Motorola's Battle with Supply and Demand Chain Complexity
When complex supply and demand chain processes began squeezing the competitiveness from communications giant Motorola, the only way to gain back market share became very clear: search and destroy the complexity, and initiate a next-generation supply chain...
[From iSource Business, April/May 2003] Motorola, now entering its third year of battle with the complexity in its supply and demand chain, scored solid victories in 2002. Its Personal Communications Sector (PCS), responsible for 41 percent of the firm's $26.7 billion in annual sales, launched the lion's share of its supply and demand chain initiatives. PCS also reported the firm's highest operating earnings, helping propel the entire company into fourth-quarter profitability in 2002. Coincidence? Not a chance, say the folks responsible for PCS' supply and demand chain revolution. And with third-quarter 2002 global market share of approximately 15 percent, compared to mobile phone industry leader Nokia's whopping 36 percent, No. 2 Motorola hopes 2003 spells c-o-m-e-b-a-c-k. (Please see the sidebar titled "Cell Phone Industry Leaders.")
Founded in 1928, the Schaumburg, Ill.-based company claimed 50 percent of the global handset market during high-tech's heyday of the mid-1990s, then stumbled dramatically in the new millennium. In 2001, Motorola's market share slid to 17 percent, and sales fell to $30 billion, a 19 percent drop from 2000; chairman and CEO Christopher Galvin announced a $4 billion loss. Motorola also eliminated more than a third of its workforce in August 2000.
By year-end 2002, however, a leaner Motorola saw the fruits of its restructuring materialize. While it only recorded fourth-quarter sales of $7.5 billion
