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Supply Chain Management Conference 2004 Nancy Zhou VP of Operation UTStarcom (China) Supply Chain Transformation at UTStarcom Jamie Bolton Partner of SCM Accenture (China) April 15, 2004
Supply Chain Management Conference 2004
Nancy Zhou
VP of Operation
UTStarcom (China)
Supply Chain Transformation
at UTStarcom
Jamie Bolton
Partner of SCM
Accenture (China)
April 15, 2004
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Some information we will discuss during thispresentation is forward-looking in nature and subject torisks and uncertainties that may cause actual results todiffer materially from our current expectations.
To understand the risks that could cause results to differ,please refer to the risk factors identified in our AnnualReport on Form 10-K and Quarterly Reports on Form10-Q as filed with the Securities and ExchangeCommission.
Safe Harbor
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2000 2001 2002 2003E 2004E2000 2001 2002 2003E 2004E
$369
$627
$982
$1,970
Financial Performance - Annual
Revenues GAAP EPS
$ Millions
$0.52
$0.94
$0.27
$1.62
$2,450 $1.94
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-60%
-40%
-20%
0%
20%
40%
60%
80%
100%
120%
1999 2000 2001 2002 2003
Source: UTSI 2002, 2003 Annual Report; Nokia 2002, 2003 Annual Report; Cisco 2002, 2003 Annual Report; Motorola 2002, 2003 Annual Report; Notel 2002 Annual Report; Lucent 2002, 2003 Annual Report; Alcatel 2002 Annual Report; ZTE 2002 Annual Report; <The Truth of Hua Wei>; Accenture Analysis
Revenue Growth
We have outperformed our global and Chinese competitors in the revenue growth.
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Market Recognition
• #31 in “Fastest-Growing Companies”
• #33 in “100 Hot Growth Companies”
• #37 in “Info Tech 100”
• “Global 2000” List
• “Top 25 Fastest Growing Tech Companies”
• Top 10 of Investor’s Business Daily 100
• #1 in “Fastest Growing Tech Companies”
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Access Layer
PSTN/PLMN &
IN(CAMEL)
2G/3G RANPBX
V5 AN
POTSSS7/CAP/MAP
PCPC
CPE
IP-DSLAM
OSS/NMS
HLR/AuCDNS, DHCP Server,
SNMP, Radius ServerVLR CGCall Server
IN/VAS/App ServerControl /
Service
Level
UT AMG UT WMG UT SG UT TMG
UT 3G
MG+
IP Core Switch
MediaStation
iPAS
Managed IP Network
IP-Core (IP-Based Core Switching)
IP Core Network is Key
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Capitalizing on Major Telecom Trends
Voice: Wireline Wireless PAS/iPAS & 3G
Data: Narrowband Broadband AN-2000 & iAN
Switch: Circuit (TDM) Packet (IP) mSwitch
FROM TO
UTStarcom
SOLUTIONS
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Global Presence – Key Customers
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Long-Term Growth and Sustainability
Sustainable Growth Strategy
Global
Presence
• Penetrate New China Markets and Installed Base
• Develop Global Sales Organization and Distribution
• Expand Tier 1 Customer Base Worldwide
• Grow Organically and Through Strategic M&A
• Leverage Labor and Manufacturing Cost Advantage in China
• Focus on Profitability
Strong Financial
Performance
Technology
Innovator
• Maintain R&D Investment Across Product Lines
• First to market with the most cost-effective solutions customized to customers needs and user demands
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Supply Chain Improvement Opportunities
• Improve demand forecasting accuracy
• Increase ability to cost effectively respond to order changes
• Better integrate PLM and supply chain processes to improve quality and speed to market for NPI’s
• Better leverage strategic sourcing and establish partnerships with strategic suppliers to
•Continuously drive improved quality
•Reduce long lead times of critical parts
•Better manage frequent engineering changes
• Improve demand planning capability to improve production planning efficiency
• Continuously drive higher inventory turns
• Increase network inventory visibility
• Implement supply chain decision support tools
• Review current supply chain network configuration
• Gain increased understanding of true “cost to serve”
Share
Holder
Value
Profitability
Invested
Capital
Revenue
Cost
Fixed
Capital
Working
Capital
Opportunities & Challenges
Shareholder Value Impact
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Need for New Supply Chain Capabilities
The requirements placed on UTStarcom’s supply chain are
becoming increasingly challenging.
Product Management Complexity
Product Range
Time between new product introductions
Years
Quarters
Months
Weeks
Days
NPI Frequency No. of
SKU’sIncreasing need for supply chain agility
Requirement for lean efficient manufacturing
for cost competitive advantage
Requirement for flexible, responsive
supply chain capabilities to maintain
market leadership
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Supply Chain Agility
Demand Predictability
Product Variety
High
High
UTStarcom is developing agile supply chain capabilities to be
responsive to changing market conditions and maintain market
leadership.
Lean Supply Chain
Characteristics
Agile Supply Chain
Characteristics
Low
Decreasing
Increasing
Required for high volume, low variety predictable environments
Required for less predictable, more variable environments with high requirements for variety
UTStarcom Supply Chain Characteristics
Demand Predictability is Decreasing
• Product lifecycles shorten
• Supply side constraints for critical components
• Demand forecasting increasingly challenging
Product Variety is Increasing
• Increasing number of raw materials SKU’s with
continuos introduction at a greater rate
• Expanding finished goods product range to
meet individual customer requirements
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Supply Chain Excellence Journey
Functional Integration Collaboration Synchronisation
Within
Business
Activities
Within Business
Processes
With
Customers & Suppliers
Across Alliance
Partners
Process
Across Business
Processes
Degree of Excellence
Supply Chain
Breadth
UTStarcom is moving to a synchronised supply chain by creating a
responsive supply chain and is taking manageable yet aggressive
steps to get there.
Stabilise the Current Situation
“Fix Broken Processes”
Build The Foundation
“Position for the Future”
Complete Synchronisation
“Industry Dominance”
Supply Chain Management Conference 2004
Thank You!
