Agência Estado O Brasil é o sexto maior mercado para celulares no mundo e os grandes países emergentes, como China, Índia e Rússia, além do próprio Brasil, já são os principais responsáveis pelo crescimento do setor de telecomunicações no mundo. No total, o mundo soma 1 bilhão de usuários de internet e 4 bilhões de usuários de celulares e de telefones fixos. Os dados são da União Internacional de Telecomunicações (UIT), que ontem publicou seu relatório anual. No entanto, a distância entre os países ricos e os mais pobres ainda é considerada "profunda" pela organização.
ão de telefones fixos e 2,68 bilhões de celulares, dos quais 61% estão nos países em desenvolvimento. O que impressiona a organização é que quase a totalidade do crescimento está vindo dos grandes países emergentes. No primeiro trimestre do ano, apenas a China e a Índia registraram quase 200 milhões de novos usuários de celular - 87 milhões na China e 110 milhões na Índia.
Segundo a UIT, o Brasil registrou até o final do ano passado um total de 100 milhões de usuários de celular. O País é superado apenas pela China (461 milhões de usuários), EUA (233 milhões), Japão, Rússia e Índia. Em 2005, os sinais de celulares atingiam 88% do território nacional e o número de usuários é hoje quatro vezes maior que em 2001. As informações são do jornal.

O Estado de S.Paulo.

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Vivo: Smartphones to grow 50% to 300k handsets by end-2007

Brazil's largest mobile operator Vivo expects a 50% growth in smartphone handsets to 300,000 by the end of 2007 from 200,000 currently in use, news service Valor Online reported Vivo's VP for operations Paulo César Teixeira as saying.

By the end of 2008, the number of smartphones is likely to skyrocket to 800,000 in the country, Teixeira predicted.

According to the executive, smartphones such as BlackBerry are one of the most lucrative sources of revenue for cell phone companies in Brazil.

Vivo, which reported this week a net loss of 113mn reais (US$60mn) for the second quarter of 2007, down 77% compared to the 493mn-real loss in 2Q06, is betting on this growth in smartphone handsets, the newspaper reported.

"Smartphones are already a reality in the corporate market. But we are starting to see demand from individual users," Teixeira said.

Vivo and Canadian wireless solutions provider Research In Motion, which makes Black! Berry, have signed an agreement to launch the BlackBerry Curve model in Brazil, in addition to the other BlackBerry and smartphones it already offers, newspapers reported.

The BlackBerry Curve includes a camera, BlackBerry Maps, a media player as well as core functionality such as email, text and instant messaging, and a web browser, according to RIM's website.

Vivo will offer three packages from between 1,049 reais and 749 reais depending on the plan.

Vivo has exclusive rights to sell the smartphone for one month, the newspaper reported. The company has not released its expected targets.

Other operators such as mobile phone companies TIM and Claro, part of America Móvil, already offer RIM's BlackBerry smartphones in Brazil.

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Is China Always the Answer?

by Jeremy N. Smith
World Trade Magazine
July 6, 2006

It depends. ‘Reverse migrations’ are more common as companies start bringing their supply chains back closer to home.

We get a lot of customers who come up to us and say, ‘We’re building this product in the United States, we need to move to China,’” says Craig London, Solectron Corporation’s executive vice president, strategy, marketing, global services and corporate development. “We say, ‘Why?’”

At first glance, that seems like the wrong question. Why not? China’s attractions are well known: a billion-worker low-cost labor pool and myriad materials suppliers, vast exporting experience and a huge and growing domestic consumer market. But, as manufacturers like Solectron have come to appreciate in recent years, there’s more to the equation than first meets the eye.

Take a market for a contract electronics manufacturer not unlike Solection where some 80% of its customers reside in the United States. London goes through the sequence of likely events: “Suppliers ship all the components to China. We make it for you. We ship out with a value-added tax. It sits on a boat for six weeks.” Plus, such complications like the possibility of engineering problems or the difficulties of effective communication on a twelve-hour time difference.

“Add it all up,” London says. “Does this make sense?” More and more, he’s not sure. In fact, as was the case with Solectron and an increasing number of U.S. manufacturers, maybe the right answer is, “We should move it all to Guadalajara.”

Tip of the ‘priceberg’

It’s a matter of trade-offs. Yes, typical wages in China remain half of those in Mexico, but the cost of Chinese shipment to the United States averages about ten percent of the total value of shipped goods. Trucking from Mexico, by contrast, raises prices only about two to three percent. The difference in how long that transport takes is even more dramatic: six weeks by ship versus twenty-four hours by truck.

