Value challenges in supply chain management

Abstract

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the original practice of trimming profit margins at the supplier side to increase the value of a purchase has now been replaced by the collaborative effect to add value in its downstream supply chain activities.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.

Citation

Poon, W.K. and Lau, K.H. (2000), "Value challenges in supply chain management", Logistics Information Management, Vol. 13 No. 3, pp. 150-155. https://doi.org/10.1108/09576050010326547