In a bold move to counter global supply chain uncertainty, Mitel has announced a new manufacturing partnership with Gigaset, relocating production of its IP phones to Germany. The initiative is designed to shorten delivery lead times, improve quality control, and assure procurement teams of consistent device supply across Europe and beyond.
A Strategic Shift: From Design to German Manufacturing
Under the new arrangement, Mitel retains design and software ownership of its devices, while Gigaset’s Bocholt facility in North Rhine-Westphalia will act as the principal production hub. Output is estimated at around one million devices per year, primarily for European customers. By reshoring manufacturing, Mitel aims to reduce logistics risk, align with regulated standards, and preserve product integrity under “Made in Germany” engineering.
Martin Bitzinger, Mitel’s Senior Vice President of Product Management, commented:
“As global supply chains face increasing volatility, we are taking strategic, proactive steps to ensure quality and reliability for our customers.”
Ralf Lueb, Gigaset’s Senior Vice President of Global Sales & Marketing, echoed the sentiment, emphasising the move’s reflection of “quality, reliability and long-term planning security.”
Why This Move Matters to Procurement & Operations
- Reduced lead times & logistics exposure: Local European manufacturing eliminates long transoceanic supply routes and vulnerability to shipping disruptions.
- Regulatory compliance & origin standards: Manufacturing in Germany supports Trade Agreements Act (TAA) compliance, which is key for public sector and regulated buyers.
- Quality control & consistency: German automation and precision manufacturing provide tighter process control, fewer defects, and stronger warranty performance.
- Sustainability gains: Shorter transport, reduced packaging waste, and better waste management practices at the plant help mitigate Scope 3 emissions for customers.
- Single accountable OEM: With design and production under coordinated management, customers benefit from unified service, support, and SLAs across hardware lifecycles.
Chris Pennell, an industry analyst at Frost & Sullivan, described Mitel’s move as “a significant strategic shift that strengthens supply chain resilience and deepens its connection to European markets.”
Challenges & Considerations
While this restructuring is promising, it carries several important considerations:
- Transition & ramp-up risk: Carefully phasing out legacy supply lines while scaling production in Bocholt will test project management and supplier coordination.
- Cost structures & margins: European manufacturing is more expensive than offshore alternatives. How Mitel manages costs will be closely watched.
- Capacity scaling & flexibility: The facility must handle demand variability without overextending – both for high and low volume periods.
- Inventory & component sourcing: Even with assembly in Europe, some components must be imported. Mitel must secure resilient upstream supply.
- Customer adaptation: Some markets used to long lead times may need contract and forecasting adjustments to align with the new cadence.
What to Monitor Next
- The actual production and delivery metrics — whether target volumes are met
- Rate of defect, returns, and service stability after transition
- Impact on total landed cost for European customers
- Whether Mitel expands this manufacturing approach to other product lines or regions
- Broader industry response — whether others in telecom or hardware follow suit to reduce supply chain exposure
By shifting IP phone production to Gigaset’s German precision facility, Mitel is placing its bets on resilience, compliance, and customer confidence. In an era where supply chains buckle over disruption, this move signals a renewed emphasis on control, accountability, and smarter localization in manufacturing strategy.