Cost innovation has been used to describe how firms offer a variety of customised and high-tech products at low prices. Insights into how this trade-off is overcome by supply chain design are lacking. This paper analyses the global supply chain strategies and practices of Huawei Technologies, and specifically how these contribute to cost innovation capability. The paper is based on interviews with managers at Huawei headquarters in Shenzhen, plus managers at two European supply chain centres. The case study shows that even though Huawei does not possess specifically unique supply chain solutions, there are some features that drive Huawei towards cost innovation in its supply chains. Some of them concern low-cost operations based on the location of main R&D, manufacturing and suppliers to China, in combination with a strong customer orientation, an integrated supply chain organisation and a balanced outsourcing strategy.
Given that aligning supply chain strategies with changing productcharacteristics across the phases of the product life cycle is increasinglyimportant, this study investigates the changes in supply and demand uncertaintywhen a product enters the decline phase and how these changes in turn affectthe supply chain strategies applied. Based on four case studies, the analysisreveals that the uncertainties increase in three of four cases when the productenters the decline phase, and that the type of uncertainty, as well as the relatedchallenges, depends on the product’s initial uncertainty of supply and demand.This implies that companies need to redesign their supply chain strategiestowards either more lean or more agile supply chains, or combinations thereof,when the products are declining.
When customer demand becomes increasingly volatile and product life cycle shortens, a capability to dynamically adjust the supply chain during the product life cycle becomes more urgent. The study’s purpose is to extend knowledge of dynamic supply chain design and management when the product is in the decline phase of its life cycle. A case study from a global telecom company reveals several challenges for supply chain management and solutions for handling these challenges when a product is beyond the peak. The findings are summarized in a tentative model that specifies supply chain challenges and strategies over the life cycle.