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The Cabling System Value Chain

In the cabling industry's value chain model, all of the players must work together to achieve success.There has been much discussion recently about cabling performance, testing manufacturer's marketed...


April 1, 2002  


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In the cabling industry’s value chain model, all of the players must work together to achieve success.

There has been much discussion recently about cabling performance, testing manufacturer’s marketed claims, bit error rates and so on. While this is essential, testing beyond a certain level of standard-compliant performance may not be necessary, as the standards level of compliance will achieve the system’s overall performance objectives.

This is similar to the CPU MHz wars going on in the computer industry. In this realm, CPU manufacturers market different performance parameters for CPU speed to obtain a higher numeric speed rating. Eventually, when the consumer can perform applications on any CPU, the speed rating becomes less important and the focus moves to the application and “what can you do” with it. This is symptomatic of products undergoing ‘commodification’ and of manufacturers’ attempts to distinguish themselves through marketing-derived performance claims.

WE’RE NO DIFFERENT

The cabling industry is no different, as we continually see various non-standards-based performance claims in attempts to differentiate competitive product lines. Although cabling system performance is important, and product commodification in our industry may not yet be present, the cabling system will eventually offer standards-based, high-capacity performance. And, just as in the computer industry, the numeric performance criteria will become less important than the network application.

This may or may not occur with Category 6 cabling where standards-based 1 Gbps desktop connectivity can be attained over standards compliant Category 6 cabling. It may occur later with a higher performance level such as 10 Gbps desktop connectivity after another product evolution. Regardless, a performance plateau will eventually emerge whereby commodity products will achieve performance for the reasonable life cycle of the cabling system and the subsequent focus will be on “what you can do” with the system.

“What you can do” with the cabling system is a function of the process involved in putting the system together and maintaining it. This process typically involves a number of different players; it can be described as a value chain in which each link provides added value to the system and is essential to a project’s success.

THE VARIOUS LINKS

The players — or links — in the value chain model are as follows:

Manufacturer

Distributor

Contractor

Consultant

End User

The manufacturer provides products. Yet, in a commodity market where product performance becomes indistinguishable, the real value added by the manufacturer is through its system certification program, the method of product availability through distribution, and the method of installation through certified contractors.

The distributor provides a means to regionally supply products to local contractors and ensure timely availability of products to meet project timeframes and the immediate availability of products for MAC (moves/adds/changes) work. Additionally, the distributor provides valuable product information and training.

The contractor installs the product in conformance with the manufacturer’s requirements to ensure that the installed product meets the claimed performance and certifies the installation for said performance. The contractor typically installs to a consultant’s design that defines the parameters of the cabling system.

The consultant provides vendor-neutral information to the end user and endeavours to design a system that will meet both current and future end user requirements over the life cycle of the cabling system. The design involves the definition of a process for ongoing maintenance and MAC work. This design can be competitively bid to qualified contractors.

The end user provides the system requirements and manages the process for ongoing maintenance of the system. The end user works with the consultant to define the system parameters and processes for ongoing maintenance.

OBTAINING VALUE

In a highly competitive market, players are continually trying to increase their market share. One way to do this is by representing multiple links in the above chain. However, maximum value is only achieved when each of the above is independent, providing unbiased ‘best of breed’ service to the link without external influences or dependencies to adjacent links. When multiple links are represented by a single party, conflicts of interest are bound to arise.

Even though product commodification will eventually occur, let’s hope the process and integrity of the value chain is maintained to ensure that value is retained in the overall system and that the system itself does not become the commodity.

Zdravko Crne, P.Eng, RCDD/LAN Specialist, is a Senior Consultant and VP, Communications at Mulvey & Banani International Inc. in Toronto and a member of Cabling Systems’ Editorial Advisory Board.


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