AMD partners IBM to offer longer credit to master distributors

Mumbai: Aware that the recession is eating into the business of its channel partners, AMD India is working closely with them on ways and means to help them stay ahead of the downward curve. One way of doing it is to help them with better credit terms by tying up with the financial arm of IBM-IBM Global Financing.

As part of this AMD-IBM alliance, master distributors who avail of the Global Supply Chain Finance program can get 60 days credit rather than the 30 days credit that is extended to them direct by AMD. “We ensure our master distributors get longer credit periods which they can then use to rotate their working capital twice over in the channel, keeping the entire market in good fiscal health,” said Sandip Naik, Head-Sales, AMD India. He added that talks are on with Ingram Micro India and Rashi Peripherals, who may soon join the list of master distributors.

But when asked whether the credit flow-through evolvement is happening from the distributors to the solution providers, Ramkumar Subramanian, VP-Sales and Marketing, India and SAARC, AMD explained, “We are like the finance minister of the country. He will give financial support to only the top-ticket institutions because it is expected that their positive effects will percolate down the line. Similarly we are ensuring that our master distributors get our support to maintain their fiscal well being. It is then up to them to take it further down the chain.”

Besides this, AMD intends to use its Connect Channel outreach program which it had initiated six months back to interface with partners in C-class cities to educate them on business strategies to keep posting growth. “Initially the program was meant to touch 36 cities in India. But we feel that there is a need to have continuous interaction with partners to help them stay financially viable and enthuse them to buy our products,” said Naik.

At these events the company is educating partners to adopt the rotational stocking method. This means that rather than stocking supplies for a fortnight or a month, partners are advised to stock it for just a few days. This will ensure that their working capital is not blocked and they can do their daily transactions easily.

But won't this model fail if vendors like AMD have not made arrangements for sufficient stocks in their local warehouses? “We have ensured that our local distributors are carrying enough inventory, so there won't be any shortage of goods,” clarified Naik at the same time stating that the company's master distributors too have been told not to over-stock inventory but to plan it judiciously. In short, it is encouraging just-in-time purchases by the channel.