Nortel Networks is in partnership discussions with
Singapore-based Flextronics International to offload its
manufacturing interests, which cost the network gear maker
approximately $2bn in production costs.
As part of its strategy, Nortel said it intends to transfer all
of its remaining manufacturing activities, including product
integration, testing, and repair operations carried out in the
company’s systems houses in Canada, Brazil, Northern Ireland and
France.
If the deal goes through, management of the supply chain and
related suppliers for these locations will be transferred to
Flextronics.
Nortel will keep its supply-chain operations' strategic
management and control responsibilities in-house, including
customer service, order management and new product integration.
Chahram Bolouri, president of global operations for Nortel, said
that by implementing this operating model, the company will be able
to drive reduced inventory and improved customer service and
responsiveness. It will also be able to focus on those areas of the
supply chain of most importance to its customers.
He added it is likely that Nortel's 2,500 employees will become
Flextronics employees once the deal is settled.
Flextronics said it is pleased to be recognised by Nortel for
its supply-chain capabilities and for its ability to meet Nortel's
time-to-market, quality and cost reduction objectives. The company
also said the proposed transaction would strengthen its position as
the leader in the infrastructure market.
Carly Suppa writes for ITWorldCanada.com