Lucent Technologies

Lucent Technologies: Case Analysis Introduction: Lucent Technologies is a global communications equipment giant spun off as an independent entity in 1996 by AT&T. The case under consideration focuses on the supply chain redesign of the 5ESS digital switch for the Asiatic market. The 5ESS switch was an industry standard digital switching broadcast providing a whole range of communication services and a profit engine for Lucent. In the last decade of the 20th century, the strong growth of Asian economies coupled with the deregulation of the telecommunications celestial sphere led to an explosion in demand for telecom equipment in the region. However, Lucent was face with one major challenge to stamp down before it could take full advantage of the situation. Lucents dispute: The 5ESS switch was a highly complex device consisting of a large number of printed circuit boards, cables, power supplies and other mixed electro-mechanical components. Some of these assemblies could be manufactured from industry standard components opus others were Lucent proprietary. In addition, the switch itself was a highly customized, engineered-to-order product, and as a result only a limited standard of pre-fabrication was possible.

By the early 1990s Lucent had established four-spot Asian joint ventures (JV) in Taiwan, China, Indonesia and India. These JVs were primarily market intromission vehicles to gain a foothold in the markets and not seen as strategic partners that could be leveraged to help with the operations. Most of the manufacturing for the Asian orders go on to take place at Lucents Oklahoma metropolis plant in the US, where economies of scale could be achieved. The sub-assemblies were sold to the Asian JVs at a mark up, which did the final assembly and exam and sold the assembled switch to the customers. The profits from the final sale were shared between Lucent and the other JV partners. Lucent faced two major issues with this model: 1)High costs: The takings of... If you want to get a full essay, order it on our website: Ordercustompaper.com

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