Lenovo Special Supply Chain Management
By:Yinfan
Deng, Ruiqi Chen
Lenovo Group Ltd. is a Chinese multinational computer technology
company with headquarters in Beijing, China and Morrisville, North Carolina,
United States. ("Our
Company". About Lenovo.
Lenovo. Retrieved 30 April 2013.
"We have headquarters in Beijing, China and Morrisville, North Carolina,
U.S.") Lenovo, which was formerly known as ‘Legend’, was founded by Liu
Chuanzhi and a group of ten engineers in Beijing in 1984 and changed its name to
‘Lenovo’ in 2004. Today, Lenovo Group designs, develops, manufactures and sells
personal computers, tablet computers, smartphones, workstations, servers,
electronic storage devices, IT management software and smart televisions. It
has operations in more than 60 countries and sells its products in approximately
160 countries. In addition, it became the world’s largest personal computer
vendor in unit sales in 2013("Gartner Says Worldwide PC
Shipments Declined 6.9 Percent in Fourth Quarter of 2013".
Gartner.com. 2014-01-09. Retrieved
2014-02-03.)
One of the
unique aspects of Lenovo’s supply chain is their end-to-end business model.
Lenovo’s end-to-end business model leverages its vertical integration so that
is has greater control over both product development and supply chain operations.
This model is a significant source of competitive advantage and helps the company
bring more innovations to market, more efficiently, and aggressively attack the
PC+ opportunity. ‘PC+’, which was created by Lenovo Group, is that
people use PCs as well as a range of smart devices that are, at their heart,
PCs. ("Our Company". About Lenovo. Lenovo. Retrieved 30 April 2013.)
In support
of the corporate strategy, Lenovo’s global supply chain consistently drives
customer focused innovation and execution. (John Zapko, Inside
Lenovo Hybrid Supply Chain Strategy, 10) Lenovo
would like to continue to leverage the spirit of innovation and history of
technological breakthroughs into new product categories to drive future growth.
In addition, Lenovo has consistently delivered high quality, reliable and
durability products to the delight of their customers. Its products have won
many awards and frequently receive rave reviews. The ultimate goal of Lenovo is
to improve the overall customer experience while driving down the cost of
ownership (
Since June 2006, in
order to integrate Lenovo’s core values comprised of customer satisfaction,
innovation, operational excellence and trustworthiness into their supply chain,
the company became a member of the Electronic Industry Citizenship Coalition
(EICC). Following the EICC standards, Lenovo created a new supply chain
management style called a Hybrid Supply Chain Strategy. Using this new style,
Lenovo focused on achieving a balanced mix of in-house and outsourced
manufacturing. Also, Lenovo adopted four basic concepts to capture customer
value and grow profitability. First they strengthened the control and agility
in the end-to-end supply chain though investments in their in-house plants,
Secondly, they increased their responsiveness to their customers, so as to
deliver the industry’s best customer experience in all market segments.
Thirdly, they leveraged their suppliers to help with innovation and, finally,
they improved their flexibility, execution, and resiliency speed (John Zapko, “Inside
Lenovo’s Hybrid Supply Chain Strategy”, 12).
From 2010 to 2011, Lenovo experienced several
unprecedented natural disasters. March 2010, the Icelandic Volcanic ash
disrupted air supply routes in Europe; March 2011, the Japan Earthquake damaged
some electronics factories; October 2011, Thailand’s flooding disabled more
than 20% of the company’s hard drive suppliers (John Zapko, “Inside Lenovo’s
Hybrid Supply Chain Strategy”, 19). According to Lenovo president &
COO, Rory Read said in FOX Business that Lenovo first tier about micro process
did not affect, but the second and third tier of smaller controller components
was challenged. Fortunately, Rory Read claimed all of this emergency under
company control. Moreover, market competition is another big challenge for
Lenovo. Dell and HP are powerful competitors. Lenovo has a long-term strategy
that leverages its supply chain to fulfill its goals.
Additional Information
Lenovo: How & why world’s No. 2 computer marker
is building a brand worth its business
Lenovo Analysis
Video
Reference
John Zapko, Inside Lenovo Hybrid Supply Chain
Strategy
Lenovo’s Supply Chain Challenges
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