Silicon Valley Watcher - Former FT journalist Tom Foremski reporting from the intersection of technology and media

Jabil Opens Blue Sky Innovation Center in San Jose For Showcasing Gizmos And Gadgets But The Story Is In The Supply Chain

Posted by Tom Foremski - May 1, 2015

WallScreen

A demo of the "Capabilities Wall" at Jabil's Blue Sky Center in San Jose.

Jabil, the nearly $20 billion manufacturer of a huge range of electronic gadgets, unveiled its Blue Sky Innovation Center in San Jose this week. I learned a lot about this outsourced electronics manufacturer and I was especially impressed by the sophisticated IT systems that it developed to manage incredibly complex supply chains and model the future performance of its global business operations.

Jabil makes products that you've probably used without knowing anything about its 90 locations around the world. It is similar to Foxconn in Taiwan, making a huge variety of electronics products for well known  brands.

The opening of the Blue Sky Center was an opportunity for Jabil to step out from the shadows and showcase its manufacturing prowess, and its new design and research services. Clients can hire Jabil to design the next generation of mass consumer electronics products. However, it says it won't create its own lines of products, it has no intention of competing with its clients.

The company was founded in Detroit, making spark plugs. It has been manufacturing high tech products in Silicon Valley since 1996. 

Jabil says design cycles are continually shrinking which means its design and manufacturing capabilities have to speed up, too. It has developed its own IT systems so that it can manage massively complex supply chains, with an ability to quickly reconfigure them if weather or geo-political problems disrupt any part of the logistics chain. The lack of just one component could hold up a production line and delay millions of dollars in revenues. 

Managing a supply chain for a client such as Hewlett-Packard's printer division involves as many as 3,000 suppliers. Sourcing, ordering, delivering this many components to production lines just in time is a daily challenge. Unexpected disruptions to the supply chain can come at any time and from a multitude of sources, such as severe weather or killer earthquakes in Nepal.

Jabil hides the complexity with a software dashboard it calls "Control Tower," from which clients can spot problems and reconfigure their entire supply chain, with new suppliers if neccessary. It's a type of resiliance in the supply chain that is mirrored by the Internet, which can find new routes if parts of the network are damaged. "Control Tower" can find new routes to deliver the parts it needs it needs to fulfill its manufacturing contracts.  

Jabil also has developed powerful risk analysis tools and the ability to continually model emerging risks and possible effects on its operations. It is constantly looking out for potential business risks, it even uses sentiment analysis to search Twitter and other social media channels for signs of possible future problems in the economy, and in consumer markets. 

"It is better to know the risks than to run a business without knowing because then you can do something about it and you worry less," said  Eric Hoch, EVP of Engineering and Technology Services.

The Blue Sky Center also showcased Jabil's in-house design tools and its industry experts, whose trouble-shooting services help clients solve technical design and manufacturing challenges.  

Foremski's Take: We take our digital gadgets for granted but if we knew how they come into creation,  if we knew about the incredible complexities of the supply chain, the design and manufacturing challenges, we'd be awestruck. I certainly was and I now have a new appreciation for the behind-the-scenes work that goes into maintaining our digital consumer lifestyle. There's a lot of moving parts. I was surprised that supply chains could be such an interesting subject.

[The analysts and media at the event were given a bag containing examples of the consumer products made by Jabil, a small Go video cam,  and a wireless mouse. There was also an umbrella.]

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