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The 25th Fortune World’s Most Admired Companies list suggests that tech giants’ peers respect them as much as ever.

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Flex Company Profile, News, Rankings | Fortune

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Flex

flex

 Revathi Advaithi, CEO, Flex 
Interviewer: Alan Murray, FORTUNE


Brainstorm Tech 2022: Building More Efficient Supply Chains 

Conferences

thank you so good to see you, thanks for being here. You know I think we should start. You you run one of the largest companies that many people have never heard of that. Right. So why don't you tell, tell, explain what flexes and what flex does and how big flex is? Absolutely. So flex also called flextronics. We're manufacturing services, design services company and we make a little bit of everything, lots of different end markets, everything from medical, automotive tech to consumer products. So think of something, we probably make it for our customers. We are around in around 30 countries, around 1000 customers, 100 80,000 employees. Around 26 billion in revenue. And of course in the middle of the supply chain conversation that's happening now. And so what? Well let me ask you this, you you flex and other companies like plus we're part of offshoring contract manufacturing, all the things that really made the global economy that we grew accustomed to and now it's changing. Uh I mentioned the word friend showing how how big is the change? You probably have a better view of this than anybody we could have on this stage. How big is the change? How fast is it happening and what does it mean? And you know, alan I think in the conversation just before somebody talked about ensuring and reassuring. So let me just kind of frame the problem first. I mean we're talking about supply chain resiliency actually, which has become the forefront of conversation for every C suite I would say across the world and if you think about supply chain um resiliency, they're kind of two big concepts that everybody is talking about One is where do you manufacture things and why? And that's where the whole idea of re shoring on shoring is going on. And then the second is around the digitalization concept that will get to probably in a few more questions, but on the idea of on shoring re shoring, you know, the world's gone through in the last few decades, a whole bunch of changes, right? It was all about labor arbitrage. Where could you get efficiencies of production and everything moved to china and through all the trade issues and the pandemic and the supply chain crisis. The big focus is where do I make it, how can I bring bring it closest to the and consumer? And I would say progress is definitely accelerating and um it's somewhat, you know, will be slow because it's a complex equation that's been created over many years, But it has definitely started at flex itself, I'd say close to 80-plus% of a lot of our programs that we're doing now involved moving some form of production closes to the end consumer for our customers, 80% of the work you're now doing is some form of re shoring or moving closer? That's an amazing statistic. And do you, is there any reason to think that will slow down or reverse itself or do you think this is a trend we're going to be living with for quite a while? I think it's a trend that will live with for quite a while because one thing that is changing is the conversation is just not about cost of the product itself, right? People are becoming sensible about total cost, freight costs are escalating or going up significantly the risks of the, you know, geopolitical risks and where product is made, it's hard to quantify. So it is, you know, I think the train's left the station on this, this is going to go through decades of kind of change again, where you're gonna see bill of materials change in a pretty significant way, As everybody looks at where is the best place to reduce risk? And um, I think that trend is definitely on the move we've had on this stage in the last 24 hours, this debate over whether inflation is transitory or there's some fundamental longstanding pressures like that that might cause prices to rise for the longer term. Can you do this kind of on shoring without having some effect on prices. You know, I think there will be some effect on prices because at the end of the day Asia had developed a highly efficient supply chain and it is hard to compete with that if you look at it only in a cost by cost basis. But I think organizations that are able to look at it more holistically will be able to take the long view of you know costs in one year will be offset by total cost over a long period of time. So you will see some level of inflation I would say resulting from this, you see that today freight costs you heard from, you know the Fedex Ceo is has escalated over the last year and people pay for it. So there will be some level of inflation associated with it. You are, we're talking about supply chains and as fascinating as that has become you know, whoever thought we would be talking about supply chains on the but I'm glad we're talking about it is fascinating but but we should also talk about I mean you're one of the largest manufacturers in the world. Uh We should talk about manufacturing and how it's changing. Give us a sense of of the 10 year view of how manufacturing is going to change. And I'll talk about manufacturing in two parts because you can't um separate out supply chain from manufacturing because everything has to arrive into a factory before you make it. Right. So the whole supply chain has to change pretty significantly. You heard all this conversation about ai and digitalization and I'd say to some extent it hasn't touched supply chain the way it should right? Because data is not that available across the ecosystem in the supply chain. It's not like google where consumers are, all their data is available. And you're able to kind of mind the search engine for all the data here individual customers and suppliers have all their data sitting in their independent E. R. P. Systems. So finding a way to mind that level of information sitting in the supply chain and making A. I. Relevant to supply chain is going to be really important because otherwise we will have another semiconductor crisis like you have today. And the result of that could