B2B Tech Talk with Ingram Micro
B2B Tech Talk with Ingram Micro

Episode · 4 months ago

How Honeywell and Ingram Micro are reducing the impact of supply chain challenges

ABOUT THIS EPISODE

Supply chain challenges are expected to persist for the foreseeable future. In the meantime, how are Honeywell and Ingram Micro working together to minimize the impact and create selling opportunities for partners?.

Shelby Skrhak speaks with Jeff Yelton, vice president of technology solutions and specialty technologies at Ingram Micro, and Andrew D’Amelio, vice president and general manager, U.S. and Canada, at Honeywell, about:

- How the supply chain is causing headaches for partners

- How Ingram Micro and Honeywell are reducing impacts

- Advice for dealing with shipping delays

- Opportunities that exist within the channel

For more information, contact the Ingram Micro Honeywell team (honeywelloperations@ingrammicro.com) or visit Honeywell’s distribution center information page.

To join the discussion, follow us on Twitter @IngramTechSol #B2BTechTalk

Listen to this episode and more like it by subscribing to B2B Tech Talk on Spotify, Apple Podcasts, or Stitcher. Or tune in on our website.

...you're listening to B two B tech talk with ingram Micro the place to learn about new technology and technological advances before they become mainstream, this podcast is sponsored by ingram Micro's imagine next. It's not about the destination, it's about going someplace you never thought possible. Go to imagine next dot ingram micro dot com to find out more. Let's get into it. Welcome to B two B tech Talk with ingram Micro. I'm your host. Shelby skirt talk my guest today are Jeff Yelton, vice president. Technology solutions and specialty technologies for ingram Micro and Andrew, D'Amelio Vice President and general Manager U. S. And Canada productivity solutions and services for Honeywell. Jeff and Andrew. Welcome. Thank you Shelby. We're looking forward to this. Yeah. Good morning Shelby. Thanks for having us. Well, fantastic. So today we're getting real about the global supply chain and discussing ways that Honeywell Link or Micro are really creating selling opportunities for the channel despite these challenges. So Jeff, will you set the scene for us? I mean what specifically in the supply chain is causing the most headaches for partners right now? Yeah, that's a great question Shelby. Um I'll tell you, it's it's a complex uh answer. You know when it first started we thought it was mainly the shipping containers that were out of sync and with where they needed to be. But when we dove into this, the supply chain issues are much, much more complicated. It starts all the way at the highest level where we're having component shortages And I'm sure Andy can talk more about this piece of it, but where the manufacturers are having component shortages uh to be able to manufacture the devices themselves. But once they do get manufactured and most of the manufacturing is in the Asian basin area. Trying to get those products to the U. S. Is very very difficult because of the shift from buying in store to the shift. And this is at the consumer level to the shift of buying online. The amount of products that are being shipped from Asia to the US has increased substantially. And the amount of capacity from a ship point of view and a container point of view has been very low. Then when you get to the United States in ports like the ports there near Los Angeles and Long Beach. The number of workers there to offload those containers. The amount of truck, number of truck drivers that have the ability to move the containers off of the ports out into the interstate highway system or to the trains and then the number of trains to transport those containers out to the warehouses around the country. There are constraints in all of those areas. And so it's an extremely complex problem. I'll tell you this past week, I was in Long Beach until you are there and you see the size and complexity of the issue. The number of containers, literally there are hundreds of thousands of containers that are there that need to be shipped. Its until you see that you understand how, how big of a problem this really is from the information that we're gathering, This is something that's not going to be worked out in the next few months. It's probably gonna take all of 2022 and probably a portion of 2023 before the supply chain starts to return to normal. That's mind boggling. And that's interesting. I hadn't heard that before, you know, from people that are there on the ground. I mean, you hear yes, that there's all of these containers sitting. But you're right. I mean, having been to long beach, I can picture exact that area. And so now layer hundreds of...

