Interview Story - Took Initiative

When I was working at Wistron in my last position as a Supply Chain Manager for the Ecobee account, my responsibility was to help Wistron factories in different locations to meet customer’s production plans and expectations. I had to escalate to the customer any supply risk that came up and implement solutions, take actions, and follow up with the factories to resolve the problems.

One topic that always came up in the Quarterly Business Review (QBR) meetings with Ecobee executive management was the flexibility of the material supply on-demand changes. The factory’s reaction to sudden demand changes was slow. This was due to the majority of the component’s lead time being longer than 8 weeks and a high number of single-sourced items (80%).

Any demand changes would require lots of “fire-fighting” activities from the buyers who were spending most of the day escalating and chasing shipments for only one account. The buyer team was overwhelmed. In order to handle the workload, we would need to hire more people which would have increased significantly the overhead cost and selling price to Ecobee.

Since the cost increase was not an option, I had to figure out a way to make the purchasing process more efficient with the same number of people. I spent time brainstorming internally with the factories’ management, the sourcing team in Taiwan, the Ecobee Account Director, and externally with my customer Ecobee. I come up with a list of long-term supply chain initiatives to implement in the next 6 months to 1 year in order to make Wistron more flexible on-demand changes.

The most important was to reduce the component lead times and expand the customer Approved Vendor List (AVL) to have leverage with suppliers and reduce the potential shortage risks from one vendor.

The top 3 initiatives were:

1. I asked the factory to increase the Vendor Management Inventory (VMI) implementation in the 3rd party warehouse (3PL) for the inexpensive components, with 60 % of the Bill of Materials (BOM). The buyers just had to monitor suppliers to keep the contract agreements and refill the buffer stocks in the warehouse. I monitored how many new vendors and components were added and quarterly presented the progress to Ecobee. This way we had more buffer stock near the factory which could cover short-term demand increases and gave suppliers more time to produce and refill the stock. The vendors were responsible for refilling the stocks as soon as they reached a lower limit. The material pulls from the warehouse were done by the planners. This process was more automated, It reduced the buyer’s workload of weekly new orders, order monitoring, and chasing deliveries with vendors.

2. I developed with Ecobee, Wistron R&D, Sourcing, and Purchasing team in China, a communication system and component alternates approval process across these departments. The target was to expand the approved vendor list from single-source components with one vendor assigned, to a minimum of 3 or 4. Wistron had to find more alternates and Ecobee reviewed and approved. This gave buyers more leverage with vendors. This became invaluable in 2018, when our previously sole source supplier for 76 cheap resistors and capacitors, Yageo, announced a massive reduction in capacity to refocus their business. It was predicted this would cause a supply shortage across the industry. I found replacements for all 76 in 3 months, with no line down. At my request, Ecobee hired a Component Engineer who worked closely with me and added a new collaboration feature to their system that Wistron could access. I would upload and submit the proposed alternates, and he coordinated internally the approvals. The close collaboration and the new process worked so well that we also implemented also for the New Projects’ single-source items.

3. I did an analysis of the Bill of Materials (BOM) and developed a list of components and quantities to load weekly in the SAP system as Strategic Safety Stocks. This allowed more flexibility on-demand increases. I came up with a calculation formula based on stock, demand for 3 months, usage, and price, in order to decide the appropriate quantity to load. This list was updated weekly by me and sent to the customer for liability approval. Since this list implied millions of dollars in additional liability risk for Wistron, I made sure we got customer liability approval on time in order to send it to the factory every week and executed it by the buyers on the following MRP week cycle.

After these 3 initiatives were implemented and executed on regular basis, we noticed a significant reduction in shortages for the products in mass production, within 6 months. This allowed the factory to better plan their capacity for production and for the Wistron buyer team to focus on the business expansion with 5 additional new project launches, without hiring more people.