Strategic Supplier Event
EMS Transition
Stephen A. Sherman
Vice President
Manufacturing Strategy &
EMS General Management
Lucent Technologies
Manufacturing Strategy
& EMS General Management
Organizational Structure
Steve Sherman
Manufacturing Strategy &
EMS General Management Vice President
Celestica GM Solectron GM Jabil GM
Fu Timblin Diffley Lofton DEALS
Herzberg Dickenson Dulin
EMS General Process &
Strategy Deals
Management Systems
Where Are We Going?
You Are Here
Mfg. EMS Perf. Competitive
Transformation “Process” Advantage
“Drumbeat” “Optimization”
Our Model - % Outsourcing
100%
0%
1999 2000 2001 2002 2003
Lucent – EMS – Component
Suppliers Business Model
100%
0%
EMS vs. LU EMS vs. LU EMS vs. LU
Procurement Managed ($) Managed
(# of Parts)
EMS LU
Key EMS Portfolio Update
Lead EMS Providers
• Celestica
• Solectron
• Jabil
• Other Competitive Tension Players
• Enclosures / System Integration
LU-EMS Business Model
SCN Customer Facing
(Lynn Mercer)
SCN Operations
(Mike Jones)
SCN EMS General Mgmt
(Steve Sherman)
EMS
SCN Repair/Logistics Worldwide
SCN EMS
(Jim Johnson) Operations
General Mgmt
SCN Eng & Lifecycle
(Steve Sherman) and
(D. Ayers/Mary Godwin) Functional
Groups
SCN SC Plng & Cost
(D. Ayers/Rob Piconi)
SCN Supplier Mgmt
(D. Ayers/Joe Carson)
SCN CFO
(D. Hitchcock)
Network Complexity of
Multiple EMS Locations
EMS
SCN Customer Facing Partners
(Lynn Mercer)
SCN Operations
(Mike Jones)
SCN EMS General Mgmt
(Steve Sherman)
SCN Repair/Logistics
(Jim Johnson) SCN EMS
General
SCN Eng & Lifecycle Mgmt
(D. Ayers/Mary Godwin) (S. Sherman)
SCN SC Plng & Cost
(D. Ayers/Rob Piconi)
SCN Supplier Mgmt
(D. Ayers/Joe Carson)
SCN CFO
(D. Hitchcock)
Network Complexity of Multiple
SCN contacts within Function
SCN Customer Facing
EMS
(Lynn Mercer) Partners
SCN Operations
(Mike Jones)
SCN EMS General Mgmt
(Steve Sherman)
SCN Repair/Logistics
(Jim Johnson)
SCN EMS
SCN Eng & Lifecycle General
(D. Ayers/Mary Godwin) Mgmt
(S. Sherman)
SCN SC Plng & Cost
(D. Ayers/Rob Piconi)
SCN Supplier Mgmt
(D. Ayers/Joe Carson)
SCN CFO
(D. Hitchcock)
Network Complexity of Multiple Product
Unit GM teams to Multiple SCN Contacts
Product EMS
Teams SCN Customer Facing Partners
(Lynn Mercer)
SCN Operations
(Mike Jones)
SCN EMS General Mgmt
(Steve Sherman)
SCN Repair/Logistics
(Jim Johnson)
SCN EMS
SCN Eng & Lifecycle General
(D. Ayers/Mary Godwin) Mgmt
(S. Sherman)
SCN SC Plng & Cost
(D. Ayers/Rob Piconi)
SCN Supplier Mgmt
(D. Ayers/Joe Carson)
SCN CFO
(D. Hitchcock)
Compounded Complexity as
Strategic Suppliers are Added to Network Map
Product EMS Strategic
Teams SCN Customer Facing Partners Suppliers
(Lynn Mercer)
Our Challenge:
SCN Operations
(Mike Jones)
• Leveraging inherent strengths of broadband
for General Mgmt
networkSCN(Stevesuperior performance
EMS
Sherman)
SCN Repair/Logistics
bone
• Build “hard-wired” back SCN EMS (relationships,
(Jim Johnson)
General
communication channels,Mgmt
SCN Eng & Lifecycle
(D. Ayers/Mary Godwin) contracts, etc.) for
(S. Sherman)
urgent point to point problem resolution
SCN SC Plng & Cost
• Simplify network, particularly
(D. Ayers/Rob Piconi)
SCN the curtain”
“in front of Supplier Mgmt
(D. Ayers/Joe Carson)
SCN CFO
(D. Hitchcock)
Challenges and What’s Next
• Forecast Accuracy vs. Agile Supply Chain
• Cost, Cost, Cost
• International Deals Finalization
• Merrimack Valley Integration
• Process and Infrastructure
Optimization
• Strategy
(Direct fulfillment evolution) EMS
• Low Cost Region
Optimization