Avnet's Gerry Fay: Supply Chain Silos Challenge the Channel

Gerry Fay, who will take the helm as Avnet Inc. (NYSE: AVT)'s chief global logistics and operations officer on July 4, says that even as the global electronics industry gets smaller, it doesn't get any easier.

"The world is getting smaller, and the supply chain is becoming more interconnected, and our job is making sure we are making the investments we need," Fay told me in a phone interview. "Part of my role is to continually look forward to make sure we are leveraging our infrastructure from both a regional and global perspective."

Fay, most recently head of Avnet's Velocity global supply chain practice, has been named to succeed retiring President of Avnet Logistics Jim Smith. Smith has headed Avnet's logistics operations since 2000 and is the chief architect of Avnet's global network of warehouses and value-added service centers.

"The one thing we need to keep in mind as we go forward is the customer," Fay says. "Everything we look at has to be linked to the customer. We need to be focused on providing value. We have 100,000 customers ranging in size from very small to very large, and we have the infrastructure to support that customer base. But we always have to be looking at strategies to add value for the customer, and that is where finding the right service mix is key."

Since the June 13 announcement of Fay's promotion, he has "been talking to people, reviewing strategies, and hitting the ground running. I want to use the change as a catalyst."

In terms of improving the existing supply chain model, Fay says communication and collaboration continue to be crucial. "I think [finding improvement] goes back to the way the supply chain ecosystem has developed. The supply chain is still very siloed. From the component maker to the EMS provider to the ODMs and OEMs, the supply chain operates as a number of independent silos. It used to be the OEM would drive demand down the supply chain and the supply chain would respond. Now, the OEM expects us to sense their demand from the end customer and move that [demand] back [through the channel]. There are always ways to improve -- better equipment, more intervention -- and we are always looking for ways to better engage with our suppliers' suppliers and our customers' customers."

In general, Fay feels, the global supply chain continues to do a better job of managing its inventory. "I think since the crash of 2001, supply chain partners are doing a much better job of looking at inventory as an investment. In 2001, there was a lot of inventory in the channel, and I think since, everyone has done a much better job of exception-based supply chain management."

Fay will continue to lead Avnet Velocity and, according to Avnet, will assume executive responsibility for Avnet Logistics’ global warehousing, semiconductor programming, and integration center services.

"This isn't my first rodeo," Fay jokes. "I've worked in all of these roles before, and I expect to bring the benefits of that experience to the Avnet team."