Cisco’s new SVP of Global Manufacturing & Logistics, Mike Coubrough, believes collaborative teamwork, digitization, and shared innovation can help manufacturing transform the future of supply network effectiveness.
In January this year, when Mike Coubrough took over his new role as Senior Vice President of Global Manufacturing and Logistics at technology conglomerate Cisco Systems, little did anyone expect the devastating turbulence that was about to hit the global manufacturing industry in the months ahead.
Founded by two Stanford University computer scientists in 1984 to develop local area network technology (LANs), Cisco is now a $52 billion global enterprise and has become a world leader in internet, networking, telecommunications, IoT, and cybersecurity technologies.
With a 100% subcontracted manufacturing strategy, involving four global production partners plus and a number of Original Design Manufacturers (ODMs), the effective oversight of Cisco’s supply network is essential to its success.
In our latest Dialogue with a manufacturing industry thought leader, Coubrough talks to Manufacturing Leadership Council Executive Editor Paul Tate about how digital tools and the collaborative sharing of information, best practices, and future plans help align the company’s supply network around key strategic goals, and how innovation and leadership awareness can help the manufacturing industry achieve more business equilibrium in the future.
Q: What inspires you about your supply chain role?
A: I think it’s really important to recognize, not just in the current crisis but during all the many disruptions, natural disasters and political uncertainties we’ve experienced over recent years, the role of the people within supply chain organizations and in operational organizations and the level of resiliency they have to deal with all these situations. I’m always amazed at how resilient those supply chain teams are and how easy they tend to make it look, yet how difficult it really is when you get into the details of how to keep products and services flowing around the world in what seems to be wave after wave of some sort of global or significant regional challenge. It amazes me how professional and positive and hard charging the people who make these things work on the front line really are.
Q: What supply chain challenges are keeping you awake at night?
A: There are many challenges going on right now, globally, with respect to health issues and their impact on people, employees, customers, and supply chains. The world’s just changing very quickly. So, our ability to connect with the front end of our business, our product managers, and our business leaders on what they see the needs are of the market, particularly as we are servicing multiple different business units, is critical. Those needs are sometimes unique. In a centralized operations and supply chain function, we need to be able to tailor our solutions and processes for each one of those. That is constantly changing in today’s world.
“I’m always amazed at how resilient those supply chain teams are and how easy they tend to make it look, yet how difficult it really is when you get into the details of how to keep products and services flowing around the world.”
Secondly, I think any organization, particularly within operations, needs to clearly be looking at how we can be more effective than we were yesterday and how we can do that in a more efficient way, to help out the bottom line of the business. That’s a lot, especially when you think about a company of our size, our customer base, and our product and service offerings. Just doing all of that doesn’t necessarily keep me up at night, but it’s clearly front-and-center of our focus.
Q: Indications suggest the adoption of M4.0 technologies is accelerating and that the future of manufacturing is set to become ever-more digital, agile, and data-driven. What’s your overall view of this trend?
A: We’ve been talking about Manufacturing 4.0 or the Industrial Internet of Things for a few years now. As a participant in the industry and in the profession, I’ve seen the shift from, I’ll say, an overload of information and data, machines talking, different types of signals coming out and so on. There was a period of time in the last two years where the challenge was what to do with all this information, how to make meaningful impacts leveraging that data. What I see now, industry-wide, is more of a movement of people towards understanding how to harness that data and information in an impactful way for the business, as well as for their customers.
Q: So, what’s changed?
A: It’s not just the technology itself. I think it’s the cultural transformation that is now catching up. Digital information is increasing everybody’s clock speed. In the past, you had weekly production meetings or weekly summaries of things. Now, all of that can happen not only daily, but some of it in real-time.
One example of how we’re leveraging that concept is through something we call Adaptive Test. Using machine learning, the test results of some of our products as they go through production are now being actually fed back to the test profile and it’s adapting to what the test process is actually capturing and seeing. So, it’s not static. I see more and more companies’ operations and supply chains using information and adapting in these kinds of ways. I think that’s a part of how culture is adapting to be able to use information and leverage it more effectively.
Q: In your new role at Cisco, what are the key areas of focus for you over the next few years?
A: Like any industry, customer demands are becoming increasingly challenging. The world is moving at an increasingly faster pace. As a supply chain, we need to make sure that we are focused ahead of where our businesses tell us our customers are going. We don’t want to be playing defense. We want to play offense there. Strengthening our connectivity into our different business units and understanding two and three years down the road where we need to take our offerings from an operational and service perspective.
Then we’ve got to figure out how to meet those objectives within operations and supply chain. I don’t think our challenges are terribly different from other companies and other industries. If your customer lead times are coming down, for example, most companies don’t have the luxury of just offering more inventory to satisfy variability of demand. You’ve got to be effective in meeting your fill rate, lead times, or on-time delivery, and you also have to do that in a very efficient way.
Q: Does leading a highly subcontracted supply chain require different approaches when trying to respond to new technology innovations or fast changing market demands?
