Global Logistics and Supply Chain Strategies - August 2008 - (Page 12) Following Its Merger, Alcatel-Lucent Holds on to Kinaxis Software Editorial Director Jean V. Murphy A conversation with Arvind Ballakur, senior manager of supply chain and procurement at Alcatel-Lucent. In late 2006 Lucent Technologies merged with Alcatel to form a global leader in fixed, mobile and converged broadband networking, IP technologies, applications and services. The combined company, Paris-based Alcatel-Lucent, also has one of the largest research, technology and innovation organizations in the telecommunications industry. Operating in more than 130 countries, Alcatel-Lucent achieved 2007 revenue of Euro 17.8bn (about $28bn). Long a user of Kinaxis software, Lucent introduced Alcatel to Kinaxis technology, and it now is being used to help manage the combined company’s supply chain. there was a major change at the company in 2000. That was when Lucent began outsourcing a lot more of its manufacturing and when it decided to create a common supply chain organization that would be responsible for managing all manufacturing, logistics and procurement on a worldwide basis. I led the team that looked at how to consolidate systems across all the different product groups that had been operating independently. We used Kinaxis’s RapidResponse solution to model various options, especially factory locations for in-house and outsourced operations. So the journey from 2000 to 2003 was to model all of the facilities for the former Lucent and ensure that the company had global visibility to internal and external sites as well as robust “what if” MRP simulation capabilities. The point of this was to help decide which factories would manufacture what products and to make certain that the factory from which we were ordering had the capacity to deliver. When the company was divided into product groups, each group had MRP visibility into each of its own manufacturing sites, but we lost that visibility as we shifted manufacturing to EMS providers. So, initially, one of the key drivers for RapidResponse was to gain visibility. This was essential because we were trying to manage our contract manufacturers with very few Lucent people, yet we still needed the ability to respond to changes in plans and to manage by exception. Going forward we continued to build on that and even began modeling some of our distributors, such as Anixter. Eventually, by 2004 or 2005, we had users worldwide using this solution so we had daily snapshots coming in from both EMS locations as well as in-house plants, which gave us the true global visibility that we had been seeking. For example, say we had circuit packs that were being built at an EMS facility in Mexico for assembly into a final product at a Lucent plant in Massachusetts. If we received a demand change on that end item, we could see the Q: As someone who came to Alcatel-Lucent from the Lucent side, tell us about Lucent’s history with Kinaxis and how its solutions had been used. Ballakur: At the time of the merger, Lucent had been partnering with Kinaxis for eight to 10 years, starting back when it was known as WebPlan. We initially started with an implementation at one integrated facility, where we made components and assembled products all in the same building. At that point, we had different MRP [materials resource planning] systems for the different areas, one for components, one for equipment and so on. That created a problem when there was a change in demand for finished products. We had no way to quickly run a simulation to see what the impact of that change would be at the component level. So there was no way to quickly determine if we could accept a new demand plan. We needed a solution to address this problem so, at that point, we evaluated several offerings for solutions that offered ‘what if’ planning, and we ultimately went with WebPlan, now Kinaxis. Now at that time, Lucent was divided into separate product groups and the supply chains of these groups were managed pretty much independently. Each product group had manufacturing and logistics all within its own control. But 12 AUGUST 2008
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