said by JPL:said by Digger262 :
Yes, DTV had the foresight to do this and Verizon did not. I realize it's a problem to do it now. That's my point. The mistake was in the management decision originally.
I'm sorry but this makes no sense. DirecTV uses RCA, Philips, and Humax as its main suppliers for their boxes. Say one of these suppliers - say RCA - has production issues. You mean to tell me that DirecTV would be all fine and dandy on the supply of STBs? No, I don't think so. They're going to order so many from each supplier. Granted, going to multiple suppliers does give them some more flexibility longer term, but if one of their suppliers hits a snag, they have a shortage too. For short term issues (like what's happening with Motorola) having multiple suppliers really doesn't help. It would still take time for the other suppliers to ramp up production to meet the short-fall caused by the one supplier, and chances are they would still fall short.
Manufacturers don't run with gobs of spare capacity for production - that's wasteful. So they may be able to ramp up a little for a short period of time, but if one of their suppliers fell down on the job, they too would run into the same shortages that Verizon and other cable suppliers are hitting.
I have worked in manufacturing for 18 years, and this makes perfect sense. I've seen it work time and time again. Yes, it will not prevent shortages completely but it will significantly reduce the amount of time of the shortages. When entering into these contracts with suppliers, you specify a minimum and maximum quantity you will order from each. You then manage each supplier up to those maximums, trying to keep all 3(3 is optimal for reasons I won't enumerate here) close to but not at the maximum levels. If you approach those levels for a sustained time(depending on your algorithms) you either add a supplier or increase the maximums. It's all in the management. Unless you run into issues where a sudden and completely unexpected large spike in demand occurs, you can manange just fine. Verizon has failed to do this for whatever reason. But it IS a management mistake, of that I'm sure.
