To more effectively meet the rapidly changing needs of its customers, Lucent Technologies announced today it will transition its global equipment manufacturing operations to focus on high-end process manufacturing and systems integration, including new product introductions, supply chain management and system testing. The company, including its new Enterprise Networks Group which is being spun off, indicated that it will expand its relationships with contract manufacturing partners. Lucent said this step would enable it to respond more quickly to changes in customers' demands and allow it to focus its capital in other critical areas.
Today there are companies whose sole business is manufacturing sophisticated electronics equipment.
They can provide us with the high-quality products and flexibility we need to increase our speed to market and improve our cash flow. Lucent also will establish several facilities as systems integration houses that will pull together the networking solutions for customers by assembling and integrating products from contract manufacturing partners with the offerings from Lucent's software and network design centers. Lucent also plans on increasing its emphasis on the professional services business as it meets growing demand for the installation of complex service provider networks. We are actively working with our unions and the nation's leading contract manufacturers. McGinn noted that expanding the use of contract manufacturers also would have a positive impact on return on assets and cash flow.