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FOOTPRINT, A STREAMLINED SUPPLY CHAIN
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A GLOBAL
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A STREAMLINED SUPPLY CHAIN With its streamlined, innovative supply chain, ZTE USA is forging a new path in the telecommunications market. By transforming its customer experience, the US subsidiary is turning the mobile industry on its head and ushering in a new decade of innovation
O
nce unknown outside of China, ZTE turned its attention to the USA in 1998, carving out a market share on the continent. Fast-forward two decades, and the mobile behemoth is now a household name, growing to become the fourth-largest smartphone supplier in the US. The success of ZTE USA has been legendary in the telecommunications industry and, thanks to its resourceful supply chain, it seems that the company is set to continue on this upward trajectory. Kevin Finerty, SVP of Supply Chain and Quality at ZTE USA, says that the company’s ethos has been integral to its success. “ZTE positions itself as a telecommunications company that offers premium quality at an affordable price,” notes Finerty. “That’s where we want to make our mark in the US market and that’s where, quite frankly, we have already been making a mark. “We’re one of the top patent holders year-on-year, especially when it comes to Long-Term Evolution (LTE) and 5G technology, and we have
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a very clear vision of how we fit in the industry ecosystem,” he adds. “But we have bigger aspirations than just succeeding in our niche – we’d like to expand further. We are currently the fourth largest original equipment manufacturer (OEM) in the market and we’re aiming to become the third largest.”
KEVIN FINERTY
SVP of Supply Chain and Quality at ZTE USA
As the Senior Vice President of Supply Chain and Quality for ZTE USA, Mr. Finerty is responsible for ensuring the supply of quality products to US and Canadian wireless carriers. He and his team manage the dayto-day supply operations as well as coordinate directly with both ZTE and customer teams in China.
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Driving efficiency in its supply chain Renowned for its technological ingenuity, ZTE USA’s strategy of offering innovative, quality products at mid-tier prices has helped the company gain a foothold in the US market. Finerty says that this pioneering mindset has also applied to the subsidiary’s supply chain function where digitization strategies are helping to streamline operations. By implementing a collaborative, planning, forecasting, and replenishment (CPFR) method and using the Oracle-based product
Demantra, the US subsidiary is using data analytics to promote greater integration, visibility, and cooperation between its partner’s supply chains. In doing so, ZTE USA hopes to transform its intricate supply network. “Ultimately, it comes down to communication with the customer and having a weekly discussion about the company’s forecast, replenishment plans, demands, and supply chain system,” notes Finerty. “Getting data about our supply function isn’t as hard as it may seem. Our customers are typically willing to share their data because they
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LIXIN CHENG, CEO ZTE MOBILE DEVICES SHARES HOW FOCUSING ON YOUR ROOTS CAN HELP DRIVE BREAKTHROUGH INNOVATION
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“Data visualization is really helping us to drive efficiencies in our
supply chain” – Kevin Finerty, SVP of Supply Chain and Quality at ZTE USA
want to know what our supply chain looks like,” he adds. “By using our new systems, such as Demantra, we communicate this data back to China which allows ZTE to have clearer communication around what the customers’ demands are now and what they are going to be in the future.” Data and analytics Like many technologically advanced companies, big data is playing a significant role in the way ZTE USA does business. Having this data is
one thing, says Finerty, but taking it to a new level where you can digitize it and visualize it is another crucial part of the company’s transformation. “Data visualization is really helping us to drive efficiencies in our supply chain and we are working closely with companies such as Tableau to achieve that,” says Finerty. “It helps our sales team look at the region, product, market or carrier, and see what’s doing well and where we need to focus our marketing, promotion and supply chain operations. “Our leaders in China are continually spearheading new innovations for the corporation, but if I take a step back from that and see what we can really achieve right now from a supply chain perspective, it’s about having the most
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ZTE IS CURRENTLY THE FOURTH LARGEST SMARTPHONE SUPPLIER IN NORTH AMERICA BEHIND APPLE, SAMSUNG, AND LG.
up-to-date information to help us meet our customer’s needs,” he says. “We can see what’s happening in real-time and prepare for changes in the supply chain and that’s very advantageous.” Dual distribution center strategy This strategy is helping to accelerate the company’s growth however, ZTE USA is not only interested in digital transformations, it is also transforming its operations by implementing a dual distribution center strategy in the US. This tactic is helping ZTE USA
quicken its distribution times, reduce costs and deliver more directly to its customers through the ZTE USA’s website or through retailers like Amazon and Newegg. “It’s great for us to be able to ship directly to the consumer,” notes Finerty. “Yet, in other instances, it might make more sense to work with one of our partners to get the best value for the dollar. In this way, the dual distribution center is really helping us to make our operations more cost-effective, depending on the business type.”
