The supply chain industry has been integral to global commerce since the time companies started building products. With cutting edge breakthroughs in technology, machines have become more efficient and products are delivered faster. However, there is still little visibility into the process itself. Due to the number of stages involved in the supply chain process, it may take suppliers an extended period of time to design, manufacture, assemble, package and deliver products ready for retail. Since most product owners typically have relationships with multiple suppliers, many times they find themselves lost in the process; unaware of risks to their product cycle due to inefficiencies in the supply chain or unforeseen circumstances. Jabil Circuit Inc, one of the largest manufacturers in the world, moving over 700,000 parts across a global network of more than 17,000 suppliers sourced from more than 30 countries, is about to disrupt the supply chain industry by utilizing Internet of Things (IoT) technology to digitize a process that has been mostly unchanged for several decades.
Today, Jabil has announced it will release new managed services powered by its InControl™ Intelligent Digital Supply Chain and Procurement Intelligence Platform. Before we get into the product itself, let’s visit the history behind this innovation. Jabil’s Chief Marketing Officer Joanne Moretti kindly took the time to speak with me about what inspired this platform, and how Jabil will utilize connected technology to disrupt the supply chain industry. Several years ago, Jabil began an exercise to completely digitize its supply chain. According to Moretti, a team of engineers came together to design a platform as part of what was considered an “internal project”. Many years later, this unofficial project has now blossomed into a global solution that gives Jabil and its customers a real-time view of the supply chain 24 hours a day, 365 days a year. By implementing IoT and radio-frequency identification (RFID) technology in its factories and with carriers, Jabil has created a fully digital supply chain.
Customers will now have visibility and control of every stage of the supply chain process; from production to packaging to shipping, all trackable from their phone, tablet or desktop. With the ability to track each stage of the process in real-time, Jabil can also reconfigure the process to help their customers keep products moving in situations where disasters or other global circumstances would typically delay the product cycle. Today, a large percentage of Jabil’s two hundred and fifty customers are enjoying the benefits of a digital supply chain. Digitizing the supply chain has not only allowed Jabil to gain significant business efficiency, but more importantly, has bolstered customer engagement. Jabil’s customers are thrilled that for the first time ever, they can have a transparent view of their product supply chain. Oscar Zamorano, SVP Operations & Supply Chain at iRobot, said “With Jabil’s InControl intelligent digital supply chain, we now have real-time access to vital data for more than 700 suppliers. Jabil gives us the intelligence we need to lower compliance risk, and the special expertise to reinforce our role as good corporate citizens.”
There is however one complaint that Jabil customers have made since adopting the platform, and that is they can only monitor a fraction of their supply chain, because each customer typically has multiple suppliers and in-house production. As a result of the positive feedback received from customers and quantifiable proof that a digital supply chain will result in better business outcomes, Jabil is actively developing its next generation of capabilities for the InControl platform and suite of applications that will integrate with any supplier their customers are engaged with. As for why the sudden digitization in the manufacturing industry, Moretti says, “The trend that is driving this is the very high expectations of the new consumer. Traditional manufacturers have a lot of pressure on them because new, upcoming companies are using cloud, digital and other technologies. One of the pressures on traditional manufacturing is consumer demand, expectation and personalization factor; since factory floors are old, outdated and are running supply chains on spreadsheets. The other pressure is that the barriers to entry are dropping, so manufacturers need to move faster to avoid getting crushed.”
By launching a commercialized version of their procurement and supply chain managed services, Jabil has positioned itself to extend its reach far beyond its own customer base. According to Moretti, Jabil intends to bring their platform to market via partner channels, and has garnered interest for adoption from companies in manufacturing, logistics and even the airline industry. Any organization who subscribes to the managed services will be given access to Jabil’s proven purchasing strategies, advanced sourcing capabilities, as well as execution and purchasing support to boost purchasing efficiencies and reduce costs. For the first time ever, smaller organizations can benefit from Jabil’s decades of expertise and global reach in the industrial, energy, automotive, communication, consumer and healthcare industries.
This isn’t Jabil’s first move in digitally connecting the manufacturing process. Jabil has implemented IoT technology on its own factory floors. In April, Jabil reached a partnership agreement with Microsoft to utilize the Azure platform to implement IoT technology and predictive analytics by using sensor data detect inefficiencies on their production line. Since the implementation, Jabil has already saved over $300 million in waste and reduced cycle times. Jabil currently has this technology implemented on their factory floors in Guadalajara, Mexico and Penang, Malaysia, and plans to deploy this solution to factory floors worldwide.
Being an IoT guy, I believe this announcement is a tremendous breakthrough both for the supply chain and procurement industries, and for the Internet of Things. Those who follow the IoT ecosystem have seen a rise in IoT technology adoption across industry verticals. However, one of the big challenges is that most companies looking to adopt this technology are being forced to use generalized connectivity and analytics platforms from Microsoft, IBM, Amazon, and a host of other technology companies. By creating an industry specific platform, Jabil is taking what GE did with Predix, a step further in providing a focused digital solution for businesses who have a stake in the supply chain, created by people who know the supply chain. In order for IoT to provide real business value, companies will need to gain insights from relevant data and monitor assets specific to their business. By utilizing a platform service provider who really knows their business well, as opposed to a generalized technology company, companies will start to realize positive business outcomes. Jabil knows how to operate product cycle well, and now others can benefit from their expertise and global reach. Despite being a large company with a tried and true business model, Jabil realizes that businesses in every industry can reap the benefits of innovative technology. As Bill Muir, Chief Operating Officer at Jabil says, “Jabil is uniquely positioned to drive digital transformations, creating new avenues of business growth and enhanced revenue streams.” Let’s hope the leaders in every industry have the same mindset.
Thanks to Joanne Moretti and the people at Jabil Circuit Inc. for sharing their digital transformation story! It’s a powerful one!