Transcript #04 Industry 4.0 and Diversity Part 1 – Industry Trends with Roxane Desmicht Head of Supply Chain at Infineon

Time stamp Speaker Answer Key words
00:00 Radu Hello everybody and welcome to our fourth episode of Leaders in Supply Chain & Logistics podcast. We are happy to have together with us today Roxane Desmicht, Head of Supply Chain for the Asia-Pacific region at Infineon. Roxane is a top influencer in the industry. A frequent speaker at supply chain events and has many interesting case studies to share with us today around supply chain in Asia and globally. Roxane, welcome and it’s a pleasure to have you. Roxane Desmicht, Infineon
Roxane Thank you, Radu, for having me here today. I guess with all the lined up questions, we will have quite an engaging conversation.
1:12 Radu Thank you. Indeed. I look forward to it. As usually, we follow more or less follow the same patterns in our podcast so we’ll start with questions related to the industry: supply chain 4.0, latest trends, technologies, interesting case studies at Infineon. We’ll move in to talent, skill sets, career development questions and we’ll finish with a couple of personal sharing you might have for our audience. Let’s start. Maybe if you can just briefly introduce yourself, Roxane, a little bit further and tell our audience who you are and what you’ve done. questions, introduce
1:49 Roxane I’ve been in Asia for about more than ten years and somehow it’s the same as my career in supply chain. Originally, I have a technical background; I’m an engineer. I started my career as a product engineer. All along in the hi-tech industry to get some more management responsibility. Moved to China before moving to Singapore. Maybe I should first give a short introduction about Infineon, in case people do not know us which is very often since we focus B2B business. We are an hi-tech company in the semiconductor industry. We offer products and systems which make your life easier, safer, and greener. If you have to remember something from today, maybe you should recall that your life is very miserable without our solution.


Let me go straight with a couple of examples. No Facebook without semiconductor because there would be no server with enough power to store and transact all your information; no mobile phone; no Tap Pay when you enter the MRT; and of course, the most important, no smart car to protect your life when you are on the road. Very embedded in our daily life. We are a German company headquartered in Munich. Worth about €6.5 billion. Singapore is the home of our second largest supply chain footprint. In Singapore, we have our Global Logistic Hub for the region and other couple of functions. We have manufacturing here looking at the global test competence. We have a design center.


We have different divisions. Like you could capture from a server to automotive. And this means different business model. Automotive, being more long term forecasting long product life cycle. Whereas some of our security division, it’s a lot of bidding business which indirectly brings a lot of different challenges from the supply chain perspective since we cannot handle the same way.


In terms of product category, we have commodity product which is a small portion of our portfolio. Huge portion which is more application specific and smaller portion in terms of commodity. So this is a bit to set the theme in terms of supply chain. In Singapore and in the region, I have around about 300 people in 6 different countries. Either closer to our customer or closer to our manufacturing sites.


We have a good blend of regional responsibility and global responsibility so typically if I illustrate, global responsibility would be on supply planning since it’s not regional specific. More regional responsibility would be exacting the customer interaction. On top of this, at Infineon supply chain, we have the exotic aspect of hosting manufacturing IT.

B2B, I-tech, semiconductor, global logistic hub, Munich, Singapore, worth, manufacturing IT, automotive
5:47 Roxane Which is pretty unique. So, we don’t have purchasing but we have manufacturing IT. And this gives us quite a lot of opportunity to maybe guide a better plan to make integration.


And that’s why when we talk about Industry 4.0 and the connection between the smart factory and the smart supply chain gives us quite a lot of opportunity of joint project. And in need for Singapore, we have set somewhere last year smart enterprise project.

