Professional Profile: Jose Mejia, President, Lucent Technologies, Bell Labs Innovations
Staff -- Purchasing, 2/19/2004 2:00:00 AM
Title: President, Lucent Technologies Supply Chain Networks, Murray Hill, N.J.
Previous Positions: Mejia spent seven years with Ford Motor Co., where he played a pivotal role in implementing Ford 2000, an initiative that focused on reengineering the company's worldwide manufacturing, supply chain management and order-to-delivery processes. He was also involved in creation of Total Cost Management, which generated over $1 billion in savings for Ford the first year.
In 1996, he joined Bay Networks as vice president of component engineering, supplier management, and external manufacturing. Following that, he became vice president of external manufacturing at Nortel Networks, where he was involved in the development and initial implementation of a completely leveraged model for the company's entire manufacturing operation.
Responsibilities: Lucent's Supply Chain Networks organization manages all design chain engineering, margin realization, procurement, customer delivery and program management organizations, manufacturing, logistics and distribution operations for Lucent Technologies. Since joining Lucent in 1999, Mejia has been leading the implementation of a supply chain vision and strategy that covers the end-to-end provisioning of solutions to Lucent's global customer base.
In January 2001, Mejia took on the additional responsibility of integrating the supply chain and manufacturing operations into a complete Supply Chain Networks group, as well as moving the company from a vertical manufacturing environment to a virtual one.
In his current role, he is responsible for the executive management and oversight of supplier and supply chain engineering and management, product engineering, test and component engineering, procurement, manufacturing, logistics and distribution, outsourcing, and contract manufacturing efforts. He also has responsibility for the company's Customer Delivery Organization (CDO), which includes all project management resources worldwide, in addition to the company's Global Quality Office.
"We have worked to completely reshape, recreate, and turn the company around in recent years," explains Mejia. "For example, we have created a supply chain that connects activities that are usually perceived as being part of a supply chain, in addition to a lot of activities that are not typically part of a supply chain."
Traditional activities include purchasing, manufacturing, logistics, transportation, and warehousing. "What we have added are activities directly linked to customers, such as contract management and selling, customer intimacy teams, program management," he reports. "We also have all of the engineering activities, including those that are typically found in R&D."
Results: "Our organization is also responsible for driving margins at the corporate level," continues Mejia. Some numbers: Overall, Lucent Technologies realized a 25-point improvement in gross margins from the first quarter of fiscal 2001 (16%) to the first fiscal quarter of 2004 (41%); reduced quarterly operating expenses by almost 80% (from $2.9 billion to about $600 million); reduced supplier financing commitments by 94% (from $7.5 billion to $400 million); made an 81% improvement in cash usage (from $1.3 billion to under $300 million); and improved inventory turns from 2.3 to 7.8. "The Supply Chain Networks organization played a major role in these achievements, and operational improvements are now flowing to the bottom line."
Keys to success: What does it take to play a key role in the transformation of a company like Lucent? Mejia's first recommendation: "Have a passion for winning in the marketplace and utilizing your supply chain as a core competency for doing so," he emphasizes. He believes the key has been stepping outside the silo of purchasing and thinking about what he does in terms of what the real affect of his organization is on the company, the company's shareholders, its people, and its customers. "Don't think of yourself as a procurement person," he points out. "Doing so only limits your possibilities." Mejia, for example, has become involved in selling, meeting with customers on a regular basis. "I am also involved in the development and design of new products and services," he adds.
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