The Lightwave Blog

Posted by Stephen Hardy

Remember those "lean manufacturing" initiatives we heard optical component and subsystem companies blame for last year's poor start? (See here and here for reminders.) Well, they're not over yet -- they're just moving farther down the food chain.

In a recent conversation, JDSU's Craig Iwata, senior director of marketing and business operations, told me that the adoption of lean business practices by systems houses last year had two major effects. The first was that it gave the systems vendors an opportunity to re-examine their inventory requirements; several decided they didn't need to carry as many spare parts, which led to the aforementioned slowdown in orders.

The second effect was a shortening of lead times, down to three weeks in some cases. So what can a company like JDSU do to meet these reduced lead times? Why, institute lean business practices itself. The company feels so strongly about its decision that it's hosting a webcast on the subject February 13. (Find details here.)

You can't blame JDSU and other subsystem vendors for taking this approach. But this certainly can't be good news for component suppliers to JDSU and companies of its ilk. They already suffered a trickle-down effect from the spread of lean practices at the systems level in 2007; a repeat at the subsystems level suggests component companies will see another year get off to a rocky start.

Labels: JDSU