Mitchell Quint and Dermot Shorten, both of Booz Allen Hamilton, examine such trade-offs in The Missing Link: Designing Supply Chains for Growth, Profitability, and Resilience. “In recent years, when companies examine their profits and losses, Asia, especially China, is the most apparent solution,” they write. “It has the cheapest labor, a pro-business environment, a productive work force, and strong government support for keeping domestic manufacturing operations as inexpensive as possible—a direct path to easy cost-cutting.”

Not surprisingly, from 1998 to 2002, for example, Asian automotive supplier contracts rose from 4 to 30 percent at one U.S. carmaker. The average apparel company spends half of each procurement dollar in Asia. And, both percentages are expected only to grow.

But as the authors warn, “the Chinese experience can turn sour when procurement managers fail to systematically assess the fit between the requirements for purchased components and the realities of the China-based supply chain.” Indeed, China-based sourcing can “inadvertently increase cost of operations and put revenue at risk—thereby compromising their profitability.”

The alternative? Some commodities that are sourced in China, it turns out, can more wisely be procured from nearer low-cost regions, “or even from domestic sources.”

That’s what Tellabs decided. Last year, the communications equipment maker, lured by lower labor costs, was well on its way to shifting considerable manufacturing from Guadalajara to China when it abruptly put on the brakes. Why? Quashing enthusiasm was a three-to-six-week longer lag time between customer orders and the Chinese contract manufacturer’s delivery as well as the discovery that the Chinese would impose a nearly twenty-percent value-added tax on raw materials (avoided only by routing China-made parts to Hong Kong and back before final shipping).

Then there was the issue of communication in a business where engineering specs can change several times a day. Would Telllabs have to rip apart finished assemblies on arrival? And, there’s the need to get product to market fast in the high-tech field before they become obsolete. Chinese manufacturers ship most goods by sea-based containers, a six-week transit to the U.S. Consultants calculated that Tellabs could lose its entire Chinese labor savings if forced to deliver just 10 percent of its volume by air rather than sea.

Dave Cooper, Solectron vice president, supply chain management, coined a phrase for this constellation of negative factors: ‘Priceberg.’ “There are certain things above the water that get a lot of attention, but then there’s a whole bunch of other things below the water that tend to get overlooked.” Factors like lead times, missed sales, service levels, proximity to customers, country risks, currency risks, inventory costs, and quality costs. “Sometimes they can amount to a larger percentage of the total problem than just the price you see above the water. You have to take the total landed cost.”

Say that procurement finds a Chinese source for a chip that costs one penny instead of the usual penny-and-a-half. Problem is, though, that the supplier sends it in a lot size of a million pieces and on a once-a-month schedule. For an operation (like Solectron) whose production processes require daily shipments to workstations, delivery costs (which might not necessarily be obvious to procurement) add another half-cent.

The buyer, in Cooper’s parlance, is looking at the tip of the Priceberg (the unit price of the chip) and not the cost of the end-to-end supply chain process.

Right services, right place

Solectron—based in Milpitas, California, and operating in more than twenty countries on five continents—is a $10.4 billion electronics contract manufacturer whose products range from laptops, routers, and storage systems to video games, car navigation systems, X-ray equipment, and ultrasound monitors. Major customers include Cisco Systems, Ericsson, Hewlett-Packard, IBM, Lucent Technologies, Motorola, NEC, Nortel Networks and Sun Microsystems.

Last year, Solectron, consistent with Craig London’s logic, expanded its decade-old Guadalajara facility to 400,000 square feet, making the site its largest plant in the Americas and one of the most sophisticated worldwide (and employing more than 5,000 workers—almost ten percent of total company employees). “Mexico allows us access to an extremely high level of expertise, education and a talented pool of local engineers,” says Dave Purvis, Solectron’s chief technical officer. “The time zone and proximity to our American customers are also advantages over Asian operations.”

Before the expansion, electronic manufacturing teams assembled, connected, and powered little more than printed circuit boards, the basic “brain” behind every electronics product from pocket watches to city-sized superconductors. Now those workers can make complete enclosed systems, be they a $10 desk telephone, a $2,000 personal computer, or a $1 million telecommunications center.

“You have to offer the right services at the right place,” says Marc Onetto, Solectron executive vice president, worldwide operations. “We offer complete, finished, tested, ready-to-ship service to customers. Guadalajara offers everything we do.”

Making that commitment to Mexico, though, meant first looking past the country’s higher labor costs, which have historically driven manufacturers’ decision-making for decades. Onetto describes the typical itinerary chasing low-wage workers from the United States to Mexico, Mexico to Malaysia, and Malaysia to China. “These people will finish someday somewhere in external Mongolia.”

