Compaq Streamlines Distribution Logististics

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Compaq Computer Corp., Houston, yesterday announced a plan to streamline the distribution system for its standard model business-class products that it said would reduce its inventory, speed the delivery process and give it the ability to react to individual customers more like its direct-marketing rival, Dell Computer Corp., Round Rock, TX.


Under the terms of the North American Distributor Alliance Program, Compaq will use four major distributors - Ingram Micro, Merisel, Tech Data Corp. and Inacom - all of which will co-locate some of their operations at Compaq's Houston headquarters. The distributors will complete the customization of Compaq products as they leave the assembly line and then either ship the products directly to end users or to resellers. Compaq has been using a similar distribution model for its largest business customers through distribution partner Compucom.


Previously, Compaq had used about 40 different distributors in an arrangement that analysts have said was too complicated and time-consuming.


Compaq's reseller channel partners will continue to market Compaq products and provide service to its customers. Compaq also will continue to market some products directly to end users.


Compaq said it expected the new arrangement to generate faster delivery times and additional configuration choices.


The company said its distribution logistics would remain the same for many of its products, including its consumer line, its configured-to-order products, its high-performance enterprise servers and storage systems and its government and education products.


Separately, Compaq signed an agreement for Sitel Corp. Baltimore, to provide phone-based customer relationship management services in Brazil.
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