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Value challenges in supply chain management

W.K. Poon (W.K. Poon is Director of Supply Management & Group Planning, Asia Pacific Supply Management Operations, Mortorola Semiconductor Products Sector Hong Kong Ltd, Hong Kong.)
K.H. Lau (K.H. Lau is a Lecturer in the Department of Manufacturing Engineering, The Hong Kong Polytechnic University, Kowloon, Hong Kong.)

Logistics Information Management

ISSN: 0957-6053

Article publication date: 1 June 2000



In response to on‐going global business pressure, the supply chain management of Motorola Semiconductors Hong Kong Limited has imposed a “value challenge” programme to bring in excellence from outside suppliers to increase a purchase’s contribution. Through the changes of supply chain management philosophy together with additional participation of suppliers, the original practice of trimming profit margins at the supplier side to increase the value of a purchase has now been replaced by the collaborative effect to add value in its downstream supply chain activities. Based on such a value improvement initiative, a three‐layer value challenge practice has been developed. Through the use of such a technique, the company has been able to attain over 20 per cent unit cost reduction per pin count. This is equivalent to a US$30 million saving in over two years.



Poon, W.K. and Lau, K.H. (2000), "Value challenges in supply chain management", Logistics Information Management, Vol. 13 No. 3, pp. 150-155.




Copyright © 2000, MCB UP Limited

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