Outsourced Telecom Manufacturing Indicates Trend

PARSIPPANY, N.J., Jan. 11 -- NEC Corp. is one of many major telecom suppliers opting to sell or outsource their manufacturing operations, according to a report from market forecaster INSIGHT RESEARCH.

This shift means that operational efficiencies and cost reductions have become the first law in supplier relationships, the report says.

"When supply chain management techniques are adopted, telecom purchasing agents can easily rationalize supplier selections, narrowing down the decision from thousands to just a select few," said INSIGHT President Robert Rosenberg. "As this rationalization takes hold industry-wide, vendors start to feel the squeeze. If operational efficiencies are not there, vendor management can take the pressure off by outsourcing their manufacturing operation. This was part of the reason that NEC's operations were sold."