Compaq plans just-in-time inventory

Mohit Chhabra

Compaq India wants to move to a just-in-time inventory management system to help out the under-capitalized second-tier channel partners in the country. Talking to DQCI in an exclusive interview, Ravi Swaminathan, Director (Access Business Group), Compaq Computer (India) Pvt Ltd, said that the way business is done in India, with extended credit, poses a challenge.

Compaq is now on looking for getting more money into the channel beyond the vendor credit, partly by screening people and ensuring that only those with finance are brought into the business. It is also looking at ways and means to shrink working capital requirements so that large inventories are not carried. 

Swaminathan agreed that margins are under pressure, but pointed out that volumes have significantly gone up in the same period. And, therefore, he believed that if one looked at the totality of earnings, they have been significantly protected. 


"There has been a degree of consolidation among larger partners and therefore they have been able to build volumes," said Swaminathan. And with Compaq offering products for every type of application, he felt that there could be a lot of opportunities for distributors to go up the value chain, like becoming technology partners for Compaq. He sensed that Compaq has been able to create a type of segmentation within the channel. 

As sheer market size goes up and PCs begin to penetrate smaller and smaller towns, huge channel opportunities are going to come up in smaller markets where traditionally viability did not exist. According to him, this will be a new area of business. In larger cities, there will be some degree of consolidation. "But even in larger cities, the sheer pace of growth of the industry will ensure that the cake gets larger," pointed out

Swaminathan.

(CNS)