The PC market was shaken up this week as a leading researcher named Lenovo Group Ltd. (Hong Kong: 992) the world's top PC maker. It's a big deal, but it's not entirely surprising in light of Hewlett-Packard's inability to right itself. (See: Saving a 'Fundamentally Flawed' Business.)
Gartner reported that Lenovo had a 15.7 percent share of the PC market in the third quarter, when it shipped 13.77 million units. HP, the perennial industry leader, had a 15.5 percent share.
Of course, the PC market is shrinking, so Lenovo's achievement may be less impressive than it would have been five years ago. But no matter the fate of PCs (which I'm not willing to declare extinct), Lenovo is innovating its supply chain in ways that may be giving it an edge. Let's not forget -- that's what we said 10 years ago about Dell, now the No. 3 PC maker.
Lenovo is using the cloud as a supply chain collaboration platform, as Nicole Lewis writes in The Cloud & the Supply Chain: A Match Made in Heaven. (A whitepaper on the process is available at E2open.) The results are pretty impressive.
In addition, Lenovo is innovating on the backend. It's using Jabil Global Services and UPS Logistics to manage two segments of its after-market service and repair operations. (See: Recovering Lost Profits Through Reverse Logistics.) Although Lenovo is outsourcing some of its supply chain management, it's also breaking from the PC pack by leaning toward a vertically integrated manufacturing model. (See: Is Outsourcing Losing Its Appeal?)
Although the PC market is shrinking, it's still a pretty good proving ground for supply chain innovation. HP changed the game in the late 1980s by moving toward a demand-driven supply chain. Dell adopted the BTO model in the early 1990s. Lenovo is an early example of effective use of the cloud. Like automakers, PC makers have been under varying pressures over time to make their products better, cheaper, faster to market, smaller, more configurable, and now easier to dispose of. Lenovo is proving there's still a lot of room for inspiration. Although a supply chain may not make or break a company, it clearly remains a competitive weapon.