be significant if you don't solve. It's a good data and information whose whose job is it to make that happen? I mean how do unite all those databases? It is tough. I would say you know flex is an initiative going where we're trying to bring customers together. I'm working with the commerce secretary in an effort. She's driving to bring that information together. But it is difficult because every company wants to protect their I. P. And their information. So I'd say a lot of work to be done on the digitalization side of supply chain and then on the manufacturing side you know you can't move and re sure things very easily if you don't have labor available. Think about the demographics issue that exists everywhere. So automation and driving a high level of automation into manufacturing is critical. That is. And the good news is it's available today. You saw the demonstration that you saw earlier. Things like that in manufacturing are critical if you can reduce the amount of time in a warehouse if you can reduce the amount of time you're doing servicing of equipment. Um if you can launch programs through digital twins and simulation, which is what we're doing in a covid time. Those are all kind of technology that can really accelerate how you manufacture. So if I look forward, you know, for in a decade I would say my vision would be you know, you walk into a factory, you should be able to have managed everything of it sitting from your home, you should have been able to program your equipment, send your demand planning work and should be just managing the product as it moves through the factory. That if that is doable then you can see a lot of manufacturing moving and reassuring because labor of availability is a big issue. Yes. So we should talk about that. The war for talent. I mean you're in the middle of it. What are you seeing there right now at the first two fronts. One is you know, we have two sets of people that we employ, right? One is manufacturing, labor is a significant issue. You know, you can't talk about moving manufacturing to the U. S. Or any other part of the world and not have people and skilled labor available. So that's one significant challenge um that we're working through. But in terms of talent itself um I'd say you know we're not a tech company so we don't compete for the typical tech talent but we're like every other company that's working through the issue of attrition is high. You know, people have different priorities of what they want today. Um, so I'd say it is challenging, but we have, you know, ways of working with local communities and technical schools that meet more our requirement of the kind of talent we're looking to hire and so we're doing those types of creative things to really drive, um, and keep our production going. But I'd say, you know what, it's, you have to be an appealing company for talent to want to work for you. And at the end of the day, I always say it's all about the culture, if you have the right culture will have the right people and you don't expect that to change either. The talent. I don't think so. Well, it depends on if the economy slows down and everybody keeps talking about, you know, are we going to have the demand we have, then maybe it reduces some, but I don't see the fundamentals changing in terms of the wall or in talent, will you have a view into a lot of companies order books? Do you see any slowdown? Well, not yet, not yet, not yet. We're hypothetical for you. That's right for us. It is hypothetical, you, you see some a little bit in the consumer space. Um, so that everybody's hearing and, you know, talking about cell phones and laptops and, you know, vacuum cleaners and things like that, but we're not seeing any demands slow down. It's a unique time, Alan, you know, you know this well, right, inflation is high, demand is very strong. Supply chain is absolutely bottlenecked. It's a very unique time to be able to look at it and predict like when does all this come together and when you really see demand slowdown, I want to be sure to give people an opportunity to ask questions if you have any, please raise your hand and and and grab grab one of the paddles. But everybody, I want to ask you about your journey because you're running one of the largest manufacturing companies in the world. There's not a lot of women who run manufacturing companies that hasn't been the friendliest space for women. How did you get there? What? Tell us a little bit about your unique journey to this position? Yeah. First, alan uh say there's not a lot of women running anything, so not manufacturing, it's, you know, tech or any sector. I think the largest challenge we have and it's probably in any sector is that we see a lot of women going into kind of functional roles like HR legal finance. We have a hard time convincing people to come into business rules and manufacturing as such is really tough. You know, you have to be able to work in the factories, navigate the factories, You have to be very global. Um So it is a very difficult space for women. Well, I love manufacturing. I'm a mechanical engineer. Not many women want to be a mechanical engineer. I just love watching things being made. It just fascinates me. I just couldn't imagine sitting behind a computer and programming software. That's just not me. You did your engineering degree in India in India. That's right. A mechanical engineer. And you came here to work for, I came here to do a master's and then I realized I needed a job. I was broke. So I joined a company called etON and their power management. Energy management weren't a lot of women had eaten at the time. No, no. Yeah, there's not a lot of women now either. I would say in the industrial space. And so, you know, I joined them in the manufacturing shop floor as a shop floor supervisor in Shawnee Oklahoma. And then just worked my way through all the different jobs there. And uh that's how I ended up here. So I'd say in general, women have to be able to take vigorous sector. You are, you have to take risks in the jobs you take and you have to put yourself in an uncomfortable position and be able to take jobs that you, you know, it's not obvious and apparent that you're going to do well in. And I had great sponsors all that help. Well, we're glad you did as well as you did. Thank you for sharing what's going on in your space? And thank you for being a brainstorm tech.

