Technicolor leans on lessons to strengthen supply chains during pandemic

Past is prologue, as the saying goes. And the way Technicolor has used past lessons about its supply chains has helped to set up the company to get a handle on today's even more difficult situation with COVID-19.

Before COVID-19 entered the picture, Technicolor, a key supplier of set-top boxes, cable modems and gateways to service providers worldwide, had already been grappling with supply chain disruptions for a couple of years, according to Eric Rutter, president of the North American cable sector for Technicolor.

Technicolor, for example, has dealt with a surge in memory prices and a shortage of multilayer ceramic capacitors (MLCCs) that wreaked temporary havoc on its supply chains over the last couple of years. Additionally, the company was forced to mitigate tariffs sparked by the US-China trade war. Combined, these events required Technicolor to execute on-the-spot buying and to ramp up its coordination with manufacturers on optimizing supply chain continuity.

While those events don't correlate directly to the size, scope and sociopolitical implications of the current COVID-19 crisis, they still helped to prepare Technicolor for the present situation, Rutter said.

Technicolor supplies set-tops and gateways to cable operators around the world, including this Panoramic-branded DOCSIS 3.1-powered gateway for Cox Communications.

According to Rutter, a sizable piece of that preparation stems from the company's adherence to a principle called C.A.R.T, an acronym for continuity (adding degrees of redundancy), agility (having access to multiple options), resilience (rebuilding and restarting operations as necessary) and transparency (telling it like it is, even if customers and internal higher-ups won't like to hear it).

"This has helped us to prepare for this COVID-19 situation and, more importantly, how we have reacted and been proactive with our customers in communication with what the associated supply chain risks are," Rutter said.

Technicolor formed a crisis management team in January directly related to the COVID-19 situation, based on the early signs it saw coming out of China and how they might affect the company. That meant monitoring the Chinese workforce recovery, tracking the component flow, and staying in ongoing, direct contact with people on-site and with logistical vendors (ocean, air, trucking, etc.) to fully understand where components were in their routes to factories.

On the transparency side, that likewise meant reporting to customers where things stood on a weekly or sometimes twice weekly basis, or even more often.

While Technicolor began to see a full recovery emerge in China about 60 days after shutdowns there, it is now starting to see similar COVID-19 issues crop up in other areas that had helped to bridge the gap, such as Vietnam, Malaysia, the Philippines and Thailand. But the combined effort has put Technicolor in position to weather the storm, Rutter said.

"We see a full third-quarter recovery for the supply that we were impacted by in the second quarter," he noted. "We're really trying to manage this on a full-year view."

For more about how Technicolor has managed to maintain supply chain continuity during the COVID-19 crisis and how the supplier expects service providers to alter or enhance their policies to ensure a consistent flow of devices during times of crisis, please see this story in Light Reading: How Technicolor is managing and maintaining the supply chain in the COVID-19 crisis.)

— Jeff Baumgartner, Senior Editor, Light Reading, special to Broadband World News