Building an ecosystem-wide strategy for supply chain resilience

Supply chain resilience — the ability to adjust to dramatic changes in the global logistics landscape — has emerged as a critical success factor in network service providers’ ability to address the expectations of connected home subscribers. Indeed, if anything, the pandemic put more pressure on NSPs to deliver more value and innovation to their customers as major segments of the hemispheric population were sent home to work, play and educate their children.

To learn more about how new supply chain management strategies are optimizing the delivery of customer premises equipment through a complex global landscape, we sat down with Eric Rutter, President of Americas for Technicolor Connected Home.

Q: How have the events of the last few years affected the supply chain resilience of the network service provider community throughout the Americas?

Eric Rutter: The turmoil of the last couple of years has forced the network service provider (NSP) community to recognize the importance of its relationships with technology and supply chain partners. Developing deeper and more sophisticated relationships rooted in transparency, accountability, and agility will be critical to any NSP’s ability to deliver value to its subscribers in turbulent times in an environment that will only become more volatile in the months and years to come.

That is why I believe that vendor management has evolved into partner management and is a competency that will set apart successful ecosystems that support NSPs from those that will struggle in the market through the rest of the decade. There has never been a more important time to foster and improve partnerships. It is the key to driving better-informed decisions and accelerating the entire value chain’s ability to act immediately on those decisions. In order for this to happen, partners need to be included in the early stages of NSP planning processes so that the entire team can optimize its ability to achieve key business objectives.

Today that is exactly what we are seeing among leading NSPs. They have demonstrated a willingness to revisit past assumptions and embrace new strategies that reflect the realities of our current environment. For instance, after decades of pursuing lean, just-in-time logistics strategies, a growing number of carriers are now willing to hold more inventory and explore refurbishment as a viable way to drive sales when global production is less certain than we want it to be.

This reflects the fact that NSP leaders are taking a much broader and more strategic approach to evaluating the total cost of ownership associated with bringing innovative customer premises equipment (CPE) and technologies to market and not just focusing on the cost of the device.

The total cost includes the device, but it also includes the entire life-cycle support for that device. With that in mind, it is important to understand what additional value strategic partners can add.

As we look across the entire region of the Americas, it is vital to recognize how NSPs respond to local economic realities. These realities have a tremendous effect on average revenue per user (ARPU) when it comes to CPE deployment strategies. There are significant differences in how North America and the LATAM region absorb costs associated with supply chain disruptions.

It speaks yet again to the importance of developing partnerships that are responsive to how macro-economic — and even geopolitical — events affect the ability to maintain continuity of CPE supply. Regions working with fixed capital budgets may choose to reduce the volume of new devices and rely more heavily on refurbishment. These are all conversations currently taking place across the NSP ecosystem.

Q: How does that translate into sourcing decisions?

Production and sourcing strategies have seen some of the most robust and dynamic changes when it comes to bringing innovative CPE to market. Even before COVID-19, the industry had been working through a series of supply shocks caused by shortages in critical materials and components.

Over the past few years, we have seen a fairly dramatic shift in the mindset of NSPs as executives bring their focus on diversification to maintain continuity of supply.

As a result, NSPs are currently seeking multiple system-on-a-chip (SoC) providers, multiple original equipment manufacturing (OEM) partners, and even multiple manufacturing locations to avoid catastrophic breakdowns in the supply chain. We are even seeing NSPs invest in contingency plans to address plant and port shutdowns that we have seen with disturbing frequency through different COVID-19 variant outbreaks.

With diversification comes complexity. It is yet another reason to develop and nurture strong partnerships that feature clear lines of communication and accountability to manage the growing complexity of maintaining a redundant and resilient supply chain.

Technicolor Connected Home has been a leader in diversification. Our expertise in delivering best-in-class CPE and a deep portfolio of strong partnerships across the entire ecosystem has positioned our teams to foster partnership opportunities across complex value chains in a very unique manner.

Q: How can NSPs elevate supply chain collaboration across the Americas?

Transparency is key. The ability to provide updates on pandemic-related shutdowns across various regions in Asia as quickly and efficiently as possible allows us and our partners to make strategic decisions around planning.

It also provides the basis for managing short-term disruptions while maintaining a commitment to long-term objectives. Sustainability is a perfect case in point. The fact is, at any given moment in time, NSPs have to respond to a large number of urgent developments — including pandemics, component shortages and regional conflicts with global consequences — which could derail strategic initiatives by the industry to address major global issues — like climate and corporate social responsibility.

Active and direct communications about eco-design in the context of constantly changing realities of the day is critical. That is one of the reasons why Technicolor Connected Home was recently awarded an EcoVadis Platinum Award. The prestigious award from the world’s most trusted provider of business sustainability ratings is based on a survey of over 75,000 companies. It ranked Technicolor Connected Home among the top 1% of companies meeting aggressive commitments to design environmentally friendly products.

Technicolor Connected Home also recently announced our carbon emission commitments. We are looking to drastically increase our use of renewable energy by 2026, with a target of 90% renewable energy. We will also reduce the carbon footprint of our devices by 30% by 2030.

The recognition from EcoVadis has opened up several opportunities for us to better engage with supply chain partners looking for assistance to achieve important sustainability objectives.