How much time did you spend on choosing your last phone? Were you satisfied with the features it offered? Did you want the ‘x' feature of phone 1 and ‘y' feature of phone 2 together.  zzzPhone has come to your rescue!

"zzz" in Chinese means "exclusive". And special it is, for you can go online & select the features you want. With manufacturers like Nokia releasing over 40 new models every year catering to varied segments, nothing is as customized as your own phone. The business model is very similar to Dell, as stated in the company website¹.

The website offers an easy way to select the features you want, and pay for it. But behind the scenes is an efficient supply chain working like a clock work. "zzzPhone" has its assembly plant located near Shenzhen, China- where nearly 90% of the world's cell phones are manufactured, such as Motorola, Nokia, and Palm. It promises a lead time of less than 6 weeks. "This allows us to secure unbeatable pricing while providing individually customized phones built from the same components used by the world's leading brands, and shipped directly to our customers with no middlemen." says the company website.

The traditional supply chain which engaged various distribution channels and retailers is changing. Focus is being shifted to have as many less players as possible and integrating them seamlessly.

Figure 1: Traditional SCM

The new Paradigm in SCM is to eliminate the middlemen and get the products directly from manufacturers to customers. The "customer pull" completely takes over to allow them flexibility in what, which and how they want it. The company has also come out with an interesting delivery model, wherein, the e-commerce sites can use the API² developed by the zzzPhone. The delivery is completely handled by the company, and the site gets a commission to simply direct their existing customer base, to zzzPhone website.

The challenge for zzzPhone is how it manages its suppliers. Dell is looking at virtual integration whereby the lines are blurred, and there is a real time information flow between the various components of the supply chain. zzzPhone being located in the heart of Chinese electronics will have to develop a long standing relationship with its suppliers. The demand for mobile phones is varied depending on the months as well as the geography in which it is being launched. With low volumes (sales) in the initial stage, the cost of producing will be high. Also, the customer feedback for its first sales is critical for internet based model to be successful.

If people, like their phone to be different, something which is unique to them, something which they can personalize, something which they can show off, then this is a great opportunity to tap in. And all this is made possible through supply chain innovation!

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1 http://www.zzzphone.com

2 application programming interface (API)

Comments (1)

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written by Ameya Mhatre, 26 February, 2008

Great Article
Continue the good work

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