Lucent Technologies: Global Supply Chain Management
...efficiency became extremely important. Perhaps even a more important change was the need for a quick response time. Another factor was the development of a supply base in Asia. These factors led to necessary changes that also produced benefits to Lucent. They were able to learn more about what was contributing to their manufacturing costs and reduce the overall cost. Speed of delivering products to customers was also greatly increased. The biggest challenge to Lucent is material shortages. In an industry where turnaround time is critical, this could be the death of a company if it is unable to produce its products in a reasonable time because of lack of materials. Lucent had also begun using the Asian locations to supply other regional areas of the company. New information technology (such as the internet) was leading to greater expectations from a customer-supplier relationship. The telecommunications technology was also rapidly changing. It was becoming more and more important that Lucent be able to respond to changing demand by implementing a quicker rotation of products with shortened life cycles. It is important that Lucent respond to these challenges. The company must find a way to mitigate these risks. It is going to have to begin switching from regional divisions to a more global company. Lucent will need to focus more on the R&D necessary to keep up with the changing industry. The hub-and-spoke strategy allows a company to keep costs very low. It also allows different regions or plants to become very specialized. However, once the company begins expan...