COVID-19 Is Opportunity to Digitally Transform Supply Chains: Foxconn Vice Chair
Companies need to be more agile in digitalizing the global supply chain to turn the challenges imposed by the pandemic into business opportunities, Foxconn Technology Group’s vice chairman said.
“Changes in the supply chain and market demand have challenged the company to reluctantly face a ‘New Normal.’ Foxconn has been balancing its global operations so the company always operates with a great agility to reconfigure its operations to minimize risk,” Jay Lee, vice chairman of the Taiwanese multinational electronics contract manufacturer, said in an email interview with Korea’s Maeil Business Newspaper.
Based in New Taipei City, Foxconn is the world’s largest contract manufacturer of electronics and the biggest supplier of Apple products including the iPhone.
In addition to his role as Foxconn’s vice chairman, Lee serves as a distinguished professor of advanced manufacturing at the University of Cincinnati and is a member of the Global Future Council on Production at the World Economic Forum. Last year, he was one of the speakers at the World Knowledge Forum, Asia’s largest business forum hosted by Maekyung Media Group.
The COVID-19 pandemic has proven disruptive to all companies as well as the global supply chain system, Lee said.
“(The pandemic) reset a new baseline with constraints for many businesses including cash flow, materials flow and people flow. In some businesses, a change of suppliers has also involved time constraints in adaptation and certification,” he said.
A digital platform for data exchange with remote auditing is becoming a new mechanism, Lee noted, and added that more advances are needed to adopt more digitally connected automation with smart reconfiguration capabilities.
“We have to accelerate the digital transformation as well as tolerate the traditional systems to balance its robustness,” he said.
Lee pointed out that issues on border and export control during COVID-19 have also added great complexity in supply chain operations. “With the changes and uncertainties of the current trade war, more flexibility and resilience are needed for future global and regional operations,” Lee said.
Lee expected recovery from COVID-19 to be slow. But instead of focusing on the damages, he urged businesses to adapt to the changes to uncover new business opportunities. For example, he said Foxconn reconfigured its U.S. plant in Wisconsin, originally set to make liquid crystal display panels, to produce masks and ventilators to meet community needs.
Lee saw global companies as having the leverage to use their global resources to overcome challenges and spearhead change. “A global company needs to be a ‘catalyst’ to cultivate new breeds of workforce to tackle any challenges we are facing,” he said.
With its seven core technological areas – including cloud, mobile, internet of things, big data, industrial artificial intelligence, 5G and robotics – Foxconn is well positioned for its next strategic transformation, from its focus on efficiency and teaming to digital transformation to new business in electric vehicles and medical and healthcare, Lee explained.
“COVID-19 has made Foxconn enter the medical business sooner than planned. It shows its speed and agility for adapting to new challenges and opportunities,” Lee said.
By Yoon Won-sup, Yoo Joon-ho and Kim Hyo-jin