Constraints caused by the Japanese earthquake have hit Xerox's
supply chain strategy, leaving the company with a reduced cashflow.
The company has lowered its operating cashflow for the year, with chief executive Ursula Burns blaming supply problems in Japan and new client accounts needing more upfront investment for the new forecast.
"We faced some unique challenges relative to cash usage during the first half of the year, including cash needs from ramping new contract signings and incremental cash required to support the supply chain constraints," Ms Burns said on a call with analysts.
While some companies have said the natural disaster in Japan has hit their supply chain, a recent report from Gartner suggested that the IT supply system has not been as badly impacted as expected.
It said spending on IT is likely to grow by 7.1 per cent, a significant rise on its first-quarter prediction, when it forecasted growth of 5.6 per cent.
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