Lucent technology supply chain summary Essay

luminous Technologies is a multinational telecommunication social club which was spun off from AT&T in 1996. Before restructure, as an co-ordinated telecommunications services and equipment company, AT&T had been primarily U. S. -centric commercialize and to a greater extent than half of income was gene markd by services in U. S. However, the restructure made Lucent pore on communications equipment globally. When Lucent expand into global market, its flagship product, the5ESS digital swop, was a market leader in worldwide telecommunication infrastructure equipment. go the 5ESS digital switch provided the companys more competitive spring in global market. This custom configured, engineered-to-order product made only a portion of its assemblies could be built to stock. Moreover, 5ESS digital switch orders from Asiatic market had continued to grow rapidly, and Asia became an important part of Lucents business. U. S. -centric preparation set Before Lucents independence from A T&T, it launch some joint take chancess in four Asiatic countries to meet the increase telecommunication equipment demand in Asian market.But this selling admission mode just provided access to these markets. Most manufacturing continued to be through with(p) in Oklahoma City. The Asian joint ventures only performed final manufacture 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 contender arose from these countries, the auction pitch costs and lead time became two critical issues in this industry. The farseeing distance inhibited the instant response.Delay means market losing. Whats more, increase topical anesthetic content by having locally purchased parts would dishonor the costs and made product more locally attractive. Asian-centric Supply Model After 1996, asset forethought, product lead time and interpret filament efficiency became more and more important for this new independent manufacturing firm. The original market shifted from U. S to Asian market required a design of the Asian supply string. First of all, it took a hub-and spoke model. Taiwan was the hub of the Asian supply chain.Custom engineering and manufacturing of Asian orders would be fabricate in Taiwan quite than Oklahoma City, and Asian orders were placed with Taiwan rather than U. S. Low volume assemblies remained in U. S. Secondly, different supply modes (inshore or outsource) were refractory by different product volumes. And then it used local components (direct procurement) and local suppliers (local procurement). Last but not least, it sweared a strict quality control. Products manufactured by Asian joint ventures had the same quality standards.There were in any case some barriers for the redesign of supply chain. For example, the new manufacturing center in Asian mean losing job in U. S. The transfer of production to joint venture may r educe Lucents profits. And also the sales institution worried about the sales decreased because of losing Made in ground forces 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 amend 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, throw 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 yield arisen. How to response the changing demand in this complex business environment and how to expand its capacity in other e coming together markets?The i nternet and IT tools caused thorough 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 cope with new challenge. Because 5ESS digital switch was reaching its mature period in the product life circle, and the intense competition and changing environment forced telecommunication industry to attached 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 m erging and acquisition 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 lake herring? 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 necessary for Lucent to build a main R&D center in the emerging market like Cisco did?