In your planet, Maurice, is the sky blue? And does the 4Q also account for 40% of annual sales? Get real, will you? Making grandiose claims about ownership of the CDMA air-interface (CDMA2000 and WCDMA) only works with the most gullible of investors nowadays.
Shortage puts a strain on shaving AVLs
Electronic Buyers' News
(05/30/00, 10:23:08 AM EST)
We've received lots of attention over last week's page 1 story, "Desperate measures: Parts shortage prompts creative moves by OEMs."
The story outlined the brutal sourcing environment in which OEM procurement managers must operate. So brutal, in fact, that one OEM is plucking flash-memory chips out of its employees' Palm Pilots so it can meet its own production requirements. And a global telecom company is asking one contract electronics manufacturer to ante up components for a chief rival. In the 10 years that I've been covering this market, I've never seen such creative (and cutthroat) sourcing practices.
Then again, I also haven't witnessed such a breadth of components going on allocation. Back in 1995, DRAMs and certain microprocessors were all the rage, and brokers made a bundle. But today, with the mobile-phone boom putting a strain on everything from flash memory to LCD-driver ICs, OEMs across many different end-market segments are feeling the pain.
Interestingly, OEMs and CEMs are continuing to reduce their approved-vendor lists in an effort to build more efficient supply chains. As EBN's Claire Serant reports in this week's issue, CEM heavyweight Flextronics International is looking to drastically reduce its AVL, and some of its competitors are in the midst of similar strategies.
You can bet, though, that suppliers of critical components won't be touched anytime soon.
The parts shortage has also created opportunities for the new breed of dot-com distributors, aggregators, and sourcing services. Purchasers and engineers are increasingly using the Internet to find parts, and especially those in short supply. The use of auctions for surplus parts is also up.
But as one reader pointed out to me, this new sourcing avenue may conflict with ongoing AVL-reduction efforts. ?The subject of increased use of online auctions in b2b really requires that companies consider increasing their AVL (or reach to additional suppliers) to fully benefit from the competitive nature of an auction,? the reader wrote. ?Perhaps this is only valid of standard commodity products and services, but nevertheless may reverse the trend? of vendor reduction.
That's an issue many OEMs will have to deal with as they become more comfortable in an Internet-sourcing environment. But first, they've got to worry about meeting short- and long-term manufacturing requirements. Good luck.
E-mail me with comments and suggestions at msheerin@cmp.com.
ebnews.com
Note: Motorola is looking to pare its AVL (approved vendors' list) which is currently at 25, including the $30 billion over 5 year-deal with Flextronics representing about 15% of its global revenues. |