A: When you think about contract manufacturing, it’s an industry. It’s an industry that doesn’t enjoy large margins and it lives on its productivity in terms of how to do things better, faster, and cheaper. That’s in the DNA of a contract manufacturing company.
At Cisco, we work very closely with our partners. These are relationships that have been coupled together for quite some time. We know each other pretty well. We’re organized, operationally, into regions and into sites. So, we’re quickly able to share best practices around the network and around the world. That type of collaborative ingenuity is part of the foundation of the process.
From managing day-to-day production and product development, from design changes and other types of things that happen day-in and day-out on the product lines, it’s extremely integrated from both a systems perspective and from a personnel perspective. For example, we have our own complement of test engineers and manufacturing engineers that know our products and reside in the field with our partners. So, at the contract manufacturing level, you’ll see a technical Cisco team as well as a technical team from the contract manufacturer working together.
If you’re in an industry where you have subcontracted out your manufacturing activity, one of the reasons for doing that is to partner with companies that are very good at process innovation. Then you both share the benefit of that in terms of how to get costs down, or how to be more effective, and how to adapt quickly across the network. Between the technology innovation of Cisco, and the process innovation of our contract manufacturers, it really is a win-win.
Q: How do you see M4.0 technologies having an impact on production operations, particularly the skill sets required in the new digital era?
A: If we think about a factory, I think processes or technologies that increase capacity, like the Adaptive Test technology example I mentioned – machine learning through test results on high-speed lines learning how to modify or adapt the test process based on what the testers are seeing versus a static test-script – will be adopted more extensively. If we can compress the cycle time or the tact time on the line, we can produce more with the same amount of resources and fixed costs.
In terms of the workforce, in many industries we’re seeing more adoption of automation technologies like co-bots where humans interact with robots on the line to increase the quality of the product and reduce people’s exposure to some processes that are less safe than others. In some parts of the world, where the global economy is so strong that it’s actually challenging to hire labor on the line, companies are automating not to take labor out, but to be able to deal with a labor shortage. The challenges I see are more about skill set changes than reducing direct labor. Now you see direct labor on the line routinely having to interact with and operate complex machinery, looking at and operating machines through touch-screens or monitoring processes through touch-screens, versus hands-on, nuts-and-bolts manufacturing. It’s increasing the level of technical interaction with direct labor so it becomes even more important to develop these new sets of skills.
“We’re quickly able to share best practices around the network and around the world. That type of collaborative ingenuity is part of the foundation of the process.”
Q: Are new digital technologies, especially their ability to exchange information rapidly among supply chain partners, changing how supply networks operate?
A: I think it can be a real value-add and help you leverage the value that your supply base and your partners bring to your business model. But it can also be a hindrance. I’ll explain what I mean by that.
At Cisco we are highly interconnected, on a technology basis, to all of our contract manufacturing partners. The volume and the spread of parts is so significant that there’s no way to be able to do it manually. We’re trading information and demand signals, back and forth every second with our partner base. We’re getting the right information, at the right place, at the right time to allow them to do the part of the value chain that they need to do. Likewise, we get instantaneous results on tests, and all that is fed back into the company, to the people who monitor that remotely. If you can leverage the technology, connect them in, and really treat your supply chain partners as one of the team, and not necessarily hold them at arm’s length as in the past, I think you have a better opportunity to leverage the value that you brought the partners on the team for in the first place.
Conversely to that, in terms of hindrance, if you’re a company and you’re investing in these types of manufacturing and supply chain technologies, and your partners are not, I think you’re actually minimizing the value of the investment that you’re making. You have some choices to make about strategic partners versus ones that are not so strategic, and people make those decisions in many different ways. Getting people, in terms of partners, on your team and leveraging them, I think, is key if you’re going to go all-in and leverage partners in your supply chain versus being totally vertically oriented.
Q: What actions can a company take to level that supply chain playing field in terms of digital maturity?
A: Manufacturing 4.0 can have the effect of flattening the supply chain versus the historical hierarchy that existed in the past, when it was a case of, “I’m the customer and you’re the supplier, and then you’re the sub-tier supplier, and there’s a sub-sub-tier supplier.”
With information changing and flowing so quickly and dynamically, the supply chain, in my view, tends to get more flattened out. One of the things to do to leverage that is to treat your strategic suppliers more as part of the team. From a long-term planning perspective, in the past, maybe you held some of your strategies a little closer to your chest. Now you need to be willing, under the right conditions, to share some of that, so that your partners can be making strategic investments with you.
From the supplier’s perspective, trying to partner strategically as much as you can and connect with your customer at the systems and process level may be more difficult to do at first, but you become more sticky, as a supplier, in terms of the business relationship, and it creates more of a win-win between you and your partner.
“I think that’s where a lot of the innovation will be in the future, beyond 4.0 and the Industrial Internet of Things, on how to keep everything in the business environment in equilibrium.”
Q: How important is the need to make that supply and production network more sustainable in the future?