The competition for talent has moved well beyond employers competing with one another to find the best workers. Now, as employees demand more flexibility and are driven by other non-monetary factors, managers also find themselves rethinking employee value propositions to address the new power and choices workers have. To build a resilient workforce of top talent, CEOs need to radically rethink ways of working—from embedding meaning and purpose in work, to developing opportunities for individuals to add new layers of skills, to fostering social capital within the organization to build networks and trust. Drawing on McKinsey & Company’s latest research, this session will explore what factors make employees happier, more productive, and more likely to stay–and how CEOs are driving business value by deploying a talent-first mindset. 

In partnership with McKinsey 

Moderator: Alan Murray, Chief Executive Oﬃcer, FORTUNE 

Participants: 

John Driscoll, Chief Executive Officer, CareCentrix 

David Heath, Co-founder and CEO, Bombas 

Jo Ann Jenkins, Chief Executive Officer, AARP 

Charles Lowrey, Chairman and CEO, Prudential Financial, Inc. 

Jeff Maggioncalda, Chief Executive Officer, Coursera 

Marc Rosen, Chief Executive Officer, JCPenney 

Christian Ulbrich, President and CEO, JLL 

Making the workplace work for people

Leadership

Drawing on McKinsey & Company’s latest research, this session will explore what factors make employees happier, more productive, and more likely to stay.

I want to thank you all for being here today for this special ceo roundtable on the new realities of talent and the workplace and a special thanks to our partner Mckinsey and company for hosting this conversation. A good group of C. E. O. S here. I think all of you know the competitive struggle for talent is unlike anything certainly I've ever experienced. I think most of you have ever experienced before when we asked Fortune 500 ceos last month what their biggest challenge was, even though we're in the middle of a war in europe, you know, and approaching a possible recession, a redefinition of work Still, number one thing on their mind was Talyn um the the need to attract and retain good talent in the workforce. The pandemic has added this whole new dimension about where people work and when people work and how they work and even why they work. Uh and we want to talk about all that uh today, what are the uh what are the best best practices that you all have found? What are the factors that make employees happier more productive, more likely to stay with the company? Uh And and how are you as C. E. O. S. Driving business value By focusing on talent 1st. Um uh This is a this is a small group which is good. My intention is to engage all of you really want you to share your own insights and best practices. Uh If for some reason you don't want to be called on turn, turn off your camera but if your camera's on, I consider you fair game. So be prepared. Also a reminder that this conversation is on the record. Um, we will be reporting on it unfortunate. I'm planning to do something for the Ceo daily tomorrow. So, uh, if, if, if you have something to say that you don't want to be on the record, please make that very, very clear and use the chat. Um, I'm glad john driscoll has already commented on the introductory music. Uh, it's a great place for you to either ask questions or make smartass comments, whichever works for you. Um, uh, and, and I want to again, thank thank Mackenzie for setting this up, but I want to go to Bill Shannon her first. He's the guy on the screen that looks like the talk show host. He's a very good talker and he wrote a, wrote a wonderful piece on Fortune dot com uh, this morning that highlights some of the trends that uh, he has seen in Mackenzie research and I, I'd love for him to spend a couple of minutes just setting the stage for us and then we'll get into the conversation. Bill, thank you Alan and I do apologize for the gear. I can either look like I'm looks like I'm at a beta or or more plausibly the speaker and mic on my computer is not working properly. There we go. Um, yeah, you know, and it was interesting that the piece came out this morning right in terms about it, but the cycle time now on anything related on anything.

