Arrow Electronics and Seiko Instruments recently announced a partnership that makes Arrow an authorized distributor for Seiko’s line of receipt and ticket printers. The agreement is meant to bolster Arrow’s solution offering for kiosk designers.
 
From a distribution standpoint, Arrow carries a menu of kiosk components from leading manufacturers, such as displays, printers, power supplies and computing engines. Arrow OEM Computing Solutions (OCS) also provides kiosk vendors with an array of value-added services, addressing each of the phases required to bring a kiosk to market. The company says these outsourcing capabilities include design assistance and prototype development, integration and manufacturing, logistics, installation and post-sales support.
 
We sat down with George Papajohn, director of marketing for Arrow OCS, to discuss the need for outsourcing in the kiosk industry and to explore the potential impact these services can have on a kiosk vendor’s business.    
 
What outsourcing services are kiosk vendors asking for?
 
Kiosk designers’ requirements tend to be fairly broad in scope. Fundamentally, the need is for a reliable distributor with technical competency and strong manufacturer relationships. The distributor has to be able to recommend and deliver proven components that perform reliably in the field and don’t add integration complexity. The ability to offer the right financing programs is another imperative. Cash flow requirements cannot be overlooked. I would also say that scalability is a recurring theme.

For example, a smaller kiosk designer can develop a fantastic concept and prove it with a successful pilot program. And when it does go well, they might be faced with the enviable but perhaps daunting prospect of supporting a giant retailer. Not every kiosk designer can afford to maintain the capacity, logistics and support capabilities needed for a hiccup-free deployment on such a large scale. And we all know how difficult it can be when the end-customer introduces late design changes. The level of complexity and need for scale can spike fairly rapidly in this industry. With a robust outsourcing partner, the designer has a single supply source to rely on, and has access to integration facilities that can immediately scale to meet individual project needs.  

How does outsourcing impact a kiosk vendor’s business?

The right outsourcing partner can align themselves with a kiosk designer’s business and deliver a program that meets each project’s needs, in terms of components, value-added services and financing. It boils down to augmenting the designer’s internal capabilities on-demand, reducing overhead costs and eliminating headaches. This frees up the kiosk entrepreneur to focus on their true talents: product innovation and bringing in new business.

How do end-customers perceive a third party’s involvement in the project? 

I think the majority of customers are aware of the important contributions made by third parties in the supply chain. Distributors, contract manufacturers and logistics providers all play critical roles. A comprehensive outsourcing solution basically consolidates these elements. Some customers refer to this as having “one throat to choke” if an issue comes up. Regardless of the players involved, my perception is that customers want seamless execution, without unnecessary costs.   
 
Have outsourcing requirements been evolving?

With the recession, obviously most solutions providers have been feeling added pressure when it comes to cost and financing issues. Beyond that, there is no question that the breadth of self-service applications has continued to expand. This makes it even more important to align with the most capable suppliers, so that the right products are available to support these increasingly innovative solutions. 
 
How do you see this business in 2010?

The analyst reports we’ve looked at tend to predict growth for self-service in 2010. And there is no question that self-service technology provides a tangible bottom-line impact for end users. We anticipate this will certainly continue fueling new projects, and we are working hard to be able to anticipate and respond to customers’ continuing needs for value-added capabilities on a global scale