Electronics Production |
Hard pricing pressure on Ericsson forces suppliers to move
The pricing pressure on Ericsson keeps hardening. Ericsson’s shipping and purchases are to be even more effective. Ericsson has established a new department in purpose to deal with operative efficiency. One of the most important parts of the work with increasing the efficiency is to reduce the supply chain, writes the Swedish electronics magazine Elektroniktidningen.
According to "Elektroniktidningen" 60 to 70% of Ericsson's product value is created in the supply chain. Very few suppliers gets thier own contracts with Ericsson. Most of the suppliers becomes sub-suppliers to Ericsson's suppliers, which further contributes to the pricing pressure.
When Ericsson transfers parts of their production to China it is important for the suppliers move along. When suppliers such as Emerson Network Power Energy Systems are joining Ericsson's move-out Ericsson's sub-suppliers are totally being replaced. Not only lower wages are of interest but also attitudes, way of working and infrastructure. When Emerson for four years ago had it's main part of production in Sweden most of the suppliers were Swedish. Today none of them is from Sweden.
