Lucent technology supply chain summary Essay Example for Free

aglow(predicate) engineering turn in chain summary EssayLucent Technologies is a international telecommunication company which was spun take from ATT in 1996. forrader restructure, as an integrated telecommunications services and equipment company, ATT had been primarily U. S. -centric market and more than half of income was generated by services in U. S. However, the restructure made Lucent focused on communications equipment globally. When Lucent amplify into global market, its flagship product, the5ESS digital switch, was a market leader in worldwide telecommunication infrastructure equipment. spot the 5ESS digital switch provided the companys more competitive edge in global market. This fashion configured, engineered-to-order product made sole(prenominal) a portion of its assemblies could be built to stock. Moreover, 5ESS digital switch orders from Asian market had continued to grow rapidly, and Asia became an important part of Lucents business. U. S. -centric Suppl y Model Before Lucents independence from ATT, it established some articulate ventures in four Asian countries to collaborate the increasing telecommunication equipment demand in Asian market.But this marketing entry mode dear provided access to these markets. Most manufacturing continued to be done in Oklahoma City. The Asian joint ventures only performed final assembly and testing. It was believed that Lucent would benefit from the cost saving from economies of scale in manufacturing in US. However, as tremendous demand growth and intense competition arose from these countries, the delivery costs and lead time became two critical issues in this application. The long distance inhibited the instant response.Delay center market losing. Whats more, increasing local content by having locally purchased parts would lower the costs and made product more locally attractive. Asian-centric Supply Model After 1996, asset management, product lead time and write out chain efficiency beca me more and more important for this immature independent manufacturing firm. The primary market shifted from U. S to Asian market required a redesign of the Asian leave chain. First of all, it took a hub-and wheel spoke model. chinaware was the hub of the Asian supply chain.Custom engineering and manufacturing of Asian orders would be manufactured in Taiwan rather than Oklahoma City, and Asian orders were placed with Taiwan rather than U. S. Low volume assemblies remained in U. S. Secondly, contrastive supply modes (inshore or outsource) were decided by different product volumes. And then it used local components (direct procurement) and local suppliers (local procurement). Last but not least, it insisted a strict quality control. Products manufactured by Asian joint ventures had the same quality standards.There were also some barriers for the redesign of supply chain. For example, the raw manufacturing center in Asian mean losing job in U. S. The transfer of production to joi nt venture may trend Lucents profits. And also the sales organization worried about the sales decreased because of losing make in USA label. All of these barriers were addressed when the benefits of redesigning outweighed the costs. The redesign decreased the lead time, and customer satisfactions had improved a lot. Meanwhile, Taiwan joint venture reengineered its factory to improve the productivity.The increasing productivity and decreasing costs means the firm became more profitable. Also, support of Asian joint ventures helped Lucent win more business in Asia, and the huge capacity of Asian joint ventures can support Lucent global customer demand. So the all improvement by redesigning the supply chain made Lucent more competitive in global market. Summary and Recommendations Despite its success in the later 1990s, new challenges have arisen. How to response the ever-changing demand in this complex business environment and how to expand its capacity in other acclivitous markets? The internet and IT tools caused fundamental changes in business models and traditional customer-supplier relationships. Contract manufacturing company in Asian provides new opportunity for the firm to outsourcing its manufacturing and logistics responsibility. In my view, outsourcing its assembly and component is a better way for Lucent to fight with new challenge. Because 5ESS digital switch was reaching its mature period in the product life cycle, and the intense competition and changing environment forced telecommunication industry to devoted more time to new product research and marketing strategy.In its initial stage, the core product is the key to success and the supply chain redesign facilitate its further success. But nowadays, the product life cycle is shortening and the industry is changing at ever-increasing rate. Lucent has to improve researching, marketing strategy and supply chain management at the same rate to cope with the changing market. In addition, Lucent can use merging and attainment strategy to integrate available resources to expand its business. Questions for group As Lucent shift its main supply chain from U.S to Asian market, how to compete with domestic rivalry cisco? As more and more local telecommunication company grew up, how to cope with fierce industry competition with local firms, and some multinational telecommunication firms now target at Asian market, how to compete with them in global market? Should Lucent insist its in-source strategy or use outsourcing for the future supply chain management? Because its flagship products had reached its mature period, is it undeniable for Lucent to build a main RD center in the emerging market like Cisco did?