As companies increasingly talk about their diversity, equity, and inclusion strategies, how can leadership and boards be persuaded to adopt role-based compensation structures and address areas of bias in the recruiting and promotions process? Our panelists will explore the pressing issues connected to pay equity, the rise of the flexible workplace, rising inflation and compensation, and how pay transparency helps or hurts the transition to equity. Join this timely discussion and explore how to bridge the opportunity gap to eliminate pay disparities and help employee retention. 

In partnership with Credit Karma 

Moderator: Maria Aspan, Senior Writer, FORTUNE  

 

Discussion Leaders: 

Marissa Andrada, Chief Diversity, Inclusion and People Officer, Chipotle  

Angela E. Guy, Chief Diversity and Inclusion Officer, L'Oréal North America 

Colleen McCreary, Chief People, Places and Publicity Officer, Credit Karma 

Bridging the pay equity gap

Panelists explore the pressing issues connected to pay equity.

Panelists explore the pressing issues connected to pay equity, the rise of the flexible workplace, rising inflation and compensation, and how pay transparency helps or hurts the transition to equity.

Lead career coach at FlexJobs, Brie Reynolds, discusses the future of work

How to successfully implement a hybrid work model

Features

So about nine in 10 companies, according to a recent McKinsey study are going to adopt some type of remote work. Whether that's hybrid or fully remote work. Most companies are going with hybrid models, but they'll have people in the office and working from home and then at the same number of people, about 80% of workers want that sort of model. They like the hybrid idea, they want to be working from home sometimes, but they also like to be in the office with their co workers. There are usually about three ways that companies do this. The first is to have people in the office some days of the week and then from home other days of the week, that's usually the most common and that's what we're seeing even now, after the pandemic. Alternatively, there is the option where they will have different teams of time. So Team A might be in the office for one week and then TMD is in the office the next week. And on those alternate weeks they are working from home. And then the last way that people do this is having the workers themselves just individually choose to either be fully in the office or fully remote. But most of the time they're going to spend their their time working in one place or the other and just have it be their choice. There are definitely a few red flags that professionals and people should look out for in their companies that show a company is not yet ready for a hybrid work model. The first big warning sign right now is if you haven't heard that your company has any plan in place, if they're really not talking about this, they're not seeking employee input on how they would like to see a remote model or a hybrid model run. That's a really big red flag. This is definitely the time for companies to be thinking about this. And if you're already having company calling people back into the office without having discussed hybrid options, that's a pretty big red flag. But if they even have something hybrid in place, that's not going to work very well, one of the other red flags that people should look for is senior leadership. If senior leaders in the company are not working remotely ever, and they're only ever in the office that really doesn't create a culture where hybrid work can flourish. You want everyone into the system, you want people using it at all levels. Hybrid work to be done really well on a large scale has to be done with intentionality. You have to think about things like making things equitable for all of your workers, making sure it's there, whether somebody is working in the office or from home. And some people describe this is actually approaching this as almost though your workers are all going to be remote, even if they're not. So by thinking about it that way you put into place all of those communication platforms, document sharing options and just make sure everybody's on the same page so that they can all work remotely even if they're going to be in the office. Sometimes one big number that we've seen is that in 2020 about 76% more remote job listings were listed on flex jobs than in 2019. So there was a huge increase in remote job listings. And those were the ongoing long term remote jobs, not temporary, just during the pandemic, but remote jobs that people could have over a long term, you know, for years. And so that was a real sign to us that employers had embraced remote work, had seen that it could work well even in the middle of a major global crisis and that they were willing to really do this in the long term. And we saw people in those situations working parents, caretakers, people with a lot of responsibilities during the pandemic, being able to actually do this really well as a working parent myself. I know remote work as a huge way to get better work life balance, have reduced childcare costs, um and just reduced a lot of the friction and stress that happens between work and life. Um and so I think a lot of people experienced that in the last year and are really hoping and and trying to contribute to their company's success in remote work in the long term and hoping that they put a really strong plan in place because they have found it to be a really successful way to work.

Flex

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