Unique, industry 4.0, smart
6:25 Roxane Which is to help us perform our local site into a smart enterprise. Smart enterprise
6:31 Radu Impressive. Indeed, that’s not a typical supply chain setup. I’m sure that the audience will want to know more about it.  Super.
6:39 Roxane Yes, if we try to know more about it. Looking at some of our case study, we do have currently a project which we call “global production network.” Global production network
6:52 Roxane Which has a purpose to connect all our manufacturing site together. Manufacturing site be it our internal site as well as our outsourcing partner for better supply chain visibility and supply chain control in real time. This is typically one of those projects where I do understand the value of having manufacturing IT in supply chain… Connect, manufacturing, outsourcing, visibility, control
7:19 Roxane In contrast to supply chain IT. Supply chain
7:22 Roxane So supply chain IT is still part of IT. Supply chain
7:25 Radu And I mean there’s a lot of talk about that and I think a lot of companies are trying to do that.

Visibility is a big thing.

Going digital is a big thing. Definitely interesting and I’m good to hear that you’re making advanced steps to integrate. Actually, that brings us to the question because I wanted to…it can be about this, it can be others as well but the question was more or less, if you can share one or two case that is where you’ve achieved already what you’ve done so far in terms of supply chain transformation and maybe with some examples in data in terms of what you managed to do already in Infineon because they’re quite advanced and I’m sure you have lots to share.

Digital, case, transformation
8:02 Roxane So our global production network, which I quoted before, is more to prep ourselves for the future. We needed to lay some foundation before going into such a project.


One of those definitely to gain more efficiency was our Lean planning project, which was completed somewhere in the middle of 2012. To be very honest, this was our third attempt in planning re-engineering. But finally, the third attempt was successful so to the audience, never give up. Be resilient.


At one point in time, you will find the right entry point on the organization will be prepared to move forward. And this Lean planning project took the stands at we should plan at different level depending on the time horizon. Being very precise in the short term…

Future, global, Lean, network
9:04 Roxane And for us, short term would be about 6 months since our manufacturing cycle plan is fairly long. And being more aggregated means, we meet long term and this has helped us to gain efficiency in terms of resources… Cycle, resources
9:24 Roxane In terms of time we spend on planning. The short term can be updated every day. The midterm is now moved to a quarterly update whereas in the past, we will address updating the time horizon every single month knowing that on the day you do planning, it’s immediately obsolete the following day. Planning, obsolete
9:44 Radu  Absolutely.
9:46 Roxane Definitely getting a lot of speed. Data aggregated in a different level in the short term and in the midterm which helps you also to be more accurate because the aggregations a better chance to be accurate. Doing some portion of data being meant for capacity planning and invest reservation before we really do the execution. Speed, data, aggregate, capacity, planning
10:13 Roxane So this has transformed the whole organization. Another important aspect of this is in the past, there was a lot of different system which we were using to do planning. Sales was using one; Marketing, another one; Finance, another one and you can be sure… System, organization
10:33 Roxane The data never tally. Finally, we have now one system where everybody can look from a different angle. If you want to do your revenue forecast, you look from a revenue angle. If you want to view your capacity forecast, you look from another angle but it’s all within one system. Data, revenue, capacity, forecast
10:52 Roxane Which in fact we could have locked with one of our system provider… System provider
10:57 Radu Super.
10:58 Roxane Which is now a convention solution. Solution
11:01 Radu Absolutely. It’s a win-win for you as well for them because they can sell the same solution that the company  .
11:04 Roxane Exactly. So that was definitely one of the important first step into our overall supply chain integration approach. Integration
11:15 Radu Just to go one question further, how did you do it? Because that’s the conundrum or that’s the difficulty I think that most people face. How do you align sales and marketing and timing and this and that. How do you get together all the stakeholders that have other things to do that don’t bother sometimes about it, right? How, align, stakeholders
11:33 Roxane I think the reason why it worked this time around was definitely it was quoted as a lighthouse project with Infineon board attention. Lighthouse, project
11:44 Radu Okay.
11:46 Roxane So that immediately helps you to be on the agenda of everybody. I think the gap we had in the past between the revenue forecast and the manufacturing forecast was always creating a lot of conflict and everybody wanted was quite motivated to make sure this tally so that we would not spend time just to align the data but spend more time in value add activities. Agenda, forecast, conflict, value
12:16 Radu Good. And you told me it helps to get the board to give the key stakeholder involved; the CEO or president to drive it because it typically sends a good message to everybody. It’s important. CEO, president
12:27 Roxane  And so as a compliment to this what works for this project and what works more on the other project I wanted to bring up which is what we call, “one interface to the customer” which was a project coming up after the acquisition we had in 2015 of an external company.


