Stories by Pat Atkinson

Tooling Up for SCM

What do Cisco Systems Inc., Dell Computer Corp., EMC Corp., Hewlett-Packard Co., IBM Corp., ICL, Sequent Computer Systems Inc. and Sun Microsystems Inc. have in common? They're all industry giants that outsource all or part of their manufacturing processes. In fact, some of them have never even owned a factory. In a market place where product life cycles span a mere six to nine months, some original equipment manufacturers (OEMs) prefer to focus on their core businesses -- typically front-end design and marketing -- and outsource their back-end factory operations to gain a competitive advantage. Approximately 15 per cent of the world's US$500-billion electronics manufacturing services (EMS) market is already working this way and experts predict that by 2001, the $90-billion EMS sector will nearly double. In the race for end-user customers, organizations that can deliver their products to market globally in volume ahead of the competition are positioned for success, which is why some are forming partnerships with EMS companies. Incredibly, more than 50 OEMs -- including every one of the industry leaders mentioned above -- are dealing with the same EMS partner, Celestica. Established in 1917 as the manufacturing arm of IBM Canada Ltd., Celestica was incorporated as a wholly owned subsidiary in 1994. In October 1996, it was purchased by a group of investors led by Onex Corporation and subsequently became a public company in 1998. Today, its nearly five million square feet of manufacturing space is the launch pad for a broad range of products, including workstations, mainframe computers, terminals, personal computers, servers, routers and set-top boxes. The company supplies customers with a broad range of integrated EMS, ranging from printed circuit assembly and system build, to memory and power solutions. Add to that some very compelling value-added services such as quick-to-market supply chain management, global component-purchasing power, and industry-leading design and prototyping capabilities and it becomes fairly obvious why Celestica is thriving. The fastest growing of the three largest EMS providers -- ahead of SCI and Solectron -- Celestica's annualized revenues for 1999 were US$5.4 billion. So, if major OEMs are principally dealing with the same suppliers, how then are innovation and product distinction derived? "Although we're involved in the design, the fundamental new product idea still rests with the OEM," explains Lisa Colnett, Senior Vice-President Worldwide Process Management, and Chief Information Officer for Celestica. Colnett is responsible for key corporate functions including IT, manufacturing and human resources and was formerly in charge of the company's Memory Division. She joined IBM Canada in 1981 and, over the course of her career, has had experience in materials logistics, cost engineering, site logistics and manufacturing management. Colnett says that increasingly OEMs are bringing their designs and product specifications to Celestica to be translated into products. "The innovation that we bring to the table is how to make them more manufacturable and get them through our processes more quickly."

Enterprise: Marriages of Convenience

One of the hot buzz phrases in business today is strategic alliance. Everybody's building them in the hope of developing exciting new product offerings, opening doors to untapped markets and ensuring enterprise continuity. Former competitors are suddenly potential partners and old lines of demarcation between clients and vendors are becoming obscured. Yet, few alliances are truly strategic and long-term joint ventures between equal partners are as rare as hen's teeth. "Getting hitched" in business seems to have the same iffy batting average as marriage itself.

Building Better Vendor Partnerships

Imagine doing business with suppliers who thoroughly understand your organization, can be trusted to make deals on a handshake and provide outstanding price-performance. Sound too good to be true? You're looking at the next phase in the evolution of vendor-client relationships: true partnerships. The right vendor can help a client stay ahead of the competition, enable rapid product development and ensure the delivery of best-in-class products and services at affordable rates. This article looks at two interesting examples: Nesbitt Burns and The Bank of Montreal.

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