This article was originally published on IndustryWeek.
Keysight Technologies, a global $4.3 billion manufacturer of electronic test measurements and software, has its origins in 1939 in the workshop garage of two now-familiar names: Bill Hewlett and Dave Packard. The Silicon Valley-headquartered company—and in recent years, an IndustryWeek 500 regular—spun off from Hewlett Packard into Agilent Technologies in 1999 and then in 2014 spun off from Agilent. Keysight makes highly specialized instruments (oscilloscopes, atomic force microscopes, and signal generators, to name a few) for scientists, researchers and engineers in industries including aerospace, automotive and semiconductors.
It’s a complex business, with a supply chain that was a sprawling jumble when Shidah Ahmad, Keysight’s head of global order fulfillment and supply chain, made it her mission to root out duplication and inefficiency. As head of Keysight’s global order fulfillment and supply chain, Ahmad oversees nearly 3,000 employees and annual shipments of approximately $3 billion. Based in Malaysia, she is responsible for streamlining Keysight’s global network from 10,000 to 2,000 suppliers.
A nearly 30-year veteran of Keysight, Ahmad was heavily involved in enterprise-wide IT systems implementation and business process transformation in early 2000; the company’s global logistics and supply chain transformations; the 2014 separation from Agilent Technologies and the establishment of Keysight Technologies; and, the recent transformation of the company from being hardware and product-centric to being a solutions and software-centered organization.
In a phone interview with IndustryWeek, Ahmad shared insights into the technology, relationships and planning that are shaping global supply chains during the pandemic and into the future.
Can you talk about the shift in Keysight from being solely a hardware manufacturer, to service solutions along with hardware?
So Keysight is transforming itself from a traditional product-centric company focused on instrumentation to selling solutions, which will include the instrumentation hardware along with the software that’s embedded in it and also services. And I am also changing my supply chain processes model to be able to support the transformation.
We’ve made the changes in a couple of areas. One is, the production lines are still run by—and traditionally were run by—product. If I make products, I’m a manufacturing manager that takes care of product. I run it as efficiently as possible.
I’ve created a different accountability where manufacturing managers are accountable not just for a product that they run, but also work as the manufacturing manager for a solution group. So for example, when we talk about our solutions, they are market-facing and very industry-specific. So if I’m in automotive, my solutions are going to support our automotive customers in battery testing, for example. So I have a manufacturing manager that is now supporting the needs of that automotive group. She is not just looking at the one product that she is accountable for; she is now accountable to look at how do we fulfill the solution, making sure that you synchronize the supply of all the different products that will go into a solution. Making sure the software is done timely, and then the shift in terms of integration becomes a new capability.
It’s about synchronizing the delivery of multiple products that go with the solution, then integrating, configuring to be able to fulfill to the specific needs of an industry. That’s a new add-on capability and competency that we have now built inside manufacturing to be able to support this transformation.
Number two, if you think about solutions—and especially for Keysight, we work with what we call first-market-movers. If you think about 5G, we are a solution provider, a market leader in 5G, so when we work with our 5G customers, the ability to come up with new products and then ramp them very fast is so important. So we’ve created what I call a fast seamless process between order fulfillment R&D and the business team, so that we can seize the opportunity—this first-market movers’ opportunity to be able to do that quickly.
Order fulfillment for the manufacturing and supply chain has to be there right when our customers are talking about a new solution with R&D. With the business team, we are figuring out how to fulfill that solution as the solution has been defined. And then we have to ramp quickly. So the speed—there’s a compression of new market introductions for some of these first-mover solutions. And to be able to do that I need to have flexible, agile resources that have people with multiple domain competencies. And that’s a capability that we have in our manufacturing and supply chain organization. It’s so important for solutions.
Is it a challenge find people with those multiple competencies? Or are you finding that more people have those competencies, or are you developing them in house?
The talent is hard to come by so we do two things. We are definitely trying to attract the brightest talent out there to join Keysight and we’ve started to do this as part of even starting from our, what we call college hires. I’m very proud to say we are able to attract the brightest stars out there in digital, in different industry domains like automotive or communications.
But I would say a big part of it also is building that capability in-house. I’m a big supporter of building this competency within manufacturing. And how we do that is first expose them to a lot of training, but also expose them to a lot of different projects that can grow their capability in the different domains that are required. For example, one of the things that we do is value engineering—the ability to take a product and then look at it and figure out how to make it better. They get to redesign and re-engineer current products to make them cheaper, better, longer-lasting. That early exposure to value-added activities helps build up this capability that we need in this new world. And then of course, we have people that are exposed to different kinds of businesses. And in fact, I would say, my manufacturing engineers have become so good that they’ve now become R&D engineers working on the latest, sexiest technology products. And so it will become a development path. I’m one that believes in building that capability internally.
How do you develop your suppliers?
