Essay About Global Supply Chain Management And Lucent Technologies

Lucent Technologies: Global Supply Chain Management
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Erica Del Gallego – Section 26Lucent Technologies: Global Supply Chain Management Key issue Current shortage of component parts brought about by the unprecedented growth of the electronics industry leads Lucent management to question changes already implemented in their supply chain, which had focused solely on cost and speed, ignoring the company’s vulnerability to imbalances in the supply of parts, which is now taking a toll on their ability to meet the needs of the evolving market and hindering their ability to take advantage of the new opportunities being offered.  Main factorsUnprecedented growth in the electronics industry leads to component parts supply shortage.Asian contractors did not invest in new capacityMain product, 5ESS has reached maturity in its product life cycle, and is being challenged by new, alternative technologies.RecommendationsReduce customization of their product to make it more “functional”, and employ mass customization.Contract with suppliers based on their level of flexibility, not on their ability to produce at low costs. Find low cost way to hold inventory buffers for critical/high shortage risk components.Reduce reliance on Asian contractors.Reduce number of contractors, perform activities locally to reduce lead times and increase flexibility and responsiveness.Employ accurate response forecasting.Key takeawaysAbroad, low-cost outsourcing is not always best – local production provides higher flexibility and responsiveness.  A supply chain must be constantly modified in order to meet demands of evolving market.Focus solely on cost reduction may leave other factors unattended which could result in negative outcomes.