Case Study Lucent Technologies

1112 Words5 Pages
Report for Lucent Technologies Background Lucent’s history goes back to the 1875 invention of the telephone by Alexander Graham Bell. It’s one of the three companies which were separated from AT&T’s restructure. Lucent was organized into four units, the largest of which was Network Systems. It provided networking systems and software to local and long distance telephone companies and cable companies. It was the marker leader for switching systems. The Switch Solutions Group(SSG), which made the 5ESS Switch, was part of the Network Systems organization. The 5ESS Switch Lucent’s flagship product was the 5ESS Switch. It was based on a modular design consisting by AM, CM, SM. Its modules consisted of several types of assemblies: printed…show more content…
The results of the change were dramatic. The factory was about three times as productive in 1998 as it had been in 1995. Product manufacturing through time decreased from over five weeks to one week. Margins improved by more than 10 percentage points and inventory days of sales fell by more than half. Support of Asian joint ventures and customers improved. These effects combined to make Lucent win the market share. Facing the Questions in 2000 Due to unprecedented growth in the cellular and Internet sectors, component demand far outstripped supply, and unprecedented material shortage developed. Leading edge procurement arrangements were sorely tested, and in some cases broke down. Lucent was vulnerable to this imbalance in supply. The problems could be broken down into five areas: 1. Sole-sourced component lead times more than doubled. 2. Inventories increased by about 25 percent, as assemblies could not be completed. 3. The Taiwan factory had to commit to early parts delivery to ensure availability 4. Product shipments to customers were jeopardized, and orders were at risk due to an inability to ship on time. 5. Premium prices were required in order to obtain expedited shipments of missing parts Solutions 1. Use contract manufacturers. Since contract manufacturers were started to get more involved in sophisticated telecommunications electronics and the labor cost there is much lower than in United
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