Strategy: Arrow Electronics

By Margaret Jackson | Jan 25, 2016

Company Details

VP of Global Logistics Solutions Tim Kolbus provides components to electronics manufacturers all over the world, as well as a road map for their supply chain.

Arrow Electronics is one of the biggest companies serving manufacturers of electronics, yet it doesn't make a thing.

The distributor, headquartered in Centennial, specializes in providing supply-chain solutions to more than 100,000 industrial and commercial users of electronic components through a global network of more than 460 locations in 56 countries. Arrow employs more than 17,000 people worldwide, and its 2014 revenue of $22.8 billion earned it a ranking of No. 131 on the Fortune 500.

But it's not just about moving goods from one place to the next. Arrow's logistics and supply-chain team must be experts in import-export laws and tax regulations of the countries its customers serve around the world.

"We're getting a lot of customers and suppliers who ask us to support them through logistics, supply-chain, and transportation services," says Kolbus. "We take those services we do internally and offer them around the globe. Every country has different import-export laws and tax laws that change every day. No one is able to figure that out on their own, so they look to Arrow."

That's particularly true of startups, which Arrow supports through accelerator programs and reaching out to its venture capital connections with the idea that they will get new products to market more quickly. "Startups leverage some of the services we offer more than others," Kolbus explains. "Logistics is not part of their core competency. Their capital is being used for product development."

In planning for the future, Arrow is investing in warehouse management and automation, as well as making changes in its trade-management group to support import-export requirements. Kolbus’ five-year plan is the capability "to offer our customers a seamless solution globally to support customers in any warehouse around the world. With the framework we're building, we'll be able to do it much more seamlessly in five years."

In addition to the 3.5 million square feet Arrow has in 40 warehouses around the globe, the company provides supply-chain solutions at its customers' locations to support manufacturing operations. "We offer various production services, as well as distribution," Kolbus says. "The facilities are designed to support those services."

The advent of cloud-based computing allows Arrow to bring all of its business units to the table as it creates solutions for its clients. The company's suite of bundled services can include offerings such as hardware, billing, and digital marketing.

"Our business units will have to work very cohesively, but we have a solution and our customers are excited about what they see," Kolbus says. "It's putting Arrow in a fantastic situation. We've been doing digital business and e-commerce for years. It's just growing at a much faster pace."

Though it's slowed in recent years, one of the biggest contributors to Arrow's growth has been the business it conducts in China, he adds. "It may not be growing as fast as it was previously, but it's still a very strategic country for us. China has stretched my team to support that growth."

Kolbus says the Americas and Europe also have been good for Arrow's business. "Our logistics solutions over there are quite strong, and we continue to make investments there as well."

In 2011, Arrow relocated its headquarters from New York to Colorado, where it has found an abundance of talented people to recruit to its team. It's also partnered with local universities and provided internship opportunities to students.

"Being in Colorado is really helpful because people want to move here," Kolbus notes. "We're able to attract talented people to support what we're trying to do. It starts with the can-do attitude of employees. They relish in dealing with the complicated solutions."