But in the high-tech sector, where market responsiveness makes or breaks balance sheets, demand is a perishable commodity measured in months. “If you miss the window,” says Onetto, “you can be very much penalized in terms of market share.”

The solution devised by Solectron to this dilemma—labor cost vs. market response—is a production system combining the Toyota model of lean manufacturing—no waste, zero defects—with the rigors of Six Sigma quality control. “Because we use people in a very efficient way, our labor costs go down,” Onetto says. “Therefore, the price advantage that China could have on Mexico goes down. That’s why we’re strongly committed to Mexico.

Less waste, you win

Lean Six Sigma manufacturing focuses less on each worker’s wage and more on the value they produce for end customers. “Traditional production worldwide starts at the front of the line and finishes at the end of the line,” explains Roberto Hernandez, Solectron Guadalajara’s general manager. His plant reverses that flow—‘pulling’ materials from the end to the beginning. Solectron starts with “the supermarket,” a small warehouse of finished products from which the company fills orders. As each item leaves the supermarket, word travels backwards to the production line to manufacture another model, “you replace what the customer purchased.”

What’s the significance of this?

“Traditional manufacturing relies on forecasting,” Hernandez says. “Forecasts are always wrong. Visit any [traditional] manufacturing plant and you see not what the market needs, but what the forecast said. If they need to produce more or less, they run overtime or turn down the line. Customers don’t get what they need until the end of the month.”

Solectron, by contrast, puts its Guadalajara site on pull directly from U.S. customers. “Rather than a forecast,” Marc Onetto explains, “we respond to the market demand.” He gives an example of the agility. Say a customer calls at 8:00 a.m. to say Onetto’s producing Product A, but Product B is what’s selling. “At the end of the day, we have a truck full of that product heading toward the border.”

Three years ago, when much of Solectron’s manufacturing was based in China, such speed and responsiveness would have been unthinkable. Back then, Solectron plants took twenty to twenty-five days to change what they manufactured—plus five more days to ship from China. “Now we have a plant that can turn around in less than a day,” Onetto says. “We can offer customers a two-day response time. The best China plant can only offer seven days. Mexico is suddenly three times faster.”

Setups like the supermarket work only when a production line reacts to an order of magnitude more quickly than the norm in fulfilling new orders. A standard manufacturer requires 12 and 20 hours to change a line to produce a new model, Hernandez says. He expects his team to take 10 to 15 minutes. “In this way, you can change the production line depending on the pull of the supermarket.”

Getting to lean, he says, requires a sustained, often unpleasant, company-wide self-examination. It was 1948, after all, when a Japanese automotive upstart introduced the world to lean manufacturing. “Toyota showed the Detroit guys how to do it 25 years ago and they still haven’t done it,” Onetto says. “It’s so hard to do, it’s a sustainable differentiator.”

Craig London agrees. “All players in our marketplace are struggling to say our value proposition compared to others,” he says. “All of us have a global footprint. Quality would be shared by all of us to some degree. We pay the same labor rate as our competitors do in China, Europe, and the United States. Our value proposition is efficiencies and optimizations of labor and manufacturing.”

The one variable that mattes most

The electronics manufacturing services sector knows from hard experience the consequences of being locking into a production system—and venue—that impedes market synchronicity.

In the eighties and early nineties, “footprint didn’t matter, it was basically brand trust,” says Craig London. “The main concern of our customers was, ‘Can I outsource my manufacturing and not screw up my brand and save costs?’” London says. “You couldn’t screw up giving contract manufacturing jobs to Solectron.”

At the end of the nineties, however, Solectron—like others in the sector—expanded, embarking on a series of acquisitions and stretching to approximately fifty sites—three-quarters of them manufacturing plants—across the globe. Such international acquisitions shifted Solectron’s manufacturing footprint from 70 percent high-labor-cost countries to 70 percent low-labor-cost countries. This new reach impressed Wall Street, but over time customer satisfaction suffered.

When the high-tech bubble burst in 2000 and 2001, “Solectron and many of our competitors and many of our customers were in very bad shape,” says Marc Onetto. “We were close to bankruptcy.” Share prices plunged from almost fifty dollars to fewer than five, including a one-day drop of 32 percent. Standard & Poor’s graded its debt status as junk.

“In order to change in business, you need a crisis,” Onetto summarizes. “[We] had the perfect storm.”

One of the key assumptions they were forced to reconsider was the “gut instinct” that told them (and many of their customers and competitors) to move manufacturing to countries with lower labor costs. Forced by circumstances to re-crunch the numbers, they found “case study after case study where solution A might be less in landed cost than solution B,” Cooper says, “but going into it the customer thought solution B was going to be the answer.”