And this purpose of the project was really to make sure that from a customer side they would have a seamless perspective even though the internal processes might still be different. I don’t call this project for the detail of it because that would not be of too much use but I think this project was successful because we had a very systematic and rigorous change management approach.


Which is often what we fail when we engage in big projects. We neglect the reaching out of the organization with the various stakeholders. This helped our lean planning but lean planning we are not entirely mature with OITC. We really had within the project a full track just responsible for change management going in the area of newsletters, regular webinars, trainings depending on the ranking in the organization and the need for very adaptive communication and this made this project extremely successful because when we rolled out, everybody was ready including our customer.

One, interface, acquisition, change, OITC, adaptive
14:00 Radu Perfect. Ideal scenario, actually.
14:02 Roxane I didn’t see a lot but really not so much on the contents. Really much on the change managements and moving forward, all our big projects have now systematically change management tracked. Change, management
14:14 Roxane This is one of the learnings from our past experience. Learnings
14:17 Radu And it’s an excellent point. It’s a case study that a lot of DMV’s quote and there’s so many unsuccessful transformations and typically where it fails, because change management is not done because people are not on board. Nobody bothers to ask for their opinion. They don’t really listen to. They sabotage the change. So that’s actually a big thing…change management. Change, management
14:45 Roxane We were tracking every quarter. You know this curve of change where you are in denial, when you are in despair by survey. So we were in fact surveying the audience and participants. And so we were really monitoring to make sure that everybody was moving up to the engagement phase. Survey, monitoring, engagement
15:07 Radu Next question would be in terms of technology. So I think technology’s transforming supply chain. It’s all over the world. It’s probably speeding up a lot the process of transformation. Which technology trend in supply chain will likely make the most impact by 2020 in your opinion? Technology, transformation, trend
15:27 Roxane From my perspective, I think we talked a little bit before about those visibility platforms. Visibility platform as in manufacturing visibility which is what I quoted as our “global production network program.” As well as the transport; inter-company shipment.


Transport to customer visibility platform. In order to manage risk more effectively and efficiently than today, in order as well to gain cost benefit because you are more transparent view and how much you spend for different activities. In terms of reactivity, because those platforms are meant to give you real time information whereas most of us today we are data based company so most of the information you have are always one day late.

Visibility, global, transport, risk
16:28 Roxane And if you are in our case where we have our headquarters in Germany where most of the report are refreshed in the morning Germany time, Then we have even more than one day gone.


So this is really something which I see will become more and more important. Particularly with globalization so more and more company are relying with working along a very fragmented network. And those platform should help to get everybody on the same page at any point in time. So this is one.


The second which I am a strong believer in is big data and analytics. Not only big data. So everybody talks about big data. Big data is only used as foundation. It’s useless if you don’t have analytics and everybody should also understand that the analytics is also a need in the beginning.


So the analytics helps you to build a storyline. That helps engineer on the supply chain planner to drill down to why this KPI is failing or if we take this example. This will give you a lot more proactiveness. Maybe becoming more and more predictive instead of only being reactive and explaining the past. So looking at explaining the future.

Germany, report, fragmented, platform, analytics, proactiveness, big data
17:50 Radu Super. Great examples and thank you for that. What does Supply Chain 4.0 mean to you? What is supply chain of the future? What does it mean to you? Supply, chain, 4.0
18:06 Roxane We are a German company so we’ll bring it to Industry 4.0. Industry, 4.0
18:13 Roxane Of course we are a very active player…we were a very active player in the definition of the Industry 4.0 framework. I like this quote from Doctor Kegel, the CEO of Pepperl+Fuchs, which says Germany normally is not very good at marketing but for Industry 4.0, they did a super job since it has been broadly adapted and then cascaded down to Supply Chain 4.0.


Within Infineon, we do have Industry 4.0 framework which include Bose, our factory. So smart factory as well as smart supply chain. And it’s all talking about digitalization in all the area we cover and digitization from looking at information, knowledge, prediction, and up to automated decision as and when appropriate. So it’s also another point to go for automated decision for everything.

