To succeed, electronics manufacturers need to stay ahead of quickly accelerating technology trends. To find out how this acceleration in high-tech manufacturing is affecting TE Connectivity's supply chain planning, we interviewed Jim McDonald, vice president, supply chain for TE Connectivity. McDonald shared his observations on his company's supply chain challenges and offered advice on what he thinks is important to building an efficient supply chain network today.
vice president, supply chain
EBN: There is a significant acceleration in manufacturing technology which your company's chairman and CEO, Thomas J. Lynch, mentioned in a recent interview with PwC. Lynch said smarter robots, advancement in sensors, connectivity, and 3-D printing are examples of this acceleration in high-tech manufacturing. What impact does faster manufacturing cycles have on your company's supply chain planning? And how has this acceleration changed supply chain planning over the years?
JM: Maybe 20 years ago, you were handed a product and product management would tell you, 'This is ready to go to market, now will you please go develop a distribution strategy and a procurement strategy? And, by the way, we're going to need some machines. Can you go and buy them?' A lot more today has to happen up-front simultaneously with the development of the product because of the speed at which new products are being developed. Our involvement from a supply chain perspective is key when you think about early supplier involvement or logistics network design. Today, supply chain planning has to be involved up-front in the actual product development process, so having supply chain partners that can work on advanced product development can be a differentiator for a business.
EBN: How does your supply chain cope with TE Connectivity's decision to sets a three-generation technology road map for each business, even if a product isn't made in five to ten years?
JM: When you think about technology roadmaps, the production operations end of that is just as critical and important as it relates to making sure that along with the product design you've got the right infrastructure in place to deliver the product. Technology roadmaps will take you to different markets and new places, and take you to an even higher level of relationships with suppliers who are key to working with you on advanced parts development. We are not a company that is totally vertically integrated so we have a great dependence on suppliers who have a specialty in resins, in metal alloys, electrical components, etc. Having those partnerships with suppliers who are highly skilled in what they do, and working with them on designs is part of our role in the supply chain. We want to bring those relationships to our advanced product development processes.
EBN: TE Connectivity's supply chain network is expanding. You've just opened a new facility in Hermosillo, Mexico to support your automotive and industrial business units. You have manufacturing and distribution operations in Asia, Europe and North America. What advice would you give to other supply chain managers with an elongated supply chains like yours? How they can manage their supply chain network better?
JM: Our supply chain is only as good as the information that we are willing to share to help our suppliers perform better. We do that by giving our suppliers a longer-term forecast and we include them in our strategies around localization, material replenishment and distribution. Our supplier portals also give our suppliers visibility as to what our needs are. We are striving to do a lot more as it relates to giving our partners the information they need to be better suppliers to us. You really do yourself an injustice if you're not informing your supplier in a transparent manner on those big decisions. That's one tip I would give to other supply chain managers – provide better transparency with respect to your requirements, your production schedules and your long-term forecasts.
EBN: You say you've added technology tools to help you gain better visibility across the supply chain. What advice would you give to other supply chain managers about using technology as a collaboration tool?
JM: We are improving our supplier portals and enhancing our communication technology, but here's another tip – you can't do strategy through a portal. You have to have those face-to-face meetings, build relationships and build the trust that allows you to talk about topics such as advance product strategy, advanced manufacturing strategy or for a supplier to talk to us about their advanced strategies in material development. These aren't portal generated conversations. They are extended conversations that involve face-to-face meetings conducted over a period of time.