Organisations around the world are embarking on company-wide transformations, embracing a future defined by technology. But Jabil – a manufacturing services leader employing approximately 180,000 people – finds itself in the unique position of driving both its internal digital transformation, as well as leading transformative efforts on behalf of some of the biggest and best-known brands in the world.
Jabil categorises the role it plays in its customers’ digital transformations into three sections, says John Caltabiano, VP of Supply Chain Management. “We're a manufacturing services provider so we support diverse customers across a variety of markets with different digital transformation needs. You can group these customers into three general categories. In one category are large multinational organizations with massively complex supply chains. We partner with these companies to streamline supply chain orchestration while helping them reduce cost and risk.
“The second category of customers are those going through a transformation due to market disruptions. They may be going through divestitures or acquisitions. They also may be facing major changes in their industry sector, which requires them to reshape how they operate. These organizations look to us for thought leadership, market benchmarking and product proof of concept support. It’s a very collaborative approach.
“Then you have a third kind: customers that are really up-and-coming and don’t have to rectify historical issues. They can concentrate on what they’re good at and say to Jabil, ‘I want you to run my supply chain’. Their perception is that they’re not going to invest in those capabilities, when we can do it for them.”
At the same time, Jabil is transforming how it runs its own supply chains, and is implementing a digital initiative around the platforms it utilises to deliver its services, signalling a move towards cloud-based infrastructure. The size of the business – over 100 factories in 29 counties, hundreds of customers and a supply chain of 17,000 companies – means the transformation is one of real scale.
New technologies have already transformed how Jabil operates from a procurement perspective, says Caltabiano. “The size of our company means we have hundreds of contract negotiations going on at any one time. It’s critically important for us to expedite report generation, quickly produce analytics, drive rapid negotiations and produce results that help our customers achieve better business outcomes.
“With our digital platforms and tools, we now utilise, data and analytics are available in real time, so we can start negotiations at any time. We can deploy pricing as soon as negotiations are completed, which changes the whole dynamic of time-fenced events. We now can change the conversation with suppliers very quickly based on our analytics and actionable insights.”
Working with so many companies in locations across the globe gives Jabil a better perspective than most when speaking about industry sectors keen to embrace disruption and digitisation. It is Caltabiano’s belief that companies in the markets that are being most significantly disrupted – notably by IoT – are ‘moving the fastest’.
“I think the regulated businesses are the slowest,” he observes. “Regulated products tend to have lengthy life cycles, which makes it difficult to change the way you run their supply chains. After all, if you're building a product designed 15 years ago with a supply chain that was implemented 15 years ago, it's hard to transform how you operate because of long-term investments and legacy operations.
“To an extent, how prepared companies are to embrace the change is partly dictated by the dynamics of the industry they work in.”
When it comes to Jabil’s own digital transformation, the company is on a fast track, analysing how new technology can speed the myriad transactions that take place every day. “We have, in my division, 1,500 buyers, so I’m buying over 350,000 parts on a quarterly basis,” says Caltabiano. “That’s very transactional and repetitive and there is certainly the opportunity for part of that decision-making process to be accelerated and streamlined through digitisation, automation and analytics.”
Jabil believes that by automating some of the more transactional responsibilities, the prospect of a career in manufacturing and supply chain operations will become even more attractive to emerging young talent.
“People who come into the workforce don't want to sit at a desk and place orders. A machine could do that. We have to think differently because it is a new generation of people we’re hiring. You have to think about what's interesting to them.
“We recruit new college grads out of supply chain curriculums, from some of the top schools, and they can bring a lot of talent to the manufacturing sector. What we can do is attract them with our digital tools. They want to dive into it and they’re exactly the kind of people we want because to take this forward, you have to have practitioners.
“We can't go back to the old way, because they will come in and only think about the new way. A benefit of the transformation has to be bringing in the talent that knows how to use these tools and think differently about their work.”