Industry, 4.0, Kegel, Germany, Supply, Chain, digitalization, smart
19:16 Radu Absolutely,  .
19:17 Roxane You really have to make sure you know where you want to drive. We want on our side to leverage more on the data we collect so that we can get knowledge, we can optimize our processes. We will introduce robotics as and when appropriate because robotics remains quite expensive so you need really to make sure you have your return on investment and you need to sort through where exactly you need robotics. Being connected within our supply chain. So internally, typically visibility platform will be on the media as well as with our customer and suppliers. And of course, we are always thinking of having a digital workplace which means more and more information gathered and delivered to the individual instead of manual report, manual data extraction, widespread use of Excel. Leverage, data, processes, robotics, visibility
20:15 Roxane But in all that we do, supply chain 4.0 should be with a purpose. Our purpose is really to improve productivity, to improve speed, and to improve quality. Moving forward, within this framework we are defined. We will define a couple of projects along different angle of our supply chain that each project will have a return on investment. Supply, chain, 4.0, improve, purpose
20:42 Roxane Again, it’s not about starting all over the place. It’s really privatizing where you can have the best gain. Privatizing
20:51 Radu It’s about being pragmatic. It is a business. The business makes money. And that’s actually an excellent point because there’s a lot of hype and even alongside technology, everybody is talking about artificial intelligence, then block chain, and this and that. Correct, but as of today and even maybe for the next three years if block chain will change a lot probably it will take time. Artificial intelligence will change a lot, definitely but it will take time. Pragmatic, hype, technology, block chain, artificial
21:18 Roxane Exactly.
21:18 Radu So in the mean time, we need to be…like you rightfully mentioned, focus on the things that will matter tomorrow, and then the day after tomorrow, and then in three years. Results need to come as you go. Not in five years, because it’s a little bit too long for any business. Focus, results
21:34 Roxane But it’s good to have a plan to know to which level you want. We do it by looking at process by process. What and where we are today, which level do we want to achieve, by when… Process, level
21:47 Roxane For which purpose. And then drive the related project. And that’s how we will continue to transform our supply chain. Drive, transform, supply chain
21:55 Radu To get to that vision and to get to that Industry 4.0/Supply Chain 4.0, as of today, what is one or two of the biggest challenges that you face around getting there? Industry, supply chain, 4.0, challenges
22:08 Roxane As Infineon, we are definitely a spin-off of Siemens back in 1999, if I’m not mistaken. But being a spin-off means we have inherited a lot of legacy systems. And this makes it always very difficult to make change because we have to make sure if we want to remove a data feud.


Whether or not it’s feeding up in another database or in another system which is essential but which we might forget. So this transforming is really a challenge for us from our supply chain because whenever we would like to go to the final decision or the final solution, it’s always requires a longer period of time compared to starting from fresh because you need to sometimes make compromises down the road along the way till all your other legacy system are either removed or replaced.


So this definitely is one of critical points. Additionally, we have been traditionally in-house manufacturing which is the value we bring to our customer because we believe we have the competitive advantage when it comes to our manufacturing capability. However, looking at the need for flexibility to cover our forecasting accuracy, we are now leveraging more and more with outsourcing partners.


This means our supply chain is steadily transforming into a supply network. Then the challenge is how to manage our supply network as efficiently as you used to manage your own. Our big picture is to manage our supply chain as a global virtual factory. We believe we manage the factory very well.


We want to manage a global virtual factory also very well. But this is where we need to have a couple of projects or global collection network being one of those to be able to achieve this big picture.

