Disruptions in supply chains for the customer premises equipment manufacturing sector — as well as ongoing labor issues due to stay at home orders since 2020 — have caused executives in sourcing, logistics, supply chain operations to rethink how to meet network service provider (NSP) needs for gateways, set-top boxes and other connected-home devices in a timely manner.
In response to these developments VANTIVA has, over the past several years, developed a hyper-flexible and adaptive global manufacturing operation to improve efficient use of capacity and reduce friction in the delivery of customer premises equipment (CPE) to NSPs around the world. This fall, the innovations implemented as part of VANTIVA’s Smart Lines manufacturing initiative were publicly recognized by the Institute of Supply Chain Management. We sat down with Jean-Francois Fleury, Senior Vice President of Global Operations and Supply Chain for VANTIVA to discuss this transformative initiative.
Here is what he had to say.
Thank you for taking the time to chat Jean-Francois. Let me start by noting that
VANTIVA recently won an ISM Innovation award for your work in designing, developing and deploying a new dynamic and flexible manufacturing process. Can you tell us about the program?
Jean-Francois Fleury: Thank you. It is true and we are very pleased that our Smart Line manufacturing initiative did win the Institute of Supply Management’s Supply Chain Trailblazer Award for Innovation.
This award measured a variety of criteria to assess the effect of innovative practices on VANTIVA’s processes, and those of its value-chain partners including: process, initiative, commitment, impact, influence and achievement. We are thrilled to be one of 17 global companies recognized by ISM as making a positive impact on the supply chain landscape.
The central idea behind VANTIVA’s Smart Lines initiative was to create a “pool” of production capacity across facilities around the world that would be able to quickly adapt to changes in the marketplace and support the manufacture of multiple products within the same setup. We set out to develop a strategic and operational framework for all of our manufacturing partners so that the setup can be implemented similarly in facilities in Asia and in Latin America. The idea was to establish the ability to shift manufacturing capacity from one part of the world to another as conditions in the international supply chain environment change or market demands evolve.
Beyond creating a more flexible environment, however, we also wanted to enable speed. As a result, we set a 30-minute objective for being able to swap out one product to another on the same manufacturing line. After years of hard work and collaboration with our manufacturing partners, we have reached that goal.
It represents a major break with past practices in the industry. Products on our Smart Lines facilities are no longer rigidly dedicated to a particular production line or even a particular factory. This means that we are now able to dynamically manage production on an international scale and develop schedules based on a deep and near real-time understanding of what capacity is available to maximize utilization across our global production footprint.
When did work on this initiative start?
Jean-Francois Fleury: We started engaging in the initial activities a couple of years ago by soliciting lots of feedback from our partners and internal stakeholders about pain points or frustrations they were experiencing across supply chain operations.
With an overall goal of improving efficiencies and reducing the costs associated with traditional manufacturing lines, we launched a stem-to-stern review of our manufacturing process, and reevaluated every assumption and process element from scratch. The goal was to devise a manufacturing capability that would be as flexible as possible.
To that end, VANTIVA aggregated all the most common factors across all of our production lines and created a new “manufacturing line model” that would allow us to run many different models and products on a single line.
It was a massive project. However, the initiative received support from senior leadership and the board of directors. As a result, the research and development phases for the Smart Lines initiative was completely funded.
Once our development phase was complete, we offered selected partners an opportunity to try our newly released Smart Lines manufacturing process. As our partners ran these lines the results manifested themselves immediately. We were able to track reductions in cost and improvements in time and operational efficiencies.
In fact, our partners found that a single Smart Line could replace three or four of their legacy manufacturing lines. This meant that our manufacturing facilities could absorb and meet the demand by switching production content from one product to another in about 30 minutes. This is a huge improvement over the previous four to five hours.
Can you tell us where some VANTIVA Smart Lines are currently located?
Jean-Francois Fleury: Today we have Smart Lines in Vietnam, Indonesia, Brazil, Mexico and India. If any of these regions experience a disruption in the supply chain, we now have the ability to shift the manufacturing to another location and still be able to meet deadlines.
This is extremely exciting for us especially since there seems to be no end to disruptive events today that can affect deadlines, including technical challenges, geopolitical events or pandemics.
Have industry standards played a role in Vantiva’s ability to develop Smart Lines, a common platform that works across different customer bases?
Jean-Francois Fleury: The short answer is yes. But let me elaborate. There are two elements that contribute to our competitive advantage with Smart Lines.
The first, and most obvious, factor is economy of scale. Our costs are much more competitive because we can invest in one manufacturing line that serves six or seven products instead of having to manufacture separate lines for each product. This is a cost efficiency that positively affects the cost of the product itself.
The second factor is added flexibility. Smart Line is designed to provide more output when needed from any of our facilities around the world. The combination of these two factors is why the Smart Lines program is emerging as a key differentiator for our customers in this highly competitive landscape.
That is impressive indeed.
How is VANTIVA working to align all the key players?
Fleury: It has been interesting to see how the value-chain has responded to this initiative. We placed a lot of effort into proactively communicating exactly what we are trying to accomplish. As a result, there has been very little resistance. In fact it has really strengthened relationships across the ecosystem. We have found that the Smart Lines strategy actually removes obstacles between us and our manufacturing partners.
The process of implementation has provided much more clarity into the exact roles and responsibilities of each player. It has allowed VANTIVA to — in essence — become a managed service provider for the supply chain.
Read also our report on how Vantiva has revisited priorities in response to volatile global market