Siltek re-aligns its Volume Distribution to boost local PC brands

Siltek announced today that the group has re-aligned their Volume Distribution product portfolios to take advantage of synergies which exist between Siltek Distribution Dynamics (SDD); One Technology Group (OTG); Memtek/MMW; and Workgroup.

"As a result of the mergers over the last two years, we found it necessary to sharpen the focus of the portfolio of products within each of the distribution companies," states Siltek CEO, Dave Lello.

In future, SDD and OTG will join forces to leverage Siltek's position in the local PC brand technology supply chain.

The local PC brands division within SDD/OTG will focus on marketing and branding Siltek's brands namely, Vision; Xylo; Laptech and Fujitech. The marketing, R&D and assembly functions will be centralised and enhanced.

The combined SDD/OTG, will now be focussed into four main divisions being international brands; local PC brands; software; and consumables.

Adds Lello, "This step was deemed necessary as local brands continue to dominate the South African PC market. According to BMI TechKnowledge Group, local brands constitute 65% of units shipped in South Africa, and our intention is to increase our market share in this important market."

To take advantage of volume discounts from vendors and savings gained from the consolidation of shipments, procurement of all components, including those used in the local PC brands, will be centralised within Memtek/MMW.

Five additional agencies of leading brand components will be transferred from Workgroup and OTG to Memtek/MMW in order to give these better focus.

SDD/OTG's software division will continue as a volume distributor focusing on Microsoft, IBM/Lotus, Symantec Borland and Pastel. Workgroup remains the specialist software solution company within the Siltek technology supply chain.

Siltek intends creating common customer service centres for its resellers for emergency supplies; collections; and warranties and repairs. The current centres in the major cities will be merged and Siltek intends to roll out customer service centres in five other selected towns around the country.

According to Lello, the repositioning of Siltek's local brands and service centres will provide the backbone to a common interface to Siltek's large range of leading IT products.

This backbone is a precursor to Siltek's e-commerce experience whereby Siltek's customers will have one contact point at each centre and a single collection point for all products and services after ordering on-line.

"The refocusing of these products will bring about additional back-office efficiencies and we expect substantial savings to emanate from the consolidation within SDD/OTG. Our expectations are that the consolidation will result in an estimated annual saving in excess of R20 million on an annualised basis," states Lello.

"Siltek is optimising its business to meet the challenges of e-commerce. This consolidation is a further step in achieving our Siltek.com strategy as outlined in our year-end annual report," concludes Lello.