3. Growth of Lucent Technologies After becoming independent in 1996, operated in more than 90 countries. Network Systems unit generated 57% of revenue. Market leader in US for switching systems. Flagship product was 5ESS® Switch.
4. Large-scale, software based digital switching platform. This switch was custom configured (unlimited configurations possible). Engineered-to-order product. 5ESS® Switch
6. Scenario Before 1996 Redesign Asian customers away from order processing and manufacturing activities. Parts produced in Asia shipped to US long lead times & high costs.
11. 5ESS® Switch efficient for voice networks. Current demand was for data networks Product life cycle was shortening, and telecommunication technology was progressing at an ever increasing rate Contract manufacturers got involved in telecommunication electronics 5ESS® switch reaching mature part of its product life cycle Other Factors
12. Was the hub and spoke process, despite its success, the right model for this evolving environment? How could they take advantage of the maturing resources within and outside lucent? What could Lucent do to mitigate exposure to material shortages without increasing inventory? Was today’s leading edge procurement effective for future environments? Questions
13. Should they continue to drive internal breakthrough improvements or should they harvest their previous supply chain investments and direct their attention towards outsourcing for their future needs? Questions... Contd.