Infineon, Siemens, legacy, critical, manufacturing, flexibility, forecasting, outsourcing, leveraging, transform, global, virtual, network
24:24 Radu  How about another buzzword, it’s actually not a buzzword, it’s another technology that is deeply interesting for a lot of people. Internet of Things; connectivity. How are you currently using any IoT solutions to your supply chain? Buzzword, IoT, Internet of Things
24:42 Roxane We use IoT mainly in our manufacturing area. Of course we have the wish to try to adopt some of the methodology which is using manufacturing for supply chain. In supply chain today, the best example


I could quote maybe is our mobile data entry. But whether it’s really qualified as IoT devices, I’m not completely sure. What we have in plan mainly for warehouse is to introduce global cargo tracking within the warehouse premises using Bluetooth beacon and intelligent sticker. This is really to make sure that we know at any point in time where the cargo is positioned so that when the porter comes to pick, the picking process is quite efficient.


This is one in the planned project to introduce IoT. Another will be to look at heat map again in the warehouse. Tracking the mobile data entry for example, the flow of goods or the movements of pick-up. So that down the road we move unnecessary steps the picker is taking so that we improve productivity. But this is really at a very early stage at this point in time.

IoT, manufacturing, mobile, data, devices, productivity
26:17 Roxane We are leveraging from the experience we have in manufacturing. So typically, we introduce in manufacturing mobile devices a couple of months ago. Where the information is pushed to the operator which has reduced exactly the travelling from the operator within the factory premises along the same principles that’s what we would like to look at for warehouse. Manufacturing, devices, mobile
26:41 Radu Like we discussed before, baby steps with returns of investment and then you would eventually get it. Good question and I’d like to ask this question. I think we had this in the first podcast as well. It’s back to the fundamentals as well. It goes like, before investing hundreds of thousands of dollars in digital new tech and so on and so forth, what do you still consider or what’s the fundamentals that supply chain needs to have in today’s environment? What’s the real basics? Investment, fundamentals, basics
27:08 Roxane The basic is standardization. You need to make sure you have clean data. That they are stored somewhere. That they are representative of what is happening. Not fake data. You need to have very well documented processes and as much as possible, digital connection particularly with your customer or your supplier or within your premises so that you avoid as much as possible manual intervention and have them data which are definitely cleaner than manual intervention. To grow further, I think you need to have a systematic process to address your gaps. Standardization, basic, data, processes, digital
27:55 Roxane Prioritize drive improvement accordingly and what I am a strong believer of is, you should not fall in the trap to believe that software will solve all the problem. Which is usually what people tend to do because of course this is the easiest thing to do. But software will only help in the process which is behind the software in skill and if the software can rely on data which are representative. Drive, improvement, software
28:33 Radu Absolutely.
28:34 Roxane Software is really the least of your challenges and we do it all the time. Like I said, I’m responsible for manufacturing IT. I can see that we are always jumping into the solution before discussing about the process and what is it that we want to achieve. Software, manufacturing, solution
28:57 Radu It’s a common thing like going back to big data. Big data, is it important? Yes and no. Yes, definitely it’s important but unless you have the analytics to properly analyze it, it’s just as good as anything else. Valid point. Final question on the segment. If you would be an investor and had lots and lots of money, which supply chain related start-up would you invest in and why? Big, data, analytics, startup
29:27 Roxane Well, I think there is still a huge untapped potential in data analytics. Any startup which is playing in that field will be of relevance because there is a lot of untapped potential in data to create knowledge, prediction, and of course down the road, automated decision.


At this moment, there is no one fit for all solution and that’s where the value of leveraging a startup which might have a very specific domain knowledge. And if you are an investor investing in this domain knowledge, we’ll help to somehow bring up more and more big data analytic solution.

Down the road there might be some consolidation but at this point in time, we should try to invest as wide as possible since some very critical solution surface.


So this is one. Then like we discussed before, I think visibility and connectivity platform, particularly connectivity platform, because there is more and more trend to have outsourcing or even from our side our customer are also now more and more keen that we use our supplier. All good but if you…

Potential, analytics, startup, leveraging, connectivity, platform
30:52 Radu How do you plug it in?  .
30:53 Roxane How do you plug it in except by having a human to intervene. And this is, if we want to look at productivity, this is definitely counterproductive. productivity
31:01 Radu Not really an option,  .
31:03 Roxane So that’s why I think Zeus company which have a solution in the area of visibility and connectivity will be worth considering. Zeus, visibility, connectivity


End of part 1



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