Cork firm offers security against global volatility risks
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International product services powerhouse Flex, a $24Bn Silicon Valley-based corporation offers manufacturing in Cork and Leitrim, and distribution of electronics and medical devices from Cork and Limerick as part of a global network of more than 130 facilities.
Our goal is to optimize every aspect of a product’s journey, from design and manufacturing, to delivery and after-market services.
This enables customers to get to market quickly, with superior products, in the most financially efficient and sustainable way.
And we do this for many of the world’s biggest brands across multiple industry segments.
As such, we are a trusted and integral part of their operation and handle some of the most complex supply chains in the world.
Global volatility is exposing everyone to more risk and there are multiple factors at play. Geopolitically, we see some governments retreating from open trade policies and creating uncertainty around tariffs and trade.
Climate change is an issue that is now ranked in the top five risks by probability, by the World Economic Forum.
We also see more frequent threats of large-scale cyber-attacks which can cripple a supply chain.
Add to that a globally destabilizing pandemic which hit China first, the center of the world’s manufacturing ecosystem, and you have a supply chain shockwave that reverberates around business and magnifies the complexity and uncertainty of global trade.
I think that people now appreciate how connected and interdependent we are on each other for global trade to succeed.
Normally, when a company’s supply chain is disrupted, the company will invest in short term solutions to directly address the disruption. Once over, they return to business as usual and shed costs associated with the contingency measures.
Not this time.
We will see the focus remain on resiliency across the value chain, and that will drive a number of permanent changes as companies move to secure supply.
Over-dependence on any one partner, country or region can lead to critical issues in times of disruption as we have seen.
Firms are now looking to regionalize their operations and shorten their supply chain to minimize geopolitical risk. They are also looking for multiple local sources of supply.
However, adding more suppliers and setting up regional operations can add a lot more cost.
I believe we will see more companies partner with supply chain specialists like Flex, to use their economies of scale, extensive supplier base and expertise to off-set the costs and risks of going it alone.
One of our large audio customers wanted to de-risk and simplify their business to enable the rapid movement of inventory closer to end markets.
We set up regional postponement centres around the world to cater for bulk shipments of product components.
We then configured and fulfilled the final product based on real-time orders in these local markets.
The result was a more secure and cost optimized model for our customer which delivered better inventory control, quicker delivery to their end customers and almost halved CO2 emissions by streamlining shipping.
During the first wave of the pandemic I witnessed the power of partnerships and the importance of regional supply.
The urgent spike in demand for medical equipment coincided with border restrictions.
Manufacturing moved to regional sites, and we had to build regional supply chains quickly.
Using our scale as a global medical device manufacturer, with products in every hospital and pharmacy in the world, we succeeded in working with governments, healthcare providers, and suppliers to respond.
It was vital for our medical device and pharmaceutical customers to be able to tap into local expertise and global resources to solve the complex and urgent supply chain issues they faced.
My belief is that many companies reached a tipping point in their sustainability transformation during the pandemic.
As we stopped travelling, and the world slowed, the environmental metrics recalculated and improved, demonstrating that our actions can and do, make a difference.
I believe a circular model of product manufacturing will prove to be more efficient than the old linear model.
The term ‘circular manufacturing’ describes a closed-loop process which eliminates waste through the selection of reusable materials. Products are designed to allow components to be easily separated, and there are supporting business models to make this a cost-effective option.
The plastic parts produced through our re-manufacturing process represent a savings up to 82 percent on energy, and a similar reduction in greenhouse gas emissions.
An impressive 97 percent of recovered material goes back into the supply chain.
Sustainability drives our customer’s reverse logistics strategy through our regional repair, refurbishment and recycle services which can almost half CO2 emissions.
A focus on sustainability ensures 98% of new global suppliers to Flex are screened to ensure working conditions are safe, operations are ethical, and the company is environmentally responsible.
A lot of consumer spending has moved online as the door to the high street repeatedly opens and closes during the pandemic.
Flex invested heavily in our Forward Logistics business to enable our customers to deliver directly to consumers homes.
As office workers all over the world moved to working-from-home, this too drove on-line orders for keyboards, mice, headsets, cameras and notebooks.
Business-to-consumer shipments tripled.
The changes we expected to see in supply chains in five or ten years’ time, based on evolving business and consumer choices, are already upon us.
The response requires an urgent shift to regionalization, an increased focus on sustainability and solutions for home delivery for both consumers and those working from home.
Companies and supply chains can no longer look to their past model of business-as-usual, and must focus now on quickly adapting to be relevant and ready for the next generation of business execution.
