The velocity of the electronics business is increasing exponentially and the supply chain is getting more complex. Having the right supply chain strategy can make the difference between success and failure.
We sat down with Tim Kolbus, vice president of Global Logistics Services at Arrow Electronics to find out his thoughts on supply chain strategy—and to hear about how Arrow is tackling this important topic, from hiring the right people to choosing the right technologies. We also asked him to pull out his crystal ball and let us know what he sees for the future of the global electronics supply chain.
Kolbus currently oversees global distribution, transportation, and trade compliance for Arrow with operations-related expense management. In this role, he is responsible for Arrow's distribution centers in the Americas, EMEA, and Asia-Pacific. Kolbus has held numerous positions with increasing levels of responsibility during his 19-year career at Arrow, including distribution center general manager, director of distribution in the Americas, vice president of Americas operations and logistics, global manager of process improvements and the first director of Arrow's global reverse logistics business.
EBN: What are the biggest supply chain challenges you see in today's electronics supply chain?
Kolbus: Supply chains are growing increasingly complex, and effectively managing that complexity is a huge challenge for any organization. That's why at Arrow we're seeing more and more of our customers coming to us for supply chain support services—from warehouse management and forecasting to risk assessments and product obsolescence. And, in some cases, customers are even turning the management of their entire logistics operation over to us.
Time-to-market is one of the biggest supply chain challenges in electronics. Customers look to Arrow to enable them to focus on manufacturing a great product instead of worrying about how to get product from point A to point B.
Arrow essentially spent the last 80 years building an unparalleled global logistics operation so our customers and suppliers wouldn't have to. We operate nearly four million square feet of warehouse space in 52 countries and territories, and our inventory-management processes achieve 99.5 percent or better accuracy. We provide a full suite of customized supply chain services that are specifically designed to help our customers do more with less and get their products to market faster.
EBN: What are the main operational and compliance-related challenges you see in supply chain management?
Kolbus: Removing complexity and mitigating supply chain risk are two of the biggest opportunities in any supply chain. At Arrow, we strive to make complex things simple, which is no easy feat. That starts with understanding our customers' unique logistics challenges so we can provide tailored services that improve the efficiency, flexibility, scalability and reliability of their supply chain operations.
I would also say that ever-evolving restrictions and reporting requirements from both the various countries we operate in and the large OEMs we work with certainly adds a level of complexity to our global operations. It's why Arrow has dedicated specialists who manage specific aspects of our global trade management and compliance programs—they become experts on a specific country and region-specific regulations, which makes them more valuable to our customers and better equipped to proactively identify future compliance challenges.
EBN: What steps can an organization take to be more strategic in addressing supply chain risk?
Kolbus: There is no one-size-fits-all solution to supply chain management. Understanding a customer's core competencies and their logistics pain points is definitely a critical first step.
The most successful supply chains are also those that are constantly measuring and analyzing risk to continuously improve the strength and flexibility of their operations. I was shocked to read a recent Deloitte Consulting study that found while supply chain disruptions have become more costly to organizations over the last three years, only 45% of global executives felt their supply chain risk management programs were only somewhat effective or not effective at all.
Arrow regularly assesses its risk profile and audits its entire supply chain. We want to know exactly where our greatest vulnerabilities lie so we can prevent a disruption before it starts. That's good for our customers, it's good for our suppliers and it's good for our own bottom line.
EBN: What strategies is your organization using to attract and retain supply chain professionals?
Kolbus: At Arrow, we recognize the need to cultivate a strong talent pipeline in order to remain competitive, which is why we are committed to building the top tech and business internship program in Colorado [where the company is headquartered]. We're looking to discover the next generation of builders, designers, engineers and supply chain management professionals who will help guide innovation forward for Arrow's customers and suppliers. Right now, nearly 90 percent of our eligible interns—including supply-chain management professionals—are placed in full-time Arrow jobs at the end of immersive-learning internships.
Next week, Arrow executives and senior university leaders in Colorado are actually meeting to discuss additional ways that Arrow can engage local students on areas like supply chain management that are relevant to our business. We know students are looking for practical, hands-on experiences where they can apply what they've learned in the classroom, and we're looking for innovative ways to tap into that enthusiasm.
EBN: How has the role of technology (big data, analytics, etc.) evolved in your supply chain management? How do you see that changing?
Kolbus: I find the “Internet of Things” (IoT) particularly exciting because it's going to create a smarter supply chain that will connect people, products and services in ways you and I never before thought possible. Arrow is already on the forefront of IoT—helping our customers integrate edge-to-enterprise connected industrial solutions—so, we are extremely well-positioned to integrate smart, connected technologies into our own operations, including supply chain and logistics management. In fact, Arrow already provides its customers and suppliers with real-time visibility into their supply chain operations, so they can rest assured the right part will get to the right place at the right time.