A: We want to be a role model in ecosystem leadership for others to look towards. So, we’re now working on realizing a number of aspirations all connected to a Circular Economy approach. That’s where all our products and packaging are grounded in a circular design so things can be reused, beyond just the packaging. We’re also working on a goal of building all our products at zero-waste factories. And that’s not conceptual; there are already factories in our network that are net-zero emitting to the environment, as well as zero-waste generation. We’re also looking at establishing a world-class returns program. We are already very proficient in our forward supply chain and we are increasing our investment in resources and innovation in our reverse supply chain, again with the goal of zero-waste emitting. The goal is to reach a position where we can also help other people out with some of the lessons that we’ve learned so we can accelerate this concept of zero-waste much more broadly beyond Cisco and beyond our customers.
Q: What would you highlight as the greatest business challenges and opportunities for the manufacturing industry over the next 5 years?
A: The continued drive on innovation and how to take things to the next level is easier said than done. Sometimes, when you’ve been running a race, you want to take a rest, but we need to keep the profession moving forward for the different businesses and industries that we serve. We need to do it in a way that is much more agile than it’s been in the past or is today. We need to do it in a way that is responsible not only to the environment but responsible to the communities in which we operate. I think the world is becoming more appreciative of how fragile our ecosystems are, not just the planet, but also our communities and the communities that are still developing and need certain inputs that they’re not getting today. We have to keep the ecosystem in balance between our customers, our technology, the communities in which we operate, and the environment, and realize that it’s not a zero-sum game.
“If you’re a company investing in these types of manufacturing and supply chain technologies, and your partners are not, I think you’re actually minimizing the value of the investment that you’re making.”
Companies and business leaders, and certainly supply chain teams, are becoming more appreciative of that fact and are looking at how to be more sustainable, in every sense of the word, for the long-haul. I think that’s where a lot of the innovation will be in the future, beyond 4.0 and the Industrial Internet of Things, on how to keep everything in the business environment in equilibrium. I think that is becoming more of a focus for our strategic leaders.
Q: What kinds of skills do you think the next generation of manufacturing leaders will need in that new era?
A: It always seems to be a challenge, in terms of where you spend your time as a leader, on keeping the business going, versus preparing the business for the future. More so now than ever, we need to make sure, as leaders, we’re spending the right amount of time on the future of the workforce. From the perspective of growing our teams, it’s about getting supply chain people who are proficient in one of our focused areas more exposed to the different parts of the supply chain, whether it’s quality, or engineering, or operations and production, or procurement, and so on. We need to make sure we’re rounding out people’s experiences and skill sets.
We also really need to spend time on diversity and inclusion. We need to make sure that we put our energy and our time where our vision statements are. At Cisco, for example, half of our leadership team is female, half male. We need to make sure that people come from a diverse set of backgrounds and circumstances, so we get those different viewpoints on the table and make the best decisions possible. Science tells us that the more diverse a team, the better the decisions are going to be. And we have to have more role models, so no matter what your background or your gender, you can see the path forward for you. I think there’s enough literature out there to say that, as much as we talk about diversity and inclusion, we’re still at the very early part of this transformation. The concepts are out there, the visions are certainly out there, but I think all of us need to do more and continue to drive the action side of that to get the result we’re aiming for.
Q: Finally, if you had to focus on one thing as a watchword for the future of manufacturing, what would that be?
A: If I had a catchphrase around the future of manufacturing, and I’m very excited about everything that’s happening in manufacturing and operations and the supply chain today, it would be, “You ain’t seen nothin’ yet!”
If you consider where manufacturing has come from and you look at some of the things that we manufacture and take for granted today, like a jet engine, an airplane, or computing and electronics over the last 50 years, and you realize how far some of those technologies or manufacturing processes have come, can you just imagine where we’ll be, from a manufacturing capability standpoint, 50 years from now? Sometimes I just have to pause for a moment when I think about that. There’s a lot left to do, of course, but I think we’re all going to be amazed at what we can achieve in the future. M
FACT FILE: Cisco Systems
HQ: San Jose, CA
Business Sector: Networking Technology
Revenues: $51.9 billion (2019)
Net Income: $11.62 billion (2019)
Production: Subcontracted: 4 Strategic Partners Worldwide
Title: Senior Vice President, Global Manufacturing & Logistics, Cisco Systems
Education: B.S. degree in Business Administration, University of Arizona; Master’s degree in Aerospace Management, Embry-Riddle Aeronautical University
Languages: English, Spanish
Previous Roles Include:
– Senior Vice President, Global Operations & Procurement, ABB, Switzerland
– Vice President, Global Operations, Honeywell Transportation Systems, Switzerland
– Vice President, Global Strategy & Integration/Transition, Honeywell Aerospace
– Vice President, Manufacturing Strategy, Honeywell Aerospace
– Global Supply Chain Strategy & Transitions Leader, Honeywell Aerospace
– Plant Manager, Albuquerque, New Mexico, Honeywell Aerospace
– Sourcing Director, Electronics & Mechanical, Honeywell International
– Director, Global Supply Chain Operations & Global Procurement, Planar Systems
– Director, Americas Sales Operations, Planar Systems
– Major, US Air Force
Other Industry Roles and Awards:
– Member, Manufacturing Leadership Council