Reuse Best Practices
Thursday, September 02, 2010
Rain, Wind, Ice…and Reuse
Looks as though hurricane season is in full swing. Hurricane Earl is bearing down on the Eastern U.S. seaboard and weather prognosticators are predicting no fewer than 14 named storms this season. While hurricanes may not be a common occurrence for us here in the New England, they certainly are for other regions as much as severe snow and ice storms can bring us to our knees in winter. So, what does this all have to do with reuse? Well, a lot actually.
Severe weather and natural disasters (i.e. earthquakes, volcano eruptions) can have a tremendous impact on service providers’ network operations. And communication, particularly in the hours and days following an event, is absolutely critical for first responders, relief efforts and families trying to connect with loved ones.
Restoring service quickly could very well hinge on how fast a carrier or OEM (if they’re operating a network as part of a managed services deal) is able to source replacement parts. With little, or no, visibility into equipment inventories it’s going to take longer to locate, transport and install assets despite the best intentions of existing disaster response and recovery plans.
While reuse strategies can’t predict the weather, this type of an approach can help you plan better for events like hurricane season and winter storms. By establishing greater visibility into stocks, you’ll not only know what excess equipment you have (and what you don’t) and where it’s located, but more importantly you’ll be able to incorporate severe weather patterns into your long-term planning and procurement processes. As a result, you’ll be better prepared when the time comes to respond with speed and efficiency.
Posted by Todd Adelman •
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Reuse Best Practices •
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Tuesday, August 03, 2010
The Measure of More
I like value propositions. They both engage and enlighten. They help determine where we spend our money and our time. The key is separating the vague and mediocre propositions from the value props that are actually capable of delivering greater efficiency.. increased revenue.. lower costs..better client service. More often than not, companies fall short when it comes to transferring value statements into something truly meaningful to a customer – the language of currency. Don’t just tell me I’m going to save money or make money. Show me.
Now, I know what you’re thinking. ‘So tell us Mark, what’s the value of reuse – in black and white.’ Well, it’s startling. Through our knowledge of how telecom supply chains work we’ve created a financial ROI model that does just that…and has been proven out at some of the world’s largest organizations. The model is powered by variables set by each client, including the volume of excess and decommissioned equipment you plan to reuse, resell or recycle over a period of time, across X networks, etc. We recently ran the model for executives at a large global carrier and the value to the client over the course five years was more than €23 million net. Pretty black and white, I’d say. That is a value prop. That is the measure of more.
If you’d like to learn more about our model and what your potential savings could be, drop us a note at info@tradewings.com.
Posted by Mark Portu •
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Reuse Best Practices •
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Wednesday, July 07, 2010
The Cycle Continues
France Telecom’s new CEO, Stephane Richard, was out in front of the press earlier this week detailing the carrier’s five-year strategic growth plan. It’s a big, bold and ambitious plan that by 2015 could see Orange the service provider of choice for 300 million people. By my calculation, that amounts to roughly 22% of the world’s population. How does France Telecom plan to go from 192 million to 300 million customers in five years? Upgrade existing networks and capitalize on the explosive growth in markets such as the Middle East and Africa. Making the most of new opportunities in emerging markets will almost certainly involve a few strategic acquisitions, which are en vogue across the industry (right now, the industry’s on pace to have its busiest year of M&A since 2005 when transactions topped $408 billion).
Any time there’s an acquisition in this industry, the price tag, expected revenue and customer growth will almost certainly grab all of the headlines. What you won’t hear much about though is how these companies plan to manage all of their newly acquired network assets for maximum profit. A seemingly minor detail to a large transaction? That’s a dangerous omission for firms looking to assuage investors of a multi-billion dollar deal. When you get right down to it, the financial models created to support an acquisition are predicated on metrics such as operational efficiency, integration of network infrastructure, and service delivery levels. If a company can’t answer fundamental questions about the location, condition, or value of those millions of network assets it just acquired, discharging those models will become daunting at best.
Tuesday, June 29, 2010
Capex and Wall Street
From my perspective, this excerpt from a recent (June 16) Reuters article offers a fascinating glimpse into Wall Street’s mindset regarding the impact of current network investments on long-term market cap:
"Investors could be surprised by capex plans over the coming years and for a sector still generally mistrusted to allocate capital optimally, this is likely to lead to volatility in the shares," said James Gautrey, telecommunications analyst at Schroders. "Until I see more concrete evidence that the companies will generate a decent return from their fiber/mobile investments, there are better opportunities elsewhere.”
We’ve all heard about the explosion of mobile data traffic and subsequent requirement for network expansion (Apple sold another 1.7 million iPhone’s over the weekend). Which is precisely why Wall Street’s radar is so attuned to capex ratios. Challenging Wall Street perceptions such as Mr. Gautrey’s will require carriers to find new and better ways to optimize equipment planning, sourcing and disposition, and extend the overall value of their network investments. At the end of the day, far too many assets are still left in the dust before they’ve even come close to reaching their full revenue potential.
Monday, April 19, 2010
The “Spares vs Repairs” Debate
Can there be anything more frustrating than running around the house in the morning looking for your car keys only to find them sitting on the kitchen table – exactly where you left them the night before? That’s a direct byproduct of discursive and distracted thinking. In the early stages of client engagements we often see similar thought patterns plaguing carrier and OEM equipment repair strategies. Repairs are typically viewed as a necessary component of the service chain but other obvious economic and environmental repair-related opportunities constantly escape the guise of most managers. Why? Lack of visibility into their ecosystem and how it directly relates to their repair strategy. It’s that simple.
But change is on the horizon. At long last, we’re beginning to see the ‘spare v. repair’ conversation gaining traction among carriers and equipment manufacturers as the need to inject fresh ideas into their supply chain becomes too much to ignore. When we talk about repair strategies, ‘keys’ equate to visibility into the equipment install base, the ecosystem spares pool, planned upgrades and de-installs, and new managed service agreements. That may all sound complicated but once a dialog has been started about capturing asset data as opposed to physical assets, the ‘keys’ emerge pretty quickly. And one of the great benefits of visibility is that it reveals assets an organization already owns.
From a carrier or OEM perspective, finding assets you already own sitting idly should be like finding the pot of gold at the end of the rainbow. Why deal with the costs and headaches of repairing equipment when a spare is ready to be put back into service immediately?Just as assets move from manufacturing and into the service and reverse logistics chains, the strategy for optimizing assets must also evolve. If service managers are to get the maximum value from reverse logistics flows, a different viewpoint is essential. Asset visibility is the single most important factor in reducing service managers’ repair costs. And that’s the power of a reuse strategy.
Posted by Todd Adelman •
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Reuse Best Practices •
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