SCDigest Editorial Staff
You may not have heard of Vizio, Inc., but it is the fastest growing manufacturer of flat panel TVs in a field crowded with giants such as Sony, Samsung and Panasonic.
Headquartered in California, the company has grown rapidly to over $2 billion in annual sales from selling just one thing - a line of flat panel LCD televisions – while unlike most of its rivals- not actually manufacturing any products. It sales are up five-fold from 2005.
How it got there, and the supply chain strategy it’s using, is interesting.
Founder and CEO William Wang is a native of Taiwan who worked in the computer monitor industry. He has used direct financial links with suppliers of often hard to source components to, at least for now, give the company some competitive advantage.
Many people talk about how today it is “supply chain versus supply chain” competition – Vizio is living it.
According to a story in the Wall Street Journal, as Vizio first penetrated the US retail market through a deal with Costco, it soon found itself facing both supply and capital constraints.
Wang made a deal with Taiwanese contract manufacturer AmTran Technology that infused capital into the firm and, ultimately, gave AmTran 23% of Vizio.
“The arrangement gets Vizio preferential treatment. AmTran sometimes swallows shipping costs and pushes component suppliers to ensure Vizio's products are high quality and on time,” the Wall Street Journal reports. “AmTran now gets about 80% of its revenue from Vizio. In turn, Vizio sources as many as 85% of its TVs from AmTran.”
Wang says the relationship fosters true collaboration, versus the “big squeeze” most high tech manufacturers place on suppliers.
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In a market known for product shortages, for now the strategy seems to be working for Vizio.
