Title: Cost innovation in global supply chains: the case of Huawei Technologies

Authors: Lars Bengtsson; Weihong Wang

Addresses: Industrial Engineering and Management, University of Gävle, 801 76 Gävle, Sweden ' Industrial Engineering and Management, University of Gävle, 801 76 Gävle, Sweden

Abstract: 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.

Keywords: cost innovation; Huawei Technologies; global supply chains; supply chain design; supply chain management; SCM; trade-offs; low cost; integrated supply chains; ISC; outsourcing; telecommunications industry; case study; facility location; customer orientation.

DOI: 10.1504/IJLSM.2016.073969

International Journal of Logistics Systems and Management, 2016 Vol.23 No.2, pp.189 - 208

Received: 02 Sep 2014
Accepted: 11 Oct 2014
Published online: 31 Dec 2015 *

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