page_title: Lenovo
section_title: Operations
hierarchical_section_title: Lenovo / Operations
caption_attribution_description: English: Lenovo R&amp;D Center, Shenzhen
context_page_description: Lenovo Group Limited, often shortened to Lenovo, is a Hong Kong based Chinese multinational technology company. It is headquartered in Quarry Bay, with additional operational headquarters in Morrisville, North Carolina and Beijing. The company designs, develops, manufactures, and sells personal computers, tablet computers, smartphones, workstations, servers, electronic storage devices, IT management software, and smart televisions, and is the world's largest personal computer vendor by unit sales as of March 2019. It also markets the ThinkPad and ThinkBook business lines of notebook computers; IdeaPad, Yoga, and Legion consumer lines of notebook laptops; and the IdeaCentre and ThinkCentre lines of desktops.
  Lenovo has operations in over 60 countries and sells its products in around 160 countries. It has research centers in Beijing, Chengdu, Yamato, Shanghai, Shenzhen, and Morrisville, and also has Lenovo NEC Holdings, a joint venture with NEC that produces personal computers for the Japanese market.
  Lenovo was founded in Beijing in November 1984 as Legend, and was incorporated in Hong Kong in 1988.
context_section_description: Lenovo's principal facilities are in Beijing, Morrisville, North Carolina and Singapore, with research centers in Beijing, Morrisville, Shanghai, Shenzhen, Xiamen, Chengdu, Nanjing, and Wuhan in China, and Yamato in Kanagawa Prefecture, Japan. Lenovo operates factories in Chengdu and Hefei in China, and in Japan. A 700-square-metre (7,500 sq ft) flagship store opened in Beijing in February 2013.
  Lenovo's manufacturing operations are a departure from the usual industry practice of outsourcing to contract manufacturers. Lenovo instead focuses on vertical integration in order to avoid excessive reliance on original equipment manufacturers and to keep down costs. Speaking on this topic, Yang Yuanqing said, "Selling PCs is like selling fresh fruit. The speed of innovation is very fast, so you must know how to keep up with the pace, control inventory, to match supply with demand and handle very fast turnover." Lenovo benefited from its vertical integration after flooding affected hard-drive manufacturers in Thailand in 2011, as the company could continue manufacturing operations by shifting production towards products for which hard drives were still available.
  Lenovo began to emphasize vertical integration after a meeting in 2009 in which CEO Yang Yuanqing, and the head of Lenovo's supply chain, analyzed the costs versus the benefits of in-house manufacturing, and decided to make at least 50% of Lenovo's manufacturing in-house. Lenovo Chief Technology Officer George He said that vertical integration is having an important role in product development. He stated, "If you look at the industry trends, most innovations for" PCs, smartphones, tablets and smart TVs are related to innovation of key components—display, battery and storage. Differentiation of key parts is so important. So we started investing more ... and working very closely with key parts suppliers." Previously, lack of integration due to numerous foreign acquisitions and an excessive number of "key performance indicators" (KPIs) was making Lenovo's expansion expensive and creating unacceptably slow delivery times to end-customers. Lenovo responded by reducing the number of KPIs from 150 to 5, offering intensive training to managers, and working to create a global Lenovo culture. Lenovo also doubled-down on vertical integration and manufacturing near target markets in order to cut costs at time when its competitors were making increased use of outsourcing off-shoring. By 2013, Lenovo ranked 20th on Gartner's list of top 50 supply chains, whereas in 2010 the company was unranked.
  In 2012, Lenovo partially moved production of its ThinkPad line of computers to Japan. ThinkPads will be produced by NEC in Yamagata Prefecture. Akaemi Watanabe, president of Lenovo Japan, said, "As a Japanese, I am glad to see the return to domestic production and the goal is to realize full-scale production as this will improve our image and make the products more acceptable to Japanese customers."
  In October 2012, Lenovo announced that it would start assembling computers in Whitsett, North Carolina. Production of desktop and laptop computers, including the ThinkPad Helix began in January 2013. As of July 2013, 115 workers were employed at this facility. Lenovo has been in Whitsett since 2008, where it also has centers for logistics, customer service, and return processing.
  In 2015, Lenovo and Hong Kong Cyberport Management Company Limited, a government-sponsored business park for technology firms, reached a deal to "jointly build a cloud service and product research and development center". Lenovo's Asia Pacific data center will also be housed in Cyperport.
  Lenovo assembles smartphones in Chennai, India through a contract manufacturing agreement with Flextronics. In November 2015, Lenovo announced that it would start manufacturing computers in Pondicherry.
caption: The Lenovo R&D centre in Shenzhen, Guangdong
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