...thousands of containers on that mental image of the that we have in our minds and that really kind of puts it in perspective. It does. And while I talked about Long Beach, a lot of these same issues are are the other ports. They're small reports than Long Beach, but all the ports on the west Coast are having some of these same issues. And I'm actually located on the east coast in Greenville south Carolina and charleston is a big part of ours. And charleston has a lot of these same issues too. So it's it's it's all of the ports, all of the shipping entry points into the U. S. Right now. Yeah, well, you know, they're, you know, obviously material availability is uh is key there. I mean a 50 cent part could be holding up a million dollar product. So Jeff, how does ingram Micro's inventory management system really help alleviate this? Well I would say I'm not sure we alleviated but it's some of the things that we're doing to try to reduce the impact is one of the things that we're doing is trying to consolidate shipments um in Asia uh to make sure that we are filling up full containers so that that we get control of those containers earlier in the supply chain when those containers land here in the US and they get out of the ports. One of the things that we're doing is we are we have actually have some of our own trucks now that we're taking those containers between our warehouses, we have about seven warehouses here in the US and those products have to be put into all of the different warehouses. And so where in the past we've counted on ups or Fedex or the L. T. L. Carriers, the less than load carriers were starting to use some of our own trucks to move those products around which has helped but it definitely has not alleviated the problem because the problem is so severe. Just trying to find trucks to rent is very very difficult. Yeah. Well so I mean I'm glad you you hit on that because I understand uh Andrew that Honeywell is is working on a lot of these issues. I mean um this supply chain movement of of goods and the lack of available workforce. Can you tell us about this move that Honeywell is making with premium carriers to kind of help move things along for customers? Sure. Actually I'll expand a bit on what, what Jeff talked about it. I think Jeff did a great job covering, you know, the logistics side. Let me just talk a little bit about the components side and you know, maybe a little more optimistic. You know, I'm thinking Q three, Q four of next year. We should kind of be out of the soup here, Jeff, I think you mentioned maybe all the way to the beginning of 2023 you know, I hope that's, that's not the case. You may be right, but maybe you and I can place a nickel bet on that. I'm hoping I'm right on on this one. But, but we'll see. Look. It all starts with the component shortages and one of the key ones is the microchip. So microprocessors, you just can't get, there's such high demand and there's not enough capacity. And this isn't something where you can just Turn on a factory or turn on a plant and within 30 days you have increased capacity, you know, to bring up a microprocessor. Fab facility. You know, could take more than a year. And so that's one of the primary reasons why it's taken so long for us to recover here. So you have the microchip shortage, you have all the sensor shortages. You know, you hear about the cars that are sitting at the factories or in the lots and uh, you can't ship them. I heard that GM was doing something where they're now no longer offering heated seats because that takes up the highest amount of sensors in the vehicles just to try and be able to deliver something to their...

...customer base. So you have a sensor shortage, you have a chips shortage for our type of offering. One of them is the rugged mobile computer. You have a display shortage, There's issues trying to get resins that go into the plastics, there's metal shortages. So imagine you're trying to balance all this as well as the logistics shortages that were logistics problems that Jeff talked about. So we're doing a lot on the component side replacing the longtime buys with our vendors to try and overcome this. We're pulling in the full power of Honeywell. Imagine, you know, you could have presidents of countries calling to try and get parts for the factories, which means so much for their economy. And now at the same time we have our chairman of the board calling, trying to get the parts that we need for our mutual customers. So we try and leverage that full horsepower Honeywell. What I would say is, you know, don't delegate this if you really need to get parts, we need to get something done. You know, it should be handled, you know, at our level and not kind of delegated down within the workforce. We also have more than 30 reengineering efforts right now where we're trying to get second source components into the offerings. So maybe we can't get the first source, so we're out there actively trying to get something else. Spect in that we can still manufacture, working with ingram, working with our channel partners on skew substitution, you know, that's another big part right now. It's hard to get exactly what you want. But there are various products that you still can get. So working with the teams on that and then of course on the premium freight. I mean we have big contracts with all the large providers, which we all know. Honeywell does a lot, a lot of logistics and shipments and right now rather than make our customers wait, we are paying those premiums and uh, You know, they're going up probably 50%. And even though you pay the premium, I think Jeff talked about the, the container part, even on the air shipments right now in the past, people would think you could get something air from Asia within 7 to 10 days. It's 30 days and longer now. So I think these issues are just prevalent all the way up and down the whole supply chain. Let me let me add on one thing that um Andy hit on because it's really, really key and I want to make sure that everybody out there understands the level of commitment that Honeywell has made when he talked about, you know, making commitments to these component suppliers there sometimes making commitments out a year or more on those components and the inventory risk of doing that is extremely high. So I think for a Honeywell to step up and make those type of commitments is a statement of of how committed they are to the channel and their products and making sure that that they're able to supply their products to the marketplace. Well, because yeah, I mean, it's interesting that it's affecting every level. I mean, yes, like the consumers are feeling it, but you know, Honey would themselves are in encountering these, these challenges trying to serve the channel. So uh it's interesting. Andrew to hear you say about the markup that's happening and just, you know, basically taking the bull by the horns and trying to get goods moving. And I'll be interested to see which which of these projections end of Q four or early Q three will will be the will be the, the answer. Right. I will tell you that is one that is one bet that I hope to lose. I know I know I'm going to make you pay that nickel to. Absolutely, absolutely. Mhm. Well, so um one thing that also occurs to me is is the delays...

...that that's that this brings um we're also facing, you know, upcoming holidays, I guess. Andrew and Jeff, I'll put it to either one of you, what kind of again, this real talk, what kind of delays, realistic delays are we seeing on each level, you know, from the consