WEBINAR TRANSCRIPT
JESIL PUJARA:
All right guys, let’s get started. Thanks everyone for joining today. For the webinar the webinar today is managing electronics supply chain post COVID-19. I’m your host, Jesil Pujara, today. And I will, I’ll get things kicked off and then we will start our speakers. So just to give a little bit of background we, as everybody knows, we have been in a very tough situation with the pandemic with COVID-19 right now.
It’s a lot of countries are in quarantine and slowly things are getting to the point where things are starting to open up. So some of the things that we have been seeing with our customers. As things start to open up, how do we, there’s a new word. It’s not going to be business as usual as it used to be.
So what are some of the things to keep in mind as, as businesses start to open up and especially focusing on the supply chain aspect of things? So with that in mind we, we decided to have this webinars to have that interactive discussion with our speakers and our audience. Before we get started some housekeeping.
We’ll hold the Q & and a question answers at the end of the webinar. So please, as, as the webinars is going on and you have questions that come up in mind, please start typing it in the Q and a button on the bottom of your screen. And then we’ll address those in the Q and a section. Second thing since a lot of us are working from home there’s always going to be noises and disruptions the background.
So we’ll keep everybody on mute during the course of the webinar. And in QA, we will unmute everybody so we can make it an interactive discussion. So with that, we will get started. We have two speakers today. We will start with our guest speaker, David Collins. David, if you could introduce yourself.
DAVID COLLINS:
Yeah, my name’s David Collins. I’m the CEO of China manufacturing consultants in China and also of manufacturing transformation group in north America and the rest of the world. And basically our job is to help set up factories. We build factories, we make them lean and we work an awful lot with the supply chain.
It’s an incredibly important aspect of of making a factory running.
JESIL PUJARA:
Great. Thank you, David today, Sandra, if you could introduce yourself thanks. Hi everyone.
JITHENDRA PALASAGARAM:
I’m founder and CEO for Part Analytics, a cloud-based cognitive sourcing and procurement platform for electronics. We serve both OEM customers as well as contract manufacturing companies, and we’re based in Milwaukee, Wisconsin.
JESIL PUJARA:
Great. Thank you, Jesil & Jithendra. All right. So I think just to kick it off David question to you with your manufacturing expertise, right. That as loud bounds are getting released slowly and people are starting to open up factories or thinking about opening up factories. What are some of the basic things to keep in mind?
Because it’s not going to be business as usual as it used to be for a lot of folks. Right? So. What are some of the things you are seeing with your customers and in your industry?
DAVID COLLINS:
Well, a couple of things, number one, is, will all your people make it back? Depending on how areas are locked down and what’s happening. Some states cities in, in, in, in the U S and in China, in particular, we do a lot of business. You know, the movement in between locations is not as easy as it used to be. So. The entire aspect of people.
And then of course, setting up the people, what are you going to do with them when they get there? How are you going to let them have lunch? How are you going to social distance for the people will you change how you set up the, the shifts? So people can be farther apart. If you’re doing some real close, especially in electronics manufacturing, where people are next to each other you’re going to have to worry about obviously masks, gloves, things like that with the people.
The second thing obviously is the supply chain. What parts of your supply chain will be open if they’re in an area of the world or an area of China, for example, It’s slower in getting back is, is some of your key suppliers, will they be open or not? And what can you do if they’re not opening, you can’t get the parts you need.
Would you start up then? Would you just use the inventory you currently have and hope they get started and can supply you? You’re going to have to get involved I think very directly with your down chain supply. First tier, second tier, third tier to see what’s happening and keep going to see really what’s going on and what you can do.
I think that’ll be very, very important.
JESIL PUJARA:
Yeah, Jithendra, I think with the supply chain with your focus in Part Analytics, focusing on tier two and lower components what are you seeing from, from some of the things that you are seeing with your customers?
JITHENDRA PALASAGARAM:
Yeah, that’s definitely been a area of focus even before COVID-19 a lot of the OEM companies and contract manufacturing companies are looking into digital transformation, getting better visibility through the supply chain, but now that’s kind of accelerated that effort.
Where, things are it’s really important to understand where your stuff is coming from. Whether it’s as a Tier 1, 2, 3, 4, all the way through the supply chain. So companies are looking at ways to get that information. The data is. Today, a lot of the companies, they have their data spread across multiple systems or different locations.
So trying to bring all of the data together into one place, having your single source of truth. So everyone has the same visibility into where your parts are coming from. What are the risks in the supply chain? How do you answer them early? So they can actually take an action and stop being.
JESIL PUJARA:
So just to kind of summarize the points you guys made. So first things first looking at the people, working in the factory, as David mentioned, making sure you have proper appropriate personal protective equipment or PPE in place such as masks, gloves, hand, sanitizer. Things like that: even how are you going to take the breaks? For, for the people working in the factory, are they going to sit together in the laundry room?
Keep their distance, things like that. So those are some great points from manufacturing point of view, and then general mentioned some things around supply chain, making sure that you understand where to what your inventory levels are, what your suppliers’ inventory levels are, where the parts coming from.
And proactively making sure that the supply chain is filled with the parts, otherwise opening the factories and not having enough parts. That is some of the issues we are seeing. So paying attention to that. So, great, great guys. Good inputs. David, you mentioned something around making sure that you know, around the safety of the workers and things like that.
What are you seeing in terms of processes like managing the shifts work? Because a lot of plans are you used to working single shifts or double shifts with a workstation layout, changing, increasing the space between the workstations and things like that. Are you seeing staggering work shifts and things like that? Some of the other changes that you are seeing in the factory.
DAVID COLLINS:
Yeah, it totally depends on what type of a factory it is and what they make. Some of the factories that make some items are able to stagger shifts, do things like I have one customer that’s using six and a half hour shifts. And then they’re going round the clock.
So they used to test and do the quality on the second shift. Now they’re doing the tests and quality on the third shift and the reason they’re doing six and a half hour shifts is to leave an hour in between each shift so that the. So that, that, that, that the rooms don’t get all clogged up with people, you know, the locker rooms and things like that.
But some factories can’t do that. Some factories are very linear. You know, you have to put it in this screw, then you have to put it in the next through, then the next screw and you, he can’t do that. So if that’s the case, you know, maybe if you have five or six lines doing the same thing, and you’re only working on one shift, maybe you bring in three lines.
So that again, the locker rooms aren’t so crowded, the cafeteria is aren’t. So. I mean, these are different items that you can work on, but it really, really depends. I came from the auto industry and then we’re also working in electronics in the two factories in the factories that I had, basically an automotive.
There’s no way you have to put the people right in line where they go, because each step of the way has to happen. And, and that’s similar with making most electronics, actually, you know, there’s not too many electronics factories that have. Mostly pretty, you know, systematic down the line, this step and this step, then this step, then this step.
So the only question you have is you have a lot of lines doing things, or maybe you can split those out, but otherwise not really. So that’ll be hard for most people, but I really think that if you do it right, if you put. Put the PPE in place. Again, I was managing a Foxconn factory during the H one N one in 2009 in Mexico.
And we were quite a big factory. We had 3000 employees and, and, and so and we had to do ships running 10 hour shifts, and we quite frankly make sure that everybody was clean. They wash their hands. We check the temperatures. We did all the things that you should do for health and safety. And in the end, we didn’t have any problems.
Nobody got sick, we were able to, to manage it and, and, and it kept going. So I really think people are going to have to do the same thing we did manage the, the lines did make the lunches a little bit different, things like that. We kept the locker rooms cleaner. We tried to stagger people coming in at one time and other cause we had 26 lines.
So we could, we could stagger the lines a little bit. Those are some of the things we did to make it happen. Obviously, the the management team was very involved. We put as many peoples who 10 working from home, but the manufacturing team had to be there and they were quite involved. If we kept people on the floor, we asked HR to be on the factory floor also to help monitor and things like that.
So we, we got some people out of the office also and got them on the factory floor to help monitor and do things. And with it all worked out quite. Okay, that’s great. Yeah. That’s some of the great point or so, so I think David, you mentioned in one of the points you mentioned about the management team and some of the teams working remotely as much as possible in the factories, more for only people who are needed to be there.
So you know, people are, people are used to, lot of in-person interaction in a lot of these factories and now things are changing. Where a lot of the people we remote especially like having a manufacturing expertise to kind of help guide to day-to-day problems. And especially like a lot of the factories and their management team, how quite a bit of distance between them.
So, how do you, how do you see those issues being addressed? How do you see some of the people addressing those issues? Well, I think things, certain, certain people with their systems, if you do it right, working remotely is fine and they can continue to work remotely from ever as far as I’m concerned. I think there’s too much utilization of office space.
In in manufacturing, as it is, you know, we build such big offices because we want our people to all be around us, but we don’t really need them. For example, like the purchasing people, if they know that they have to buy certain ass things at certain times, and, and this is well organized within the company and you have a strong planning system, you know, essentially what you have at that point in time is the ability to.
So let these people work from home. In Mexico, we did an awful lot of work with letting people work from home, just because a lot of the ladies who work for us had children and we weren’t going to lose them. And they were very intelligent people and very good. So instead of losing them, we set them up to work from home and it worked really, really well.
And then when H1N1 hit, there was no need to make too many changes, but some finance people can work from home. You know, even, even some of the engineering people. I mean with the way the computers work and everything goes right now, there’s a lot of our engineers that we allowed to work from home.
And then we would have the occasional meetings. We would set up conference rooms and the people would come in and meet like maybe once every two weeks, if their managers wanted something to be done. But you know, if you have really good KPIs and you really manage your systems, you’re quite capable of letting people work from home.
The fact that some manager has to watch somebody work on. That kind of tells me usually that you don’t know what those people really do for a living. What is their KPI and what should they get done for you on a daily basis? And if that KPI’s not so good. Yeah. You do need somebody to stand over them. But if your KPIs are really good you’ll know every day, if they did their job, Definitely.
JESIL PUJARA:
Yeah. So it sounds like there’s going to be lot more emphasis on having systems and processes and KPIs in place. So everybody’s kind of very clear on what needs to be done and what are the key issues to be worked on? So defining those systems and processes is becoming very critical, right?
DAVID COLLINS:
Yes. And the senior management team works very hard on that. It allows the senior management team, then more time to work on other things that will grow the business.
JESIL PUJARA:
So speaking of a business aspect of things, right there will be as, as the economy has started to / has slowed down considerably. Even as the factories open up, there will be some slowdown in business or in some cases, a lot of slowdown in business.
Which I think depends on the sector sectors as well. So Jithendra, from what you were seeing with their customers? How are some companies managing the cost pressures, especially with your focus on electronics in this.
JITHENDRA PALASAGARAM:
Yeah, that’s a great point. I, with as a company start opening up and looking at the demand for next couple of quarters or the next few quarters this has been Constable drop.
So companies are figuring out ways to manage costs to after the impact of reduced demand or top-line slowed down. So kind of some of the ways they can look into doing that is actually getting a better handle on the supply chain costs. They’re getting better visibility into, in terms of what they’re paying across the supply chain for materials or stuff down the supply chain, my lower tiers as well.
And. They, that it’s negotiating with existing suppliers and supply base are identifying potential additional sources to bring the costs down and actually looking at additional sources in terms of alternate components and things like the electronics that would drive some of the cost or attractions that.
So it’s more around getting better visibility in terms of what they’re paying today. It’s not the actions they can take around whether it’s negotiations driven savings witness with the suppliers are looking at potential opportunities for cost reduction through the next and other types.
JESIL PUJARA:
I think that brings, those are some really good points. So do identify some savings opportunities to manage the cost pressures either through better negotiations as well as also identifying lower cost alternates and getting those suppliers prepped up. So I think those are some great points, but those things take time.
So how do you see your customers working through some of those challenges? Are there things that they can work on right away versus some of the things that it can start working on now, but the benefits will come a little bit down the road. How do you see those prioritization of activity?
JITHENDRA PALASAGARAM:
Yeah, definitely.
I think if you look at the two buckets that we talked about, negotiation driven savings and the alternative and savings for shorter term, immediate wins, looking at negotiation savings, whether it’s actually harmonizing your data across the company. If you take an enterprise customer, a large company where the data is not in one place, actually getting better visible because of what they’re paying across different business units and our.
Some of the other customers call them price harmonization, making sure we’re getting the same place for all the parts that you’re buying through different channels are looking at opportunities to benchmark to the price that you’re paying towards the public price or what’s the, what other companies are.
So one of the things I would learn from those is actually giving them better visibility on how does your cost compared to what other companies are paying? So benchmarking compared to public price, harmonizing price across the company. So these are some other levers that they can leverage to drive immediate short-term savings.
And then more longer term would be the savings through alternate component. So more redesign of the product designed for. Things like that, that will drive which take time six months, nine months, but a higher ROI takes longer to implement, but a better cost savings from that.
JESIL PUJARA:
Yeah, it sounds like a longer term benefits through alternates requires some engineering work and as engineering capacity started go free up. It will be a great time to start compiling those lists. Projects where the users can see some good benefits.
So that’s, that’s a great point. David question to you, I think kind of speaking around those costs issues there will be, there will be some concerns around not having enough people in the factory in order to maintain the distance and things like that.
So are you seeing some, some changes where process automation is being discussed more now? And if you can talk a little bit about specific kinds of automations that you are seeing that your customers are focusing on.
DAVID COLLINS:
Sure. Automation is always helpful when it, when it comes to, you know, using people and things like that.
The kind of automation people are using obviously is robots. People don’t think about ERP and things like that as automation, but, you know, good ERP is good systems in place to be able to buy your, buy your parts and all that. That’s that’s automation also, because a lot of it can help you out a lot and can be synchronized right into your warehouse.
So, you know exactly what’s going through the warehouse. You would be amazed how many of the clients I go into have no idea what’s really in their warehouse. You know, you, you go see them, you talk about. They say they have ERP systems and things like that. And they go, oh, we don’t have anything in our warehouse.
That’s over three months old. And then you go, just do the dust test and you can run your finger across a box or two, and know that it’s been there for two or three years. And then you look at the thing and you go yeah, notes out. And I think this opens up an awful lot of opportunities. People don’t usually get downtime like this.
And, and while the downtime is bad, which it is because you’re not making. You’re still paying a lot of employees. And a lot of these employees can start working on these systems. There’s things that are put in place. I, I, one of the biggest things I recommend to my clients and people we’re working with this, don’t just sit and let this go by.
If it’s ridiculous to do that, go in there and start to fix things. You know, if you need a consultant to help you or, or one of your suppliers to come in and help you, whatever it is that you need. Do it because how often does anybody get, you know, four weeks of downtime that they’re not working on something that they can sit down with their engineers and other people, even if it’s remotely over a zoom conference and started talking about how we’re going to fix things it’s an incredible opportunity to get things together that nobody ever gets.
You, you, you always have to fight fires of your factory while and your supply chain while you’re running and then trying to fix things. So it’s much slower. So, so from the automation perspective, like I say, you see robots and stuff. And what we try to tell people to do is if you’re going to plan on this automation, you need to also start thinking what kind of people you need, because the old kind of people manufacturing people who maybe don’t have the highest education.
Are going to go away, but now you need people to fix your robots, run your software, run your automation, put things in place. These are, you need less people, but you need a little bit more expensive people. So there’s a trade off in how this works. And if you do it correctly, the automation can work really, really well.
If you do what some people do you think you buy the automation, you press the little green button and it works. You’re going to fall apart in six to nine months. It’s just that. So so we see a lot of different people wanting automation right away. And our biggest thing is to suggest to them, okay, great.
Let’s, let’s do this, but let’s make it a real plan. Let’s sit and discuss, what do we need to do? How do we train the people for who are gonna, we’re gonna fix the servo motors on the robots. For example, who’s going to program the robots. There’s going to run the ERP. Who’s going to do this. Does our current supply chain people, are they capable of this?
What do we need to do? And these are the kinds of things that that we’re doing right now and are working out, really working out quite well. We have people who are looking ahead and trying to get things done during this time period.
JITHENDRA PALASAGARAM:
And just to add to David’s comments on that. As David talked about automation, it’s not just a robotics or right. Or he mentioned some existing systems in place, things to automate some of that. And one of the things companies can look into doing this. If you look at supply chain and usually even purchasing, what are some of the things that could be automated so that the resources can focus more on value generating activities versus doing manual stuff.
If companies are using spreadsheets and things like that, instead of spending time to consolidate spreadsheets and manual processing of data. Hi document that process so they can focus more on software development. negotiating with suppliers, things like that, that drive business value versus some of the manual stuff they do today.
DAVID COLLINS:
Yeah, and it sounds like a lot of these activities also helps the, your, so I’m assuming it’s helping your customers to kind of differentiate themselves a little bit where they are more agile, they’re more, faster, more efficient. And it helps to differentiate themselves. As industry is getting hit hard in terms of the amount of new business coming in.
JITHENDRA PALASAGARAM:
Yeah, definitely differentiate and then actually better. So that customers and customers as well, right? If you look at contract manufacturing, we’re doing some of these things in the end, they can serve their customers better, whether it’s an OEM or they’re in customer, where that might be a speed of service, I can do things faster, a faster response and better value for their end customers by implementing some of these.
One of the things we tell our customers constantly. And I’m sure you know, this, the same thing is this. There’s a lot of people who can make electronics. You know what I mean? I’m not saying it’s a commodity, but making computers, making cell phones, things like that. There’s a lot of companies who do this.
So what differentiates you? What keeps you in business when you have the Foxconn wisdom? So the world competing against you, or maybe if you are Foxconn kind of wisdom or some of these other big companies, like. What differentiates you, what differentiates you is, is, is really good planning, setting up your parts system.
You know, people don’t realize that the parts inventory, according to most Harvard, Harvard business review, and many other places, it’s worth 25% of the value of the inventory that you have on hand, you have a million dollars on hand. That’s costing you $250,000 a year to the hand, right. And anybody who can look that up, go look that up.
I mean, obviously it’s a little different than different. Sectors, but, but the electronic sector, it is about that 25 to 30% because a lot of things go away after three months, six months, nine months. So if you’re not managing this correctly and holding it correctly and doing it correctly, you’re going to lose a lot of money.
And so how do you differentiate yourself? You differentiate yourself because your customer designs a product and you’re the one who makes it for a really good price. So people can, people can have flexible. It can be some flexibility and costs that can be some flexibility and profitability and things like that.
These are good things to have. Yeah. Are there speaking of differentiation, are there any new services or things that you know, customers are starting to offer to their customers in order to win more business? Are you guys seeing any of that? Get them there. Do you see that from your customers point of.
Yeah, in terms of the if we take the example of a contract manufacturer and that serving as the end customer some of the things that they are doing today is actually if we take the coding process, for example, today typically when they get a request for. From an OEM. I takes a contract manufacturers anywhere two to four weeks to respond to that code.
So they’re looking at ways. How do they improve that process? We have the process by implementing the new technology that’s available from different vendors. So speed is really important for them because if M is trying to design get a product out to the market, the faster the contract manufacturers can respond to the code, get the product to build the better it is.
The other thing is around not just costs, but also. Providing additional value, not by potential looking at risk related issues. So when they get a court request for court, that if they are actually building capability where they can actually look for what are the potential risks out there in the supply chain, so they can flag them up front in the process.
So the OEM can actually mitigate that risk before the product gets released. So some of the things like that where implementing systems process students will drive additional value to their industry. Yeah. And I think the other thing is, well, the other thing is, is, is, is, is becoming irreplaceable to your supplier or your customer.
And you do that by being part of their system, get involved with them. Okay. So people who are in contract manufacturing or supply to contract manufacturer, whatever, there’s a lot of smart people there. They can easily come up with some ideas that might save their customers. Might make the engineering a little bit better because your customer’s not thinking about that.
The auto industry does that extremely well. And, and what you see in the auto industry is you, you, you see the supplier and the customer becoming one, and it’s not always just based on price because sometimes the supplier comes down and you, the price might be slightly higher, but their quality and their help in, in, in the setup of new products and things like that is.
But you can’t afford to get rid of them. So it’s not always a price option. It obviously price is extremely important, but you know, work on making yourself indispensable by sharing your ideas sharing things that you can do to help your customer. Because if you do that, you become. Yep. Yeah, it sounds like a lot of, a lot of things are moving towards being a, not just a supplier, but more being engaged in the process, being engaged with your customers and truly becoming more like partners, whether it’s through flagging risks or savings opportunities up front, or helping engineers do the design and design the processes better so that the manufacturing is a lot easier.
So there’s a lot of ways to engage upfront. Becomes part of your differentiation and also also brings that your customers are staying with you through these tough times. Correct. So these are great points guys. I think we’re at a point where we should start opening things up for we should open things up for question and answers.
I don’t see many questions typed up, so I’m just going to unmute everybody in the audience. Folks, what any questions from anybody in the audience so far,
and if you would like to talk you can unmute yourself or you can type questions in the Q and a section. So happy to answer any of those questions.
And we want this to be interactive if you’re seeing something different from based on what you’re working on, this, share your ideas towards what you’re seeing with your customers and your companies as well. Yeah. I mean, any great tips or advice you can share with your peers, that would be great.
Thank you.
All right. So while we are waiting for any questions to come up David, some questions for you Okay. So I see a question that came up let’s see, are there any counterproductive activities that we are seeing that that could cause issues and go and almost like you know, fire backwards. So I think those are some of the great questions that just, what are the things to avoid and not get carried away in some of the direction.
David, we can start with you on that. I think things that can be counterproductive is, is to not let your people, as they’re coming in, have a sense of security that the workplace is secure and safe and things like that. Even if you have to go a little bit overboard to, to show that it’s safe, put up some signs, do some things like that to make it so that your people don’t feel safe, that that, especially in places like China, Mexico, things like that, where people can just.
And w which they do, you know, in the west, you don’t see that as much people just leaving and going to another factory so easily, but in China and Mexico, where I worked in other places, Vietnam, people will leave. They’ll just go to another factory very, very quickly. So counterproductive is, is not to really treat the people, right.
Not to take care of them really. Right. And all so this is, this is a critical, definitely a critical aspect of what needs to be. And the other counterproductive at the thing that you can do is, is, is to not take care of your equipment in the same way, too many. Too many people don’t take care of the equipment really well.
And when you’re going to start up after you’ve been down from five or six weeks, not taking care of your equipment, doing the lubrication, doing all those kinds of things correctly can really hurt your factory too, because if you start to break down right away especially if you’re a key supplier down those supply chain, if you start to break.
Somebody might go looking for another supplier on you. So you have to make sure you’re ready to roll. Yeah, definitely. Also some great points. I think another question that came up is what countries or regions do you guys see would benefit from the diversification of the supply chain, which is likely to lock our, between the tariffs that were earlier in the early part of the year and late last year.
And then now the COVID-19 is. I’m sure a lot of companies are thinking about diversifying their supply chain. So any, any thoughts on some of the trends you’re seeing geographically industry-wise and any other ways yeah. On the electronic side, as you pointed out this and that you already start seeing some other movement from China or other countries in Asia because of the.
What are the other reasons for some other things coming back to Mexico, to north America region, for example. So the manufacturing coming back to Mexico, but now there’s answer. Talk about even semiconductor manufacturing think of it, but. Staff, the manufacturer might be coming back to the U S for example, where predominantly concentrated in Taiwan, China region.
But some of the things might come back to you in the us and semiconductor manufacturing site. So shift to some other regions within Asia, but there’s also some coming back to north America and maybe us as well. I see the same thing. I see people wanting to put it. Some key products close to the supply chain, or as close to the end users.
They possibly can. You see it in Europe? People are going in to Eastern Europe a little bit, Mexico. Even Africa right now is starting to get I’m currently in the middle east and the, and, and we have clients coming to the middle east because it’s right in between Europe and in Asia and they offer an opportunity to.
Put some factories here. So, so people are looking like crazy at diversifying and not putting all their eggs in one basket at this point in time, which rightly or wrongly is going to happen. I think the one byproduct of the COVID is, is people aren’t going to be as dependent on one area in one region as they were in the.
Shenzen China is obviously the king of electronics, and I think some of that’s going to be hurt because of this. Jensen’s gonna maybe lose some businesses as people move around and things like that. Cause right now in Shenzen, I mean, everything’s there. It’s unbelievable. Yeah. And that’s a great segue to the next question, right?
That as people are thinking about diversifying their supply chains and looking for new suppliers or partners to help them with. You know, it’s, it’s good for the suppliers to rewire those add additional value that you guys talked about before. So one of the questions was partnering with your suppliers in terms of defining automation and processes and things like that.
Are there, one of the question was how long does it take to go from making those kinds of changes? Right. Adding some kind of automation and training. Paying the employees to do the maintenance and getting things up and running. How long typically do you see that? And do you see that, that suppliers and their customers partnering in these current processes?
Oh yeah. I see people partnering, which I think is a really good idea. You know, guaranteeing, if you put in some automation we’ll guarantee, one way is to guarantee you some business, some companies will even, you know, give loans and, and, and invest with, with companies. Governments will do that. Especially, you know, especially across Southeast Asia, China, and in the middle east governments in particular are interested in how.
Quite a bit, if business can be brought, brought to them. So that’s good. The length of time will totally depend. Let’s say you have almost zero information on automation. It might take you 18 months to two years to get it right, because it does take some time to train the people. It does take some time to decide what it is you’re going to automate because you don’t want to automate waste.
So you got to take waste out of your system and then you automate what’s really the product of what you’re going to automate. I mean, I’ve seen people. Automate their warehouse, for example, just as a simple example, but yet they had so much junk in the warehouse that they didn’t need that the automation was like crazy.
They probably needed half of the automation. If they would have planned the supply chain correctly and had good planning systems and things like that, same thing in manufacturing. You know, if, if, if you have a lot of waste in the people movements those same way, so they’re going to be in the robot movements if you have them.
Yeah. You will have robots soon instead of people, but you’re just automated waste and spend a lot of money. You know, the steps to automation is to learn about your process, eliminate the waste, as best as you can, while you’re eliminating the waste train, start to train your, your, your maintenance people and determine then what automation you need to do use and buy it.
And then it works out quite well. I mean, there’s, there’s some very good steps in doing it. If you do it correctly, you can get some very good stuff done in 18 months. W where, where it’s really, really running. I think it takes two years. It’s not an easy thing. If somebody thinks they can do it in three months, they’re going to be in a shock because they’ll have breakdowns and they’ll have programming problems and, and they’ll have issues.
You need to do it correctly. Automation is great. It’s just takes, there’s like any good thing. It takes a process to get it done properly. Great point. Are you saying yeah. Good. Any automation from supply chain that you’re seeing? Yeah, the affidavit expanded, I think coming from a different viewpoint around the process automation, or let’s say predict purchasing process.
And supply chain with some of the new technology providers out there cloud-based solutions versus if you think of implementing an ERP right back in the day, or even recently, it’s a three year, four year project, millions of dollars of investment. Now things are much different with cloud-based solutions where you can actually get from initial discussion to implementation within few weeks, and then you can start realizing benefits from that implementation, right?
So the technology improving and third best solutions, it’s much easier to actually automate some of this manual processes. I don’t want supply chain and purchasing and the ROI is also much faster. But one point I agree with David is that you are good, right? You are understand your current process, make sure figured out that it makes sense start automate, not everything.
So that’s very important. Yeah. Sounds like it’s a long-term commitment, right? Whatever you do, it’s not something you would just whip it up quick and implemented and then you can pull it back later. As things get better. These are the changes that are going to affect the customers longterm. So keep that in mind, as you make those changes, that you are committing yourselves for longterm.
So great points. I think there’s another question around somebody mentioning that around the communication, right? That a lot of people are used to meeting their suppliers, meeting their engineers in person. And talk about some of those things you know, remote working is great tools are great, but it’s always.
It’s never as effective as meeting in person and some of the themes that you see that you can see now. So any, any examples that you guys could share that you are seeing with our customers, some specific examples that they’re doing to help things make it as smooth as possible? Well, again, things like zoom meetings, things like or whatever format you use.
When I was working for Foxconn, my, my factor was in Juarez mix. And our home office was in Taiwan. And so we got very used to meeting over, over the phone and things like that. Very seldom did we actually get to meet up face to face with the people we had in our suppliers? Again, I think this goes back to your planning, your KPIs, how you do things and, and what it is that you expect out of something.
If you’re getting good product from your person at the right price and they’re on time, I mean, you really need to meet with them that. I think a lot of meetings are, are because people think they need to meet a lot of people like meetings. And, and I don’t think you need so many meetings all the time.
So I think some of this will force you into having real meetings for real things at the real time, not always just face to face, because this is what we’re used to doing. Again, this is another opportunity during this course of time, you can’t meet. So find out why you have to meet. Can you save a lot of money in travel costs and things like.
Right now, for example, we’re doing things in China for customers who are used to having their engineers in China, but they can. So what are we doing? They asked us to go in and represent them, but they don’t have 10 or 11 engineers. They like, they normally done, they have one or two people from our company that are helping them.
And we’re doing zoom meetings with them. We’re doing work with them. We’re doing all kinds of other things. And it’s working. It’s working quite well. These people are getting stuck. We’re doing we’re doing things like working with, with molds and molding and all this other stuff can be done remotely.
We’re taking pictures, we’re showing the customers and the customers are directing us. It’s, it’s pretty, it’s pretty interesting and capable. I think people are gonna learn from this and I think it will help them. And you go back to the cloud based systems you’re talking about, and it’s true with cloud basis.
You can use some of these things and people can see what’s happening in real time. You know, where are my parts? What part of the road are they on in real time? You know where things are. And in real time, you know, what’s happening and you don’t have to be with your supplier all the time, finding out what’s going on.
There’s a lot of money savings that can be done there and time savings that again, will allow the people to help grow the business instead of just maintaining. Yeah. Yeah. I think one of the questions were around, as people are thinking about diversification, right? It builds, it comes at a little bit of a price.
When you talk about diversifying your supply chain in the short term midterm, when you starting to divert a supplier supply chain, looking at new suppliers, it’s going to bring some inefficiencies, some issues in the near term until those suppliers get to know their customers. And why’s the other one.
Are there. Do you see that? And number two, are there any things that they can do to help ease the transition to tender? Are you seeing from supply chain, from your customers, some of those challenges. Yeah, so diversification, I think we’ve talked about, but too much is sometimes problematic. And then it was up late chain.
Maybe you start off with a thousand when it goes to 5,000, for example. So two months of sufficient is also an issue, but that’s where it’s important to kind of David’s fine. When you look at this, the key is being close to where your end customers are. Maybe that’s kind of a looking at it as a driving force to kind of be close to the product that the end product that’s been delivered to the customer and make those additions different and dependent on that.
So. You can have, instead of having one globalized location for all our regions, maybe you look at your product portfolio and where it’s being delivered and being close to the customer. So you minimize some of those disruptions and delays that happened with their global supply chain. Yeah. Great. All right guys, I think we are a little bit over our time.
So just any parting tarts based on the discussions we had today, any, any last pointers, some of the key highlights you would like to point out to our audience from each one of you, David? I think the most important thing is to use the time you have wisely, right? Th th you don’t have a whole lot of people in your factory.
It’s a great time for purchasing to understand what they can do to make changes. Good time for supplier quality, good time for manufacturing to, to, to plan some things that they need to do. It. It’s a really great opportunity sack, great for the company, but it is a great opportunity for people to plan. If they’re smart and use their time wisely, and then take into account the people that are coming in, they’re going to be nervous.
Make them feel comfortable by, over going overboard with their safety and taking care of their safety. People should expect to go home in the same condition that they came to work in. So, so if you can help them feel that they’re going to do that, they’ll take good care of them. It didn’t really any, any last thoughts?
Yeah, I’d just like to thank everyone for joining and be safe and healthy and hopefully it’s a new normal for everyone, so we are getting used to it. So we’ll get through this. Great. Thank you guys. Thanks everyone for joining. And we’ll share the recording in next, next day or so with everybody.
And please reach out to us or our speakers, if any feedback or any questions we look forward to doing more, the more of these in the future. Thank you. Have a great day, have a good evening. And we’ll all join again soon. Okay. Bye. Thank you.