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Undoubtedly, ZTE USA has experienced exponential growth. However, despite the pressing challenges of a growing supply chain and brand name, ZTE USA has remarkably achieved this success without extra manpower. “ZTE volumes in the US have grown over 70% in terms of units delivered from 2016 to 2017, but we’ve done it with the same amount of people,” notes Finerty. “If you’re managing your business in the right away and you have the systems in place to do that, you don’t necessarily need more people to ship more pallets. You just need better preparation, better communication and better planning.” Global Footprint The company’s burgeoning size has not only been advantageous for its bottom line, it has also helped ZTE USA develop strategic partnerships thanks to its growing brand. “I think we have great opportunities to leverage just the sheer size of ZTE,” reflects Finerty. “We have a lot of established supply relationships so when we go to the table to meet
with companies - whether it’s somebody stateside or a global brand - that relationship is already established and I’d say that’s really one of the big positives.” Whilst the company’s immense size can be valuable, it also poses its challenges. “We can have some communication challenges, in terms of finding out if there are supply issues,” says Finerty. “For instance, the overall cultural differences between China and the US can also present some complications. It’s really incumbent upon the US team to learn how the Chinese teams operate and how it’s best to communicate with our counterparts in Asia. I think for those of us, like myself, who have been here several years, we’re still learning, but we are progressing well. I think that’s valuable from a talent perspective for ZTE USA.” By utilizing its digital tools and data, ZTE USA has taken an intuitive approach to its supply chain, delivering purchase orders early if possible and supplying surplus stock during promotion periods. “If you’re always presenting how you
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can help, eventually suppliers will figure out that you’re the company that they can rely on when they need help,” Finerty notes.
“We are currently the fourth largest original equipment manufacturer (OEM) in the market and we’re aiming to become the third largest” – Kevin Finerty, SVP of Supply Chain and Quality at ZTE USA 14
Upcoming challenges ZTE USA has seen record successes, but Finerty doesn’t underestimate the challenges that lie ahead. His team is exploring how the company can retain consumers and get them to stick with the ZTE brand, and how they can harness the potential of the Internet of Things (IoT). From a supply chain perspective however, perhaps one of the company’s biggest hurdles is keeping up with material supply. When there’s a shortage of a particular chip or LCD component, it can disrupt the supply chain. As a result, Finerty and his team work closely with procurement to keep ahead of any issues and prepare for them. The other biggest challenge facing ZTE USA? Finerty believes it is SKU proliferation. Catering to both major and small mobile carriers in the US, ZTE’s customers often request a unique product. This may seem like an innocuous challenge but it has
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a profound effect on under its belt, what Employees at the product line. “Even does the future ZTE USA though the internals might hold for ZTE USA? be 90% identical, everyone “A major part of our threewants a unique SKU,” comments year planning has been focusing Finerty. “Because of SKU proliferation, on that the end-user experience,” we have to prepare and manufacture reflects Finerty. “How can we touch products on different lines and them a little bit more directly? How that’s one of the main challenges can we understand what they’re we are facing at the moment. I feeling about the overall product think perhaps as ZTE grows and experience? It’s going to be a switch shows its value there may be some of our mindset from a carrier-focused opportunity for some standardized company to a more customer-focused products across carriers.” one. It doesn’t mean that we’re going Armed with an efficient supply chain to walk away from being the best and rigorous expansion plan, ZTE provider and supplier we can be for USA has become a well-recognized the carriers - it means we’re going name in the US in the short space of to take it up another level to really 10 years. But with such successes understand that customer mindset.”
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United States, Texas, Richardson, N Central, 75080 Tel. 02034508722 www.zteusa.com