Presenters:

Khalid AtiqMuhammad QaiserRaheel Ahmed Siddiqui

A Case Study of A Case Study of

Lucent Technologies CompanyLucent Technologies Company

AGENDACompany OverviewCurrent Integration IssuesCurrent Supply Chain processLucent’s Strength and WeaknessesWhat Lucent Want to Achieve3 Possible upgrades to solve the issueAdvantages and Disadvantages of these

upgrades

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Introduction LUCENT TECHNOLOGIES

Designs and delivers networks for communication service providers

High bandwidth, core optical and multi-service data networks

More than half of the worlds phone calls are made over lucent remote access equipment (30 million call per day)

Employs 30,200 people worldwide

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Intro….Revenue of US$9.4 billion in the year 2005

Major Markets includes North America, China, Japan and Europe

Headquarters in New Jersey, USA

Research and development is Supported by Bell Laboratories

Partners include Accenture, Hewlett-Packard, IBM and Microsoft.

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Lucent’s Supply Chain Lucent has close relationships with suppliers to provide the materials and

services at affordable price

Relationship with suppliers is the key strategy for success

Being a Lucent supplier is much more than being a reliable source for quality material and services at competitive price.

In January 2001, Supply Chain Network (SCN) was formed to knit all supply chain functions through lucent into a single organisation

One of the significant outcome of SCN is the Supplier relationship program

The goal of the program is to bring Lucent and its suppliers closer for mutual benefits

Currently Lucent ERP system maintains all logistics information

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Lucent Supply Chain Diagram

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FF

Support: Sales & Marketing, Finance, Corporate Social Responsibility

Plant 1

Plant 2

Plant 3

3PL

Contract Manufacturer

DC

DC

Distributor

3PL

FF

Suppliers Customers

(3PL=third Party Logistics Provider; FF=Freight Forwarder; DC=Distribution Center)

Lucent’s StrengthsBell Laboratories the major investment partner in the

research and development of communication equipment

Restructured its global supply chain network by launching Lucent Worldwide services

20,000 professionals to provide network designed engineering, installing, managing, monitoring and repairing most sophisticated networks.

Focuses on world leading wire line service providers, including long distance carriers, local service providers, public telecommunication providers, emerging service providers and backbone builders

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Lucent’s weaknessesLack of global communication and transport system

Problem in resolving reverse logistics

Current system developed by Citadel requires different districts to be served by different logistic systems

Comparatively Longer delivery time (6 Weeks)

Don’t have well integrated system

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Current Integration IssuesCommunication System is relatively weak

Difficult to link data between regions of the world

Each region uses different software for its logistics

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Lucent’s Choices

Vice President of Lucent Supply Chain network gave 3 options to resolve their crisis

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Three possible Upgrades to solve integration issues

Customers, suppliers dispersed geographically

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Electronic Data Interchange SolutionDirect transfer of data between lucent,

customers, suppliers and other partnersPurchase orders, invoices converted

into standard messages as required by the interface

Transmission of data is very quickThe protocol among communication

devices has to be sameWe have to use direct link or third-

party network

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Usage of EDICustomers use EDI to transmit orders and

other information to lucent regional logistics info centers that linked to lucent ERP system.

Purchase orders are transmitted directly and accurately from ERP system to vendor

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Diagram-EDI

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Solution-II, XML BasedExtensible markup language, structure is similar to HTML

Customers placed orders on website

Lucent ERP can have interface to receive XML input.

Purchase or delivery orders can be transfer to suppliers in

XML format

XML and internet replace the use of EDI

This is a carefully-formatted string which is often found at

the very beginning of XML documents. Here is an example:

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B2B Portal SolutionPortal means gateway/entrance

Technically speaking: A website considered as an entry point to other websites, often

by being or providing access to a search engine.

A web portal presents information from diverse sources in a unified way.

Apart from the standard search engine feature, web portals offer other services such as e-mail, news, stock prices, information, and entertainment. Portals provide a way for enterprises to provide a consistent look and feel with access control and procedures for multiple applications, which otherwise would have been different entities altogether. Examples of a web portal are MSN, Yahoo!, AOL and iGoogle.

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Schematic

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How it can work in LucentThey have to build business to business portal,

lucent.netIt will use internet an e-commerce technologyLucent requires two portals

Business portal Links manufacturers, assemblers and logistics partners Every partner will have real-time information Internal ERP data can be open up to suppliers etc with

same access rights as their employees.

Customer portal Market place- online product catalogue for customers and

suppliers Online tracking Customer support

EDIAdvantagesQuick Access to informationReduced PaperworkBetter communicationIncreased ProductivityImproved Tracing,Expending,Accuracy and

Billing

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EDIDrawbacks

Expensive to ImplementDifficult to adoptLack of standardization

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XMLAdvantages

Has all benefits of EDICheaper (requires free web broswer,500$

computer and $15/ m for internet)Compatible with ERP SystemsEmail-like document Flexibility

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XMLDisadvantages

No single Standard Security ConcernsYet to prove in large –scale environment

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B2BCustomer Portal

Automate order processing onlineCost SavingTrackingFeedback

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B2BBusiness Portal

Real Time Data access (forecasting, inventory and purchase orders)

Consolidated Access Points

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B2BWeaknesses

Co-operative environment essential (if one link fails, the entire chain will become non-operational)

Lack of e-skillsUnsupportive company culture

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Conclusionuse of e-commerce

Alternative, redesign lucent supply chain e.g. selling or less profitable units

which option will assist strategically!

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Q & A

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