Report on Memec

Report on Memec
Founded in 1974 Memec are a leading global semiconductor distributor. They specialize in demand creation and servicing the electronics industry. They are a large company with more than 2,400 employees, including 1,800 field application engineers (FAE?s), technical sales specialists, technical marketing professionals and account representatives. Even though they are not a publicly known company, they are very well industry known and sell to companies such as Sony, Motorola, Hitachi and Siemens, as well as buying from companies such as Ericsson, Intel, Sanyo, and nec. Unique Memec is a branch of Memec, as well as Insight and Impact, but this report will look at Unique. Unique was created to further realize Memec?s technical focus of promoting a limited number of complementary semiconductor manufacturers. With their team of highly trained field application engineers Unique can specialize in providing their customers with the best they possibly can, ensuring they are pleased and continue to work with them.
This success can be seen by the fact they have more than 140 contractual relationships, and through this they can offer over 20,000 specialized semiconductor devices. Ownership Unique memec is a private limited company that at the moment are looking into selling shares to the public and becoming a plc. A private limited company has over 20 owners and sells shares to employees and friends, not the general public. Private limited companies tend to be smaller then PLC?s but many actually have more share capital. Advantages: � The owners have limited liability ? probably the most important advantage, means they are only liable for money they have put into the business, and no more � Memec Unique have protection of the company name ? the name they choose to use can only be used by them and no-one else. � New shareholders and investors can be easily introduced � There are better pension schemes and taxation � Being a Ltd company not all account information has to be available to the public, it can be through choice, this can be a huge advantage to Unique � Easy and inexpensive to set up � As main shareholders are usually directors ownership and control are closely connected � Easier to run than a plc Disadvantages: � If owners don?t own shares they aren?t really involved in running of the business, the shareholders are � The shares cannot be brought or sold with out agreement of the directors � Shares are limited ? can only be sold to family and friends � Share capital cannot exceed £50,000 � Cheques may be classed as less reliable than those from a public limited company � Cant benefit from economies of scale Soon enough Unique Memec will be selling shares and turning into a Public Limited Company. They can sell shares on the stock exchange to the general public. Public limited companies include Boots, Sainsbury?s, Tesco etc. Advantages: � Unique will be able to raise capital from selling shares to the public � They will be considered lower risk than private limited companies so may find it easier to obtain loans � They will be able to get better credit off suppliers Disadvantages: � They will have to produce accounts which any rival business can see � The cost of floating a business on the stock exchange is high � Unique wont know who?s buying their shares Strategic plan Memec?s strategic plan includes: � vision 2005 � mission 2005 � core strategies � core values � they also have bhag (Big Hairy Audacious Goal) of 777 by 2007 Vision 2005 ?We are the global leader in design solutions and distribution of specialized semiconductors." Vision elements: The people edge ? we will be a great place to work where the development of our people gives us the competitive edge. Information excellence ? we will provide the information needed to measure, drive and grow our business. Shareholder value ? we will maximize shareholder value by delivering profitable growth and superior return on capital relative to our industry. Valued partner ? we are a team of highly motivated, focused professionals who are valued by out suppliers and customers. We will earn the right to serve out partners by providing flexible, responsive and cost effective means of meeting their needs. Solution provider of choice ? our design solutions are second to none! Mission 2005 ?We add value to suppliers and customers to bring technology products to the world. We integrate technical sales, design services and supply chain solutions for semiconductor manufacturers, OEM?s and ems providers on a local, regional, and global basis. We maximize value to shareholders? and partners while providing rewarding career opportunities for Memec employees." They have a bhag of 777 by 2007 which means by then they want to be making $7 billion dollars with a 7% profit. Core strategies Memec?s core strategies are the means and methods which they will use to move Memec from where it is today to their vision for 2005. ?IT systems ? develop and implement IT tools to measure, drive and grow our business Performance Excellence ? develop our people and a performance culture as a great place to work to give us a competitive edge. Process improvement ? drive greater efficiencies, improved margins and best practices in all areas and functions of Memec. Lead by design ? enhance our demand creation and design services differentiation as our competitive advantage. Customer Intimacy ? enhance long-term customer relationships to become the provider of choice, globally. Supplier portfolio ? continuous development of product portfolio with high growth potential and characteristics attractive for demand creation" Core