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Solectron Signs Multi-Year Contract With IBM for Procurement Business Transformation Services

IBM to Manage $1.2 Billion per Year of Indirect Procurement Spend Across 17 Countries

NEW YORK, NY - 22 Mar 2006: IBM today announced that it has signed a long-term contract with Solectron Corporation (NYSE: SLR), a leading provider of electronics manufacturing and integrated supply chain services, for indirect procurement services across 17 countries. Solectron is expected to realize significant savings throughout the life of the contract by leveraging IBM's global economies of scale and by optimizing core procurement processes. The value of the contract is not being disclosed.

IBM will manage more than $1.2 billion per year of indirect spend in areas such as temporary contract services, office equipment, utilities, and telecommunications. Core to the project is the implementation of IBM's complete Procure-To-Pay procurement solution that will be integrated with Solectron's internal systems and controls. IBM's solution will enable web-based requisitioning as well as efficient procurement and supplier payment.

"The savings we expect from this contract with IBM will contribute to both operational and process innovation and simplification, which improves services to our customers and suppliers," says Perry Mulligan, chief procurement officer, Solectron. "IBM's world-class expertise and experience in sourcing and procurement as well as its ability to serve us globally were keys in the development of our indirect procurement strategy."

Solectron worked closely with IBM to customize the service offerings into a single, holistic procurement solution. This approach combines Solectron's strategy with IBM's leading-edge procurement practices. Elements of the overall procurement solution include IBM commodity experts, a global contact center and an accounts payable processing center supporting Solectron suppliers and employees around the globe. Solectron will also have access to a full range of transformation and maintenance services from IBM.

"IBM's ability to share its internal procurement expertise with clients is an incredibly unique value proposition," says John Paterson, chief procurement officer, IBM Integrated Supply Chain. "Organizations both large and small can benefit from procurement outsourcing which can deliver both short and long-term economic benefits."

Business Transformation Outsourcing (BTO) transforms client organizations and delivers enterprise optimization through innovative business and technology approaches. Using its global network of expertise, industry-leading consulting methodologies, research and engineering capabilities, advanced technologies and analytical tools, IBM's BTO services standardize, streamline and improve business processes. IBM BTO services transform key business functions including Finance and Accounting, Customer Relationship Management, Supply Chain, Procurement and Human Resources. IBM provides BTO services to many of the world's leading organizations, and over the last four years has made a number of strategic acquisitions and investments to expand and strengthen its capabilities, including the acquisitions of PwC Consulting, Daksh eServices, Liberty Insurance Services Corp., Maersk Data, Key MRO, Equitant, Healthlink and Viacore, Inc.

The hosted Procure-To-Pay environment and business operation will go live in the autumn of 2006 in North America and will then be fully deployed globally by early spring 2007.

Contact(s) information

Chris Sciacca
IBM Media Relations
(212) 745-4732
csciacca@us.ibm.com

Corey Olfert
Solectron
(408) 956-7552
coreyolfert@ca.slr.com

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