JOHN SCHOFIELD, AFC

I'm done with reorganizing,” said John Schofield, chairman, president and CEO of access equipment vendor Advanced Fibre Communications. No more layoffs, no more consolidating facilities or integrating acquisitions. Last year, AFC even restructured its entire supply chain — switching or eliminating some suppliers and renegotiating contracts with others — to adapt to its customers' new habit of what Schofield calls “just-in-time” purchasing.

“Carriers are saying they don't want to hold the inventory. They want the vendors to do that,” Schofield said. “So they're pressuring us and other vendors into shorter lead times.” One large carrier that typically required products to be shipped within a month of the order, for example, started requiring AFC to ship in seven to 10 days, he said.

Some might say that Schofield has earned the right to take a breather. AFC turned its 16% share of the 2001 digital loop carrier (DLC) market in to a 25% share in 2002. Schofield won't take all the credit for the advance, attributing part of it to his competitors: Nortel Networks pulled back from the sector, giving up 3% of the market. And Marconi's financial troubles led it to lose 7% the pie.

Today, AFC's presence in the DLC market, and in RBOC networks, is second only to Alcatel, which specializes in the high-density parts of Verizon Communications' and SBC Communications' networks. Meanwhile, AFC claims to be more cost-effective than Alcatel in the low-density networks of second- and third-tier markets. As other vendors get squeezed out, Schofield expects AFC and Alcatel to spend more time battling each other for the territory in between.

“We've moved up the food chain,” Schofield said. “They've attempted to move down.”

Part of Schofield's strategy to eat into Alcatel's food chain is to out-innovate them with a greater focus on research and development. AFC will spend 18% of its revenue this year and next. Perhaps as a result of that emphasis, AFC is unveiling a bold initiative at Supercomm: a triple-play platform — voice, data and video — marketed initially for greenfield fiber deployment. It will allow carriers of all stripes to migrate to fiber to the home without a forklift upgrade.

Next year, Schofield wants his next-generation access platform, Telliant — the pearl of AFC's AccessLan acquisition — to bring in more than the 5% of AFC's revenue it currently pulls in from small rural telcos. In the meantime, he'll focus on driving into as many SBC and Verizon remote terminals as possible.

So much for that breather.