values Their core values describe how they should act in order to accomplish the tasks that help them achieve their mission. Acting in accordance to these principles creates their desired culture and guides the behaviours of all Memec members as they serve their constituents. ?Accountability (be responsible for actions and results) -set and achieve clear, measurable objectives; do the right things and do things right; take responsibility for improving performance, knowledge and skills and lead by example. Innovation (introduce creative new methods and ideas to adapt to changing business requirements) ? create leading edge ideas and solutions; take the initiative to find new and better ways of doing things; be willing to act quickly and adapt to new challenges and introduce, manage and accept change. Integrity (behave in accordance with the highest ethical and moral standards) ? demonstrate honesty and truthfulness in all actions; uphold commitments and deliver on promises; act in accordance with company policies and be fair, credible and consistent. Openness (be accessible, approachable, and willing to receive and share with others) ? maintain an open door policy; make suggestions and be willing to challenge the status quo and seek out, listen to, and value the ideas, thoughts, and feelings of others. Passion (conduct our business with an intense desire to succeed and a drive for excellence) ? be results-orientated and focus on excellence; take pride in all that you do and put your heart into your work and the company. Teamwork (inspire people to work together as a team to reach common goals) ? promote open and hones communication; involve other in decision-making process (get the data, debate the issue, make a decision, then commit to actively support the plan); value diversity of opinion, contribution and style; give and receive both positive and constructive feedback and respect each other and have fun." The company will use its vision, mission and core values and strategies to gain success for the business. They will aim towards these and use them as guidelines for all staff in order to reach their goal. Even if they don?t reach it, if they follow these they should reach some amount of success even if it isn?t as big. If the company reaches their vision for 2005 they will have been very successful because they aim for it but they don?t know if they will reach it or not, so if they do they have worked well. Overall I think Memec Unique are on track with their vision; core values and strategies; and its mission. They are aimed at the high end of the market and by looking at the high end of the market and by looking at graphs etc. it appears they are doing very well and achieving most that they want to. Time will just see if they can reach their bhag and see if they truly are on track with what they want to achieve. Their core values and strategies show customers and employees what they hope to achieve and how they want to do it, which keeps everyone in the know so they can help them to achieve their goal. This can be linked to the culture and management style of the business. The companies culture seems to be mainly role culture but is adapted to task culture at times (with the FAE?s for instance), as with every company they need to adapt different styles to different situations. They use role culture in the offices for sales marketing etc whilst working in a team; they each have their role to sell in a certain area. They use the task culture with the FAE?s to design products to meet their mission of being the worlds leading semiconductor distributor. This way of having two cultures works well for the company as they are a successful company. The management style also has an impact. Being democratic (and sometimes autocratic) employees are in the know so are more comfortable working; i.e. if the sales team are informed of future products they can inform customers. Measuring the success of the business The main way Memec measure their success is by a company called afdec (the Association of Franchised Distributors of Electronic Components). They collect information about the whole market which Memec can use to determine whether they are doing well or not, and if they are top or not. They can see how well, or not so well, their rivals are doing; who future rivals may be; and if they have taken a dip in the market. This is a very useful form of comparison because afdec produce bar charts on total sales growth; product group sales growth; bill ratios per month; forecasts; and average daily sales as well as quarterly statistics. They can also use information from neda (National Electronic Distributors Association) to help compare their success to other businesses. They also produce bar charts on shipments, billings, turnover and day sales some of which are over the page. Another way Memec can measure its success is by looking at their competitions accounts to see how well they are doing. This is a big advantage to Memec as they are a private limited company so don?t have to produce accounts that people can access, all of their rivals however are public limited companies so have to, this gives Memec the edge because they can view their accounts but their rivals cant see theirs. They can also compare their success by looking at past data from their own company. By comparing growth and profitability etc. they can see if they have gained more market share, increased sales or their net profit margin or any other information which can help then to see if the business is growing or if they need to take action to improve sales. They also compare their present and past profitability