True, China provided significant labor cost savings. But broader analysis of total landed cost showed that those labor savings came at the expense of increased inventory and returns, as well as a longer market response cycle. “Say I forecast incorrectly,” Cooper says. “I’ve lost my whole business equation.”

Solectron opted instead to move much of its build-to-order and configure-to-order business to a revamped Guadalajara plant. Prices dropped, performance rose, as did customer satisfaction.

Cooper is reluctant to recommend all manufacturers follow Solectron’s lead but he does note that for major U.S. firms with largely domestic customers, chances are that the right off-shore answer includes Mexico.

Close, closer, closest

Hard drives provide a perfect illustration of the other factors besides labor cost that need to be taken into consideration in siting a facility. Manufacturers of low-budget consumer drives site in China, then ship around the globe. More popular storage devices, like portable USB drives, with only a one-week lead time on U.S. orders, by contrast, might best be made entirely in Mexico.

But change the model to overnight order time, and even Mexico may ultimately prove too costly. In this instance, the ‘new’ lean pull-driven supermarket model dictates that a Texas plant should take over final assembly, testing, and shipping. Same thing for specialized storage systems for data-swamped corporations that need to be assembled, sequenced, tested, and shipped entirely in the United States.

When an industrial product manufacturer came to Solectron convinced it had to move shop from Oregon to Guadalajara, Cooper’s analysis revealed that low-wage labor would cut manufacturing costs seven percent—but higher transportation bills would far outweigh any gains. “Their customers were all in the U.S. and the rack these products were placed into—just the rack—weighed more than 2000 pounds,” Cooper says. “When you did the math, the weight of this product made it more expensive to get it to their customer if we made it in Guadalajara than if we made it Oregon.”

When Dell Computer, hardly an outsourcing laggard, opened a new plant in North Carolina, Craig London wasn’t surprised. “China consumption is growing, but most [Chinese] factories are manufacturing for export to Europe or the United States,” he says. “Dell Computer is located in the United States and [that’s where] sales predominate.”

Can manufacturers afford to scorn China? Of course not—nor should they. Savvy firms hope to expand manufacturing in China—especially in products where low labor costs matter most. But for others, like Solectron, the biggest reason for going to China may not be outsourcing but, as Onetto says, “For the booming domestic market.” WT

Sidebar:
Made in Mexico

In the 1980s and early 1990s, Mexico’s economy transformed from a deeply protectionist, state-controlled system to a largely open and less regulated “developing market.” Before 1990, for example, it was very difficult for foreigners to own property. At the time of the North America Free Trade Agreement signing, by contrast, laws had changed to permit up to 100 percent foreign ownership in many industries, including industrial developments and cross-border cargo transport.

Now, net flows of foreign direct investments to Mexico are among the highest in Latin America. Manufacturers—the vast majority American—comprise as much as two-thirds of that total. Mexican labor wages may double those in China, but “nearshoring” trucks crossing the border take as little as a day to reach U.S. customers at one-third to one-fifth the Chinese transport cost.

Led by Mexico, Central American infrastructure has raced to keep pace with Asia. Late last month, for example, the Mexico Leadership Forum showcased fifteen current growth-minded projects, together worth $7 billion, from a world-class multimodal port in Guadalajara to a multi-country oil refinery, gas pipeline, and thermoelectric plant. Although the big-three U.S. automakers were the American manufacturers to site plants in Mexico, today their multi-billion-dollar investments are but fraction of a $10-to-20 billion yearly total. Food products, soft drinks, tobacco, iron and steel, electrical machinery and equipment, and electronic appliances are all produced by foreign manufacturers. Other foreign-led sectors include chemicals, plastics, pharmaceuticals, soaps, detergents and cosmetics.

Among those investors are washing machine maker Whirlpool, producing inexpensive, front-loading machines at a complex in Monterrey, close to a concentration of Mexican parts supplier. The Juarez plant of Toyota supplier Delphi Thermal & Interior beat out some 500 North American competitors to win the automaker’s 2005 award for electronics quality. Drug maker Schering-Plough Pharmaceuticals this February opened a new 100,000-square-foot, $50 million manufacturing facility in Xochimilco.

Though an estimated 85,000 industrial jobs left Mexico for China between 2000 and 2004, in categories as diverse as table sugar and television sets, double-digit percentages of the goods Americans buy are still made south of the border.

Jeremy N. Smith

05.09.2007 Brazil is now the sixth largest market in the world for cellular phones (article in Portuguese)

Brasil Já é o sexto maior do mundo em celulares

Por Jamil Chade

Vivo: Smartphones to grow 50% to 300k handsets by end-2007

05.09.2007

Brazil is now the sixth largest market in the world for cellular phones (article in Portuguese)