Supplies Overnight : Distribution

Executive Summary Daisytek International, Inc., is the largest wholesale distributor of non-paper consumable computer supplies and accessories in North America. This article focuses on the evolution of Daisytek’s distribution operations from a decentralized, ground-based system to a centralized, air-based system that features a strategic alliance with FedEx. Daisytek’s distribution strategy has resulted in significant improvements in order cycle times, fill rates and operating costs, providing Daisytek with a recognized competitive advantage in its industry. This article presents a “before and after” picture of Daisytek’s distribution operations and identifies key principles of cycle time reduction inherent in Daisytek’s distribution strategy. Introduction Incredible growth in the use of computers and related peripheral equipment has created a new industry—consumable computer supplies and accessories. The market for toner cartridges, magnetic media, impact printer supplies, and other essential consumable items found in today’s automated office is sizable and growing. Current estimates indicate the market for non-paper consumable computer supplies is approximately $15.5 billion per year in the United States and Canada. This industry is expected to grow to approximately $22 billion per year by the turn of the century. Currently, Daisytek International, Inc. is the largest wholesale distributor of non-paper consumable computer supplies and accessories in North America. Company History and Overview Originally established in 1977 as a manufacturer of printer “daisywheels,” the early years of Daisytek's existence were focused on being a supplier for daisywheels and a variety of other computer and software products. In 1982, British executive David Heap purchased the firm and developed alliances with major computer hardware manufacturers. Throughout the 1980s, the company’s business was split between hardware products and consumable computer supplies. By 1989, recognizing both the fierce competitiveness within the hardware industry and the seemingly untapped potential within the supplies market, Heap shifted Daisytek's focus exclusively to non-paper consumable computer supplies and accessories. Headquartered just north of Dallas in Plano, Texas, Daisytek is a wholesale distributor of over 6,000 nationally-branded non-paper consumable computer supplies and accessories. Companies such as Canon, Digital, Epson, Hewlett Packard, IBM, Kodak, 3M, Sony, and Xerox are among the Computer Supplies Overnight: Distribution Operations at Daisytek