with other companies or the average for their market to see where they are. They also compare it by region e.g. America, Europe. There are some examples of Memec?s place in the market and how they measure their success over the page. They also use a company called neda which shows information to different sections of the industry. It can be used in the same way and some examples are shown over the page to. They can also use swot (Strengths Weaknesses Objectives Threats) analysis to determine areas they are doing well or ones they need to look into. This is Memec?s swot analysis for 2005: Strengths Weaknesses 1. Design/demand creation strategy/competence 2. Supplier-centric 3. Decision-making agility 4. Open management/culture 5. Empowered, performing employees 1. Lack of global consistency (strategy, standards, best practices, policies, procedures 2. Lack of design tracking capabilities 3. Information systems (including disaster recovery)/ knowledge management systems (not integrated and inadequate 4. Lack of global H/R strategy 5. Disconnected incentive schemes 6. Over reliance on few suppliers/ (narrow market focus/ line card(s) Opportunities Threats 1. Technical expertise (leverage Memec Design) 2. Global strategic planning/execution/communication 3. Global line/channel expansion 4. Global consignment 5. Potential rep opportunities (rep business) 1. Disintermediation by CEMs / 3PLs 2. Supplier pressure to ?unbundled? services 3. Margin erosion 4. Continued industry consolidation/preferred supplier programs 5. Growing decrease of supplier design win leverage with customers / CEMs 6. Competitors / CEMs developing design competencies How the business works There are many different areas in the business. The main ones being: marketing; sales ? internal and external; asset management; product management; logistics and warehousing; technical and finance and accounts. Each one is important to the success of the business. Marketing Without marketing how are people going to know what you are selling, and that your business actually exists. Successful marketing is crucial to a businesses success, letting consumers/customers know that your there. Unique are lucky in the fact they don?t have to advertise publicly but need to stay competitive in their industry, making sure companies use them over their rivals. Sales Internal ? internal sales are also an important part of the business. They need to keep good customer relations and convince people to buy their product over a rival company. They also need to keep a quote log and know how you a complicated stock system. Different SIR?s (internal sales representatives) are given a different area to sell to, they report to their asm (area sales manager) who deals with external sales. External ? ASM?s deal with customer meetings mainly and out of office work. They will travel in their given area, i.e. south west England, north England etc. and visit customers to improve customer relations and make deals. They also visit the office to see their ISR?s to check everything is okay and there are no problems. Asset management Also another important part of the business but this is more to do with the running rather than selling. Asset management involves the business looking at what it owns, i.e. stock, building, software, etc to help calculate how much the business is worth, cost of ownership, depreciation etc. this can help the business when it comes up to writing the balance sheet and profit and loss account. Product management This wont be as big as it is for most companies as Memec don?t actually make their own products, they buy in and sell on. But they do ?lead by design? so try to help fit products to a customers specification. They also need to know what products they sell, have in stock, sell etc so do need some aspect of product management. Logistics and warehousing Logistics basically involves the moving around of products, either around, to, or from the warehouse. Unique use ups to distribute all their products as most are small packages so don?t need specialist carrying. However, when products are bought to them it depends on the manufacturer who distributes them. Technical You could say the technical side of unique is where their success comes from. They have a team of highly trained field application engineers that are trained to work with the best equipment in the industry. Where other companies buy in cheap products, unique by in the best, and their lead by design slogan works by these highly trained workers helping customer fit circuit boards to their needs. Finance and accounts Finance and accounts are another major part of the business. After all, 70% of new businesses fail due to poor cash flow management so they need to keep on top of things to enable success. The structure of a business is quite important to, it can sometimes determine the management style, culture and way in which the business works. Unique have a flat organizational structure yet it has a wide span of control, but overall Memec had a typical tall hierarchy. There are four main types of business structure: formal hierarchy; matrix structure; entrepreneurial structure and web structure. Formal hierarchy Most big organizations have a formal hierarchy, especially plc and ltd companies (for example, a sole trader is more likely to have an entrepreneurial structure). Memec have such an organizational structure. This is what works well for them and with a lot of employees they need this to keep order within the business. This is also suited to a role culture. Advantages: Ÿ Clear defined lines of authority Ÿ Makes communication easier Ÿ People know their