On our side, we provide knowledge transfer. We actually share some of our knowledge with them in terms of the application and the use of technology in our products, so that they better understand the use cases that would then allow them to design the best component.
The other way is just engaging with them during the product introduction phase—the R&D phase. But not just for areas like supply chain optimization. We are a big proponent of lean and we apply lean all across our operations internally, but we are also expecting our suppliers to use lean. We run lean activities together. So it’s not just about their engineering capability. It’s also about doing joint projects.
We’ve started work on digitalizing our supply chain. And this is another collaboration and partnership with our suppliers to make sure that they are on the same track.
Will there be more transparency in the supply chain with digitization?
I don’t think you can run away from it. At the end of the day, supply chain is going to get more complicated. It used to be a discrete, linear, sequential process. That is no longer true. It is very much what I call a digital network supply chain that will be much more complex. And managing this complex supply chain is going to be so challenging. If you don’t have transparency, if you don’t have visibility of information up and down the supply chain, you’re not going to have the speed to be competitive. So transparency, visibility are the enabler for speed to allow any company to be able to respond quickly to what the customer wants, to what is changing in the market landscape.
It’s not going to happen overnight. We’re working with our Tier One suppliers to make sure we have connectivity, visibility into what’s happening at their sites. In turn, we share our demand with them so they can react to it.
Are there any other trends that you want to talk about like in in supply chain—things that you see in the next five to 10 years?
Two key things are going to be shaping the manufacturing and supply chain area. One is the exponential growth of technology that will enable us to do a lot more in terms of managing a complicated supply chain operating model or network. We see a lot of those advances in technology—Industrial IoT, 3d printing, robotics, digital twin, augmented reality and also artificial intelligence. The advancement of the tools is going to shape how supply chain will look in the future and how you manage it.
And then the landscape of the world, the geopolitical situation, trade barriers, sustainability or even Black Swan events like COVID that are compelling supply chain practitioners like myself to rethink our footprint; I think that is going to be something that is also driving the supply chain. So you talk about in the past maybe a lot more globalization and people just working with specific suppliers. The pandemic is requiring us to rethink that model.
I do believe there will be more regionalization. Right now I’m looking at how I would tweak a couple of things to become more resilient. I have a dual sourcing strategy for my suppliers. Maybe I’ve got to think about whether I need a triple source.
Those are the questions that chain practitioners are now asking. Just from the learnings of the pandemic. Logistics, for example. We work with the all the key logistics providers. We are looking for more strategic supplier sources to make up for the shortage of available freight carriers in the world right now. That’s life—everybody is impacted. So instead of just being focused on shrinking our suppliers, we may have to open it up again in, in the spirit of resiliency, redundancy and business continuity.
Can you talk more about how COVID-19 has affected your supply chain and procurement?
The good news is all our manufacturing sites are running, while putting employee safety first … In terms of our supply chain, we’re working very closely with our suppliers to understand where they are in their ramp-up plan. We connect with them on a daily basis, sharing details about their capacity and making sure they are working on what we most need. We really had to go into prioritization mode because there was just not enough capacity, and we want to make sure we get all the parts we need.
In terms of our own workforce, we’re doing a lot more cross-training of our people to be better prepared. If only one person knows how to do something, and they’re not available and able to work, then you’re gonna be down, so the ability to cross-train becomes very important. We’re asking that of our supply base as well, and we see they’re also doing that.
Are you communicating with your Tier 2 suppliers as well? Is it a challenge to check in with them and make sure that they’re where they need to be?
We work with all of the supplier base around Southeast Asia and get updates every single day on where they’re at and at what capacity they’re running. This allows us to gauge where we could run into problem in recovering our revenue for this for this quarter and future quarters. The communication is very open right now because everybody is trying to recover as much as possible and we want to make sure that we get highlights on areas that they could run into problems.
Is there any technology that’s been particularly helpful during the pandemic?
The more digitalized a company is, the much better state they are in because you can’t have people on site right when these things happen, but you still need information. So the connectivity or what I call the transparency of information flow between companies is key. In our factories, we have a lot of automation. That automation keeps track of all the production flow and the test data, as well as the demand data to see what are customers are changing in terms of their requirements. That is a big part of our production and having that visibility from wherever you are definitely helps. So my engineers may be at home and will have the ability to see what’s happening on the line. If something fails on the line, they can see what has caused it and how
You mentioned 3D printing. How do you see it affecting Keysight’s operations in the next 10 years?
The first impact is in terms of our workforce, starting with the number of people in manufacturing. We’ve seen that happening already. I’ve been in the industry for almost three decades right now. The profile of our production headcount is 80% manufacturing operators on the floor actually doing the assembly and testing. But with the advent of automation, of robotics, I see that you’re going to have a lot less people doing the assembly—that’s going to be done more by machines.
But the profile is going to change to a lot more “knowledge workers” who can do analysis, and innovation and performance improvement. And we will have lights out at a lot of the factories. The machine is going to tell us what it needs to do.
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