Seimens Rolm Communications, Inc.: Integrated Logistics Core Process Redesign

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Seimens ROLM Communications, Inc.: Integrated Logistics Core Process Redesign

REPORT
Industry Background
ROLM was involved in the production and development of Private Branch Exchange (PBX) systems. The major players in the PBX industry at that time were AT & T, Northern Telecom and ROLM. In the early 1990’s the US PBX industry was facing a difficult time. None of the major PBX suppliers made any profit from their PBX operations from 1990 to 1992. The market place was highly competitive and depressed. This made the various PBX suppliers to get into price wars in order to maintain their market shares. They did severe price cutting for basic PBX hardware. They expected to make some profits by increasing their production capacity, add-ons, upgrades and services. AT & T and Northern Telecom turned the PBX market into a commodity business by following a high volume business strategy. They wanted to take advantage of economies of scale for generating profit. RPLM decided to differentiate itself in this competitive market by giving its customers the facility for more flexibility and customization. The key to success in future for all the players in the PBX market was new product development and providing advanced customization services.

Company Background
ROLM was founded in 1969 by four electrical engineers. The basic idea was to develop a military specification (mil-spec) computer. The company decided to enter the PBX market by 1973. The company successfully launched its first Computer Controlled Private Branch Exchange (CBX) in 1975. By 1979 ROLM was the leader in the specialised telephone equipment market. In 1984 the company was acquired by IBM. From a period of 1985 to 1988 the market share of the company grew by approximately 5% and reached to 20%. In 1989 the company’s manufacturing and development operations were sold to SEIMENS AG. A joint venture was created between IBM and Seimens to handle sales, service and marketing. The total employee...
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