place and who they report to; chain of command, span of control etc Disadvantages: Ÿ Communication is slow Ÿ Information may be misread or lost Ÿ Communication is hard between functions i.e. marketing talking to Accounts, may not need to go up but may have to Matrix structure This is also common for some large organizations. It involves different people for different departments coming together to design/make/market a product. It doesn?t matter how high up they are or what level of responsibility that have when they are in the team they are all equal and will work together to get the best results. This could also suit Memec, the unique branch at least, as it has a wide, flat structure. This suits a task culture. Ÿ Advantages: Ÿ Once people are in a team they are motivated because of the given responsibility Ÿ Tasks are completed to the best they can be i.e. in Memec a technical team are highly trained so can do the job better than anyone else. Ÿ Communication is clear as lines of authority are again clear Disadvantages: Ÿ People may try to take control once in a team if the are above the person in the hierarchy, this could cause conflict Ÿ Co-workers may become jealous that someone was chosen over them Ÿ Control could be hard, as the idea is to delete the idea of authority and that some are better than others Entrepreneurial structure (web structure) This is less common among large businesses. Although some may have started off as one then developed into a formal hierarchy. Virgin is a good example, Richard Branson started off as an entrepreneur and he became so successful he changed to formal hierarchy. This can prove successful for many people depending on how they want to work; most sole traders will work in this way. It had one person as the main person, and all the other workers report back to them, no different levels just two basic ones. This suits a power culture. Advantages: Ÿ Very clear communication as everyone reports to one person Ÿ Employees are motivated as they are kept informed and delegated work Ÿ Good for owner as they know everything that?s going on Disadvantages: Ÿ Power lies firmly at the top (autocratic) so employees may feel they don?t have a say Ÿ People may have to work independently rather than in a team Ÿ A small business, maybe not room for expansion? Cluster structure This one is the least common out of all four. Basically, it is just a group of people working together, no-one is in charge they all share responsibility and work. This suits a person culture. Advantages: Ÿ People are motivated because no-one is above them and they have responsibility Ÿ If work is specialized this structure can be successful for the business Ÿ Good for small businesses Disadvantages: Ÿ As there is no authority disagreements can arise and employees can argue Ÿ Can be difficult to set targets and objectives and get people to stick to them Ÿ Spending/budgets may be hard to control Depending on the organization structure it can affect the way the business is managed. For example, a matrix structure may have a democratic or consultative approach, and a formal may be autocratically run; this is to help keep order within a large business. However, you could argue that it doesn?t matter how big the business is, it?s what it does that affects the management style. For example, managers may need to adopt different managerial styles depending on the situation; they cannot run the same way all the time. There are four main types of management: autocratic; democratic; consultative and laissez-faire. Autocratic An autocratic manager likes to take complete control of all decisions made. They don?t listen to their subordinates in their span of control views on anything, they go by what they think is right. This is most common in companies with formal hierarchy?s with big organizations. Advantages: 1 Clear order, employees know what they are doing and when it has to be done by 2 Managers are more aware of what?s going on 3 This type of management style can sometimes adopt a piece-rate approach to pay which is good for employees because they have the chance to earn more money Disadvantages: 1 Workers may be de-motivated due to no responsibility and feeling of self-worth 2 Managers may have no respect from employees because they are so strict 3 Workers may not work to their full potential if they feel they are not valued by the company Democratic A democratic manager listens to their subordinate?s views before they make decisions. A democratic manager will also delegate work to subordinates, passing down responsibility so they can complete tasks themselves. Advantages: 1 Increased employee participation so employees are better motivated to work 2 Increased productivity because workers feel more valued by the company 3 Better ideas, as employees views are considered Disadvantages: 1 Employees may become too comfortable with doing their own thing and may not respect the managers orders 2 Decisions may take a long time to be made 3 Communication may take longer as more people are involved Consultative Consultative managers are mainly autocratic they just take their subordinates views into account before making their final decision. But at the end of the day, they make the final decision. I think this is the way Unique are ran, because although they state they listen to employees views, the feeling from them is that the company don?t actually care to much for what they have to say . Advantages: 1 Employees feel valued as it seems the manager cares about their views 2 As the manager makes the final decision some may view this the best way as they are higher up so know best 3 