating the leading E-Mail systems. According to York, "Many Ingram users had resisted using the older E-Mail system because it was too hard to use. Even our CEO had complained about it. So ease of use was a primary selection criterion."

As York's evaluation progressed, EMS from CASI emerged as a versatile and cost-effective solution for Ingram. York liked EMS' comprehensive suite of E-Mail, office automation, and application development tools. In October, 1991,Ingram Micro installed EMS and began a pilot. By June, 1992, the product was ready for production roll-out. "We did a lot of marketing ahead of time to let users know that something new was coming. We published articles in IMPACT, our in-house employee newsletter. We developed a logo that illustrates what E-mail can do for people, and we use the logo any time we publish articles or technical tips on EMS. We worked with CASI to develop templates--with our logo on it--for both PCs and dumb terminals."

A major impetus for implementing E-Mail at Ingram Micro was the opportunity to streamline the flow of numerous forms used by users. The prior E-Mail system had provided only a rudimentary forms capability. "The forms weren't intelligent like the EMS Active E-Forms," notes York. "We couldn't control what an associate filled into a particular field--nor could we set up required fields. We couldn't designate automatic routing, so there was no way to control to whom the form should be sent. With Active E-Forms, we can now designate approval levels, establish proper routing paths for each form, re-route a form if necessary, and check status of forms as they move through the system." Ingram Micro has already designed 50 Active E-Forms, including Catalog Requests, Customer Maintenance Forms, Direct Shipment Requests, Factory Service Work Orders, COD Refunds, and Check Requests--and the company is adding one to two forms each month. According to York, many paper forms have been eliminated completely, so that if you want to request a check, the only way to do it is via an Active E-Form.

As a result, there has been a significant speed-up in processing of information and, thus, work performance. "For example, in the past, when sales associates needed information from purchasing concerning a particular product, they would fill out a Purchasing Request Form and give it to a sales manager. The sales manager then sent the form through interoffice mail to the purchasing department. Several people in purchasing might handle the form--a purchasing clerk, then the buyers, or the buyer's assistant. Once the information was checked and completed, it was routed back to sales. The entire process took about a week. Now, all this is handled electronically with an Active E-Form. The sales associate fills out the Purchasing Request Form online and sends it directly to the buyer. Buyers are able to turn around the information in less than 24 hours."

Additionally, if buyers get the same type of question from several sales associates, they can post the answer on an EMS Bulletin Board established for the sales force. As a result, the sales associates have immediate answers to their questions, and the buyers don't waste time answering repetitive questions.

Since the installation of EMS, E-Mail usage has grown dramatically. There are already over 2,000 users on the system, and that number is expected to grow to 3,000 by the end of 1994. "E-Mail is becoming an essential part of the way we do business," Kelly said, "and our senior management is very enthusiastic about it." Managers at all levels of the organization find EMS provides an excellent means of keeping in touch with the home office while they are on the road. Senior executives often take a laptop computer on trips and dial into EMS to check messages and communicate with co-workers at headquarters. "Now, even when my boss is out of town, I still get assignments," Kelly quips.

Ingram Micro has also expanded its use of EMS into other areas. The company now uses EMS to distribute reports electronically. "Our online system includes several programs that collect and maintain sales data and manipulate it," York explained. "We use that data to generate detailed usage reports for field sales to let them know what products their customers are ordering, and in what quantities." In the past, such reports were printed and routed via interoffice mail or the US Postal Service. Today, information is routed to JES and into the EMS report distribution facility for distribution electronically. "Before EMS, we could only give sales associates about one week's worth of information at a time," York observes. "With EMS, they now get a report every morning showing order activity during the past 24 hours. So when they talk to a customer, they have up-to date information. It's been a very useful tool for them, and sales have improved substantially as a result."

Reduced Telephone Costs

Kelly observes that using E-Mail for international communications has also reduced telephone costs. "When we pick up the phone and call Europe, we pay telephone charges. With EMS, however, we take advantage of the same phone line that we currently use for our data network. Since we've already paid for that line anyway, the E-mail traffic essentially runs free. We're saving a ton of money there alone."

Telephone charges are not the only area in which Ingram Micro has reduced costs with EMS. The company has reduced paper consumption by 20 to 25 percent. "Environmental issues are very important to us," York said. "We were one of the first companies to use recycled paper, and our CEO has set a corporate goal of reducing paper consumption. EMS is helping us make great strides in that area. With Active E-Forms, for example, we're eliminating paper copies of many of our forms."

MIS has also developed an online corporate telephone directory. "We currenly produce a new telephone directory every two months, and we print about 2,500 copies each time. As everyone knows, telephone directories are out of date the day after they are printed, so this isn't very efficient. With an on-line directory, however, changes can be made instantaneously so the directory will be much more up-to-date and we will only have to distribute hard copies to Ingram employees that don't have terminal or PC access to the online directory."

Kelly expects Ingram Micro will continue to expand its use of EMS because E-Mail enables his company to communicate more effectively and reduce costs. "With E-Mail, we spend a lot less time playing telephone tag. If I need to ask someone a question, I can send an EMS message and be confident I'll get a response. If someone removed our E-Mail system today, we'd have a major readjustment as a company--because we have come to rely on it so heavily. I don't think we could be running our operation in Europe as successfully as we do without EMS."

Priding itself on being the lowest-cost operator in its industry has led Ingram to use EMS to maintain its competitive edge in computer distribution. "As electronic mail systems become easier to use and vendors continue to add features," Kelly comments, "I believe E-Mail will become absolutely critical to the success of any company in the 1990s."