Resilinc Customer Case Study: Excerpt from Supply & Demand Chain Executive Article Featuring an Interview with Steve Cleary, CPO of EMC
Excerpt from article in Supply & Demand Chain Executive, March 2013, titled “Adopt an Offensive Approach to Risk Resiliency”, by Natalia Kosk.
The natural disaster [in Thailand] had perhaps the most severe supply chain impact to the disk drive and storage industry as reports followed months after, even up to a year, regarding some of the manufacturer’s difficult bounce back to the economy after its impact. But because of the country’s annual monsoon season, some manufacturers such as EMC were more than prepared to act on any impacts to its supply chain.
“The Thailand flood wasn’t a surprise,” confirmed Steve Cleary, Vice President of Supply Chain and Chief Procurement Officer, EMC. “Of some of the natural disasters that occur in the world, the tsunami was certainly unpredicted. But the Thailand flood built over the course of two or three months. As we saw the crisis start to emerge, we got in extra orders and we ended up relying on very strong partnerships we have with our key suppliers that really helped us through that event. We had weekly reports of where the water was and what the water was doing and whether we thought it was going to hit the factories. I can’t say that we had zero disruption as a result of that Thailand flood. We had shipment delays in the beginning of the quarter as a result of this, but by the end of the quarter we had satisfied all of our system-level demands. The industry recovered a lot quicker than most people thought.”
While Cleary confirmed EMC did grow through that quarter and had record revenue shipments, still a number of its peer groups in the area did announce shortfalls and shortages.
“I think what was a surprise and what we have done differently going forward with some of our partners is we’re more involved in getting into second and third tier aspects of our supply chain,” added Cleary. “Where we were looking at direct components that we use in the manufacturing of our products, what we weren’t doing necessarily as aggressively as we are now is with some of the second and third tiers to the component suppliers. So we are much more focused on having folks take us through their business continuity plan as it relates to a motor in a product or perhaps even the magnetic in that motor that might have been single sourced. So what are the plans? What are the mitigation strategies, should there be a disaster, that the second tier or third tier supply chains are protected? That is something we have put more focus on as a result of the flooding,” he said.
“Resilinc also offers their dashboard, which is built very tailored to our supply chain,” said Cleary. “So once we say ‘map 400 factories around the world that are providing things into our supply chain and all the risk variables associated with them,’ what they’ll do is monitor those 400 specific sites for us and we will get daily alerts as to events that are happening or emerging events that may be of concern. And so that kind of a dashboard too is very critical to us because even if we were to be able to get to that basic level and understand what the exact addresses are of each of our 400 factories and what their risk profile is, monitoring those on a daily basis is again, a very large activity,” he explained.
While the IT storage hardware solutions provider already had risk mitigation strategies in place—such as its business continuity plan (BCP), supply chain disruption disaster simulations implemented annually at its partner sites and buffer inventory—it stressed the importance of incorporating all BCP plan, risk mitigation and anticipatory strategies holistically and from the ground up.
“When we first started to look at developing a platform and not just having a set of discrete capabilities, it became pretty obvious to us that it was a major endeavor and it was a significant investment in resources,” said Cleary. “The issue with these types of systems is, once you create them, you have to feed them and take care of them. I think that anybody who seriously takes a look at it in a thoughtful way and really tries to understand what it would take to do it internally, would probably come to the conclusion that this is an outsourced opportunity.”
Engaged with Resilinc as of Q4 of 2012, EMC expects to have 95 percent of its 400-plus sites mapped by Resilinc by the end of 2013.
“What Resilinc provides is really what we need to facilitate this bottoms-up approach—they provide us with the resources to help us build the data out and help us understand the data,” Cleary added. “And so it really becomes not only just a platform but an offshoot and a resource bank of people to help us collect and analyze the data that we would have had to build internally. Their business motto is they can do it more efficiently across a number of supply chains. Being able to leverage that back and forth is of huge value to somebody like EMC.”