As a tech analyst, I am always on the lookout for new, innovative companies to track that are making a difference in technology. Sometimes new actually means new, but many times it means new to the general public—companies who have flown under the radar, but nevertheless became incredibly successful at what they do. One tech company is Flex—a $26B electronics manufacturing services and supply chain logistics company that sits pretty on the Global Fortune 500 list. Ever heard of it? If not, you’re probably not alone. Today I wanted to provide an introduction to the company for the unfamiliar because it’s a company that has gotten increasingly important during the ongoing global COVID-19 crisis and is vital to tech. Let’s take a closer look.
Flex was initially founded way back in 1969, under the moniker Flextronics, Inc., in Silicon Valley. Its original charter was to provide overflow manufacturing of printed circuit boards for companies based in Silicon Valley. Over the next several decades, the company broadened its scope to become a contract electronics manufacturing firm, pioneering automated manufacturing techniques, and becoming the first American manufacturer to construct an offshore manufacturing facility in Singapore. Through the acquisition of other manufacturers, Flextronics expanded its global footprint to become the third-largest electronics manufacturing services and original design manufacture company in the world (in terms of revenue, as of 2017). It now boasts manufacturing operations in 30+ countries and employs roughly 160,000 people. In 2015, the company shortened its name to Flex.
Flex’s mission statements are as follows:
· “Make great products for our customers that create value and improve people’s lives.”
· “Steward sustainable manufacturing and operations practices to minimize environmental impact.”
To do this, it employs many advanced manufacturing techniques, including automation and robotics, simulation and software and additive manufacturing. Flex plays in quite a few areas, providing complete design, engineering, and manufacturing services to fields including aerospace, automotive, computing, industrial, consumer, infrastructure, medical, and more. CEO Revathi Advaithi put it succinctly this way: “Name an end market—we probably are in it.”
Of particular importance at this current global moment is its involvement in the medical sector, where it claims a spot in the Top 15 global manufacturers of medical devices. Unless you’ve been living under a rock, you probably have heard about the potential shortages of life-saving ventilators in hospitals overloaded with critical COVID-19 patients. Turns out Flex makes those—furthermore, the company says that this year alone, it will manufacture over 35,000 of these ventilators. That is more than the total amount of ventilators built by all the other global manufacturers last year combined. Other crucial medical products Flex manufactures include oxygenators, patient monitors, testing equipment, and ICU-related necessities. In the case of its five different ventilator programs, the company says it ramped up and starting shipping units in five weeks—much quicker than the traditional 9-18 months it usually takes to bring new medical technology to bear. Given the urgency of the crisis, the company’s expedition of the process is crucial.
Flex’s COVID-19 strategy
Fortune recently published a great interview with CEO Revathi Advaithi, in which she explained her company’s response to the current pandemic. She stressed the fact that her number one concern during the crisis is her employees’ health and safety. Most of Flex’s workforce are factory workers, a demographic that is particularly susceptible to spreading the virus due to their often-close proximity to each other on factory floors. However, given the essential work Flex is doing to aid the relief efforts, simply closing down for a few months really wasn’t an option.
Instead, the company says it invested significant resources into employee protection protocols. In January, Flex implemented its contingency and resiliency plan, which included the creation of 24/7 war rooms across its various regions and biweekly CEO briefings on the crisis. The first order of business was ensuring employee health and safety so that they could safely get back to work. The company implemented a wide range of employee safety measures, including physical separations of workstations, temperature screenings, the providing of personal protective equipment (PPE), restrictions on travel and visitors, isolation protocols, and the sterilization of all work and common areas, as well as HVAC systems. According to Advaithi, Flex bases its measures on sources such as the CDC and the WHO. For that matter, the company even has epidemiologists under contract to aid with scenario-planning and virus preparation. According to Advaithi, this helps the company quickly adjust to decreases or increases in demand. With all these safety measures in place, Flex has been able to get over 90% of its employees back to work.
The company did experience some disruptions to its operations in China. However, it was able to use the experience to quickly develop a playbook it could replicate globally to mitigate and manage the difficulties as the virus progressed to other regions. To manage supply chains during this challenging time, Flex had to be involved in daily collaboration with its customers and suppliers. This included C-level engagement with its partners, who were critically impacted by the pandemic. Additionally, the company flagged all origin components sourced from China, Italy, Japan, and Korea, to reconfirm lead time, and reached out to its equipment suppliers to reconfirm ramp readiness. It also put effort into researching alternative supply sources, if any of their original sources were unable to meet demand in a timely fashion. Additionally, Flex says it worked to secure freight capacity for its components, from all the major carriers, planning alternative routes when necessary.
Looking forward to the next crisis, one proposed method to lessen future supply chain disruptions is regionalization—sourcing all components closer to the consumer instead of spread out across factories across the globe. While regionalization may not always be feasible for any given circumstance, Advaithi says Flex is helping its customers “rethink their supply chain strategy” to achieve more resiliency for dealing with future disruptive events. Advaithi touted Flex’s position and its unique ability to recognize trends early, thanks to its position on the value chain and the wide range of markets it plays in. For that matter, Flex has a vast footprint that spans (directly and indirectly) almost every country on the globe. This further enables the company to see early data in specific regions, mine it for insights, and use it to anticipate demand, helping shape customer and supplier behavior accordingly.
According to Flex, the company’s overall long-term growth strategy focuses on six specific sectors where it believes it can differentiate and be successful: CEC, Lifestyle, Consumer Devices, Industrial, Automotive and Health Solutions. Within those sectors, Flex says it will focus only on sub-areas in which it has a technology value proposition for the customer.
Flex maintains that its success in these areas will hinge on having a focused strategy and end-to-end customer value chain ownership. This focused strategy includes identifying high-value opportunities for its customers, driving execution, and utilizing successes to drive further expansion for the company.
The company is also in the midst of revamping its operating model, which it divides into two segments: Flex Agility Solutions and Flex Reliability Solutions. The former, Flex says, is optimized for speed-to-market at any volume. It employs an efficient cost structure and is geared towards products with shorter lifecycles. Meanwhile, the latter is geared towards products with longer lifespans and specialized production models, that operate in critical environments.
I will dive more deeply into its strategy in follow-up writing, but I like the segmented approach as it’s the best way to serve value and volume customers.
Though Flex tends to stay out of the spotlight, as a company responsible for manufacturing crucial medical devices and managing supply chains, one could argue that it is one of the more essential businesses in operation at the moment. And that’s just one sector, of many, that Flex is involved in. All in all, I’m impressed by Flex and CEO Revathi Advaithi’s strategy surrounding the COVID-19 crisis—meticulous and proactive, with a decided emphasis on worker health and safety—as well as its overall long-term growth strategy. Keep up the good work, Flex—we need you.
Note: Moor Insights & Strategy writers and editors may have contributed to this article.