Managers can take subordinates views into account when making their decision Disadvantages: 1 Workers may still be de-motivated as the manager has the final decision 2 Managers may lean more towards the autocratic approach which can displease employees 3 Bad decisions may be made that could be avoided if the manager listened to employees views Laissez-faire A laissez-faire manager basically just leaves workers to their own devices. They don?t really consult them they just let them do what they want Advantages: 1 Employees feel motivated because they are given high levels of responsibility 2 Everyone?s ideas are taken into account so the best results are achieved 3 Good for the manager as they have less work to do Disadvantages: 1 Work may not be completed because manager doesn?t keep on top of things 2 Staff may become too independent and not listen to manager 3 Important decisions may not be made due to no-one knowing who needs to make them Another way you can tell how the company is run is its company culture. A company?s culture is ?the way we do things around here?. There are four main cultures that a business may have. They are role, task, power and person. Role Role culture is most common in companies with a formal hierarchy and autocratic management. It is the most common culture. This is the culture found in Memec and Unique. Although they encourage employee input they don?t really feel the company have much care for what they say, so it is basically a role culture business. Advantages: 1 Tasks are clearly defined 2 For workers, typically they don?t have to do anything above their job description 3 Communication is easier Disadvantages: 1 The job description is considered more important than the person that fills it ? they can de-motivate staff 2 Individual departments can become self-contained, ?guarding?their own power 3 It is more likely their will be a tall hierarchy, where senior management make the majority of decisions Task Task culture is most common in companies with a matrix style hierarchy with democratic management, people work in teams more and there is more input from employees. Advantages: 1 Workers from all levels are included in the business decisions 2 Better ideas are contributed because of more employee participation 3 Time is saved by people working closely together, and saving time can save money Disadvantages: 1 May not work in all businesses 2 Senior managers may not be happy because they no longer have most control 3 General control may be hard because people are working on different projects and are not necessarily at different levels Power Power culture is most associated with an entrepreneur or web structure. It is less common than the other two, and involves one person taking control of everything, giving out all the orders and taking ?power?. Advantages: 1 Decisions are made quickly 2 Employees and manager knows what?s happening and being done in the business 3 The business still has room for expansion so could become very successful Disadvantages: 4 People may feel under-valued if they have no say in the way things are done 5 Manager may become too self-involved and ?power mad? and this could affect the business badly 6 Employees may have no team work and my only do what they have to, i.e. not contribute more Person The culture is hardly ever found in businesses today. It defiantly wouldn?t be found in a large business, it is suited better to maybe sole trader business or group charities such as Greenpeace etc where they all do the same to help the business/cause. Advantages: 1 Everyone is equal so fee value and motivated 2 Employees are more willing to go further for the company because they are considered an important part 3 Increased team work which means tasks will be completed to a high standard Disadvantages: 4 No clear control so people may become too independent, also things may not be followed up properly 5 Communication may be poor as there aren?t any communication channels 6 Important decisions may not be made Unique?s organizational structure can be seen over the page. ict Good communication is essential for a business to be successful. Without it important messages can be lost or misread and this could cause major problems for the business. Communication is not complete until feedback has been received. Communication between managers and subordinates is vertical communication, where the information flows up and down the hierarchy. Communication between departments is called lateral communication; this is where the information travels across the hierarchy. Memec are a company that are up-to-date with current technology. As they are a big company with a lot of companies to deal with they have to be. They all have email, and people who work outside the office have mobile phones and laptops, and the sales team have up-to-date databases to help log quotes and check availability, price and incomings of stock. Employees of Memec can contact each other through email, phone, fax etc with no problems. Most staff have their own email address, phone, with the majority having cordless headsets. There is also a company intranet which employees have access to, to find any information they need. Internal communication Internal communication takes place in a business it involves a number of methods and informs employees of what is happening in the business. Employees of Unique can contact each other via phone, email, fax etc. with no problems. They each have their own email address and phone. This is also company intranet which employees can use to find information the need. External communication External communication is not as common in a business but still important. This will involve Unique sending letters out to customers, advertising, and leaflets being distributed. This can also include the customer visits the ASM?s make. Formal communication Formal communication is usually in the form of written methods such as: reports, letters, memos, emails etc and is often used within Memec. Group emails or individual emails are sent often during the day as it is the quickest method of formal communication. Informal communication Formal communication is typically not written, it is usually: telephone conversations, discussions, notes, short meetings etc. These methods are usually used so communication is quicker as a conversation is a lot quicker than writing a letter. Non-verbal communication The most common method of non-verbal communication is body language. It?s surprising how much you can tell just by looking at someone?s body language. You can tell if their uncomfortable or unhappy, or if their pleased or interested. This will be common in meetings and such. Verbal communication Methods of verbal communication include telephone, phone conferencing, face-to-face etc. These are commonly used in Unique. Each employee of Unique has their own phone so can call people easily; they also have an extension number. They also used phone conferencing with the help of the internet. This is for when they need to contact people all over the country; they have then all on speakerphone, then a slide show will be shown via the internet. Face-to-face can be used to solve problems simply. Another method is known as the ?office grapevine? where people pass on information by ?gossiping?. Written communication Various methods of written communication are used throughout Memec and Unique. Some of these include reports, letters (either to customers or suppliers), memos, notice boards, forms (order), graphs (sales etc), emails (to customer, to internal and external workers of the business. These are all frequently used and records can be made. There are a number of factors which effect what type of communication is the best to use. These are: 1 Cost ? this can have a major influence on what method the company use. Say Memec wanted to give a message to all their customers and they had all their email addresses, it would be far cheaper and quicker to send an email to them all rather than spend out sending a letter. 2 Speed and urgency ? this again can affect the decision because it is far quicker to send an email than a letter, or a phone call instead of a fax. 3 Formality ? if a business wishes to address an issue formally they would most likely choose to use letters rather than have a meeting, or send out a memo. 4 Convenience ? this links to emails over letters and phone calls, it is far more convenient for someone to send an email rather than waste time calling someone up or sending out a letter. 5 Need to record ? it is no use just saying something to employees of importance; it needs to be recorded so a letter would be a better choice for this type of communication. Quality control Memec use its quality service within distribution as well as customer service (i.e. sales team, FAE?s) to ensure customer satisfaction. They have no quality control of their own products as they don?t produce their own; they buy in and sell on. They do however; have a quality control system in place at their warehouses in Thame. In Q1 their quality statistics state they were 99.71% correct which moved up to 99.85% in Q2. They state that the majority of goods coming in and out of the facility are handled within 24 hours following receipt of instruction ?but on occasions, 48 hours must be allowed?. They aim to issue a Service Level Agreement soon so all offices are aware of their agreed operations. As well as using up to date technology they have also adopted an ?old fashioned? approach and are currently having a 100% cycle count of stock which they plan to of completed by Q3. As well as this they also operate a "Quality Management System which complies with the requirements of BS EN 9001:2000" which they have a certificate for (this can be seen over the page) iso 9009:2000 is an international standard for quality systems. It is a British standard that is recognized worldwide and companies who are registered can display the bsi symbol. Good quality can be vital to a business success. Customers expect a certain level of quality and are willing to pay more for higher quality products, they will sometimes choose a product to get considering the price and quality. To Unique/Memec good quality is essential for their success as they aim towards the higher end of the market. So ensuring quality assurance to customers keeps business and a good reputation. The warehouse is open 24 hours a day, 5 days a week; which helps them to ensure they deliver as quickly as possible so customers are kept happy. There are ways in which the quality can be improved. The company have even identified these themselves which again lets customers know they know where to improve so ensures customer satisfaction, and also shows they want their products to be of high quality. The rma system (Returned Materials Authorization) is not very effective or easy to use and is causing problems. They hope to introduce a new method which will be working with the midas system the sales team already use. They can see stock on order, stock being shipped, and stock available to sell (its also shows buffer stock and addresses to); this is a good system to use so connecting this to the warehouse would, in my opinion, be a very good idea.

Report on Memec 8.3 of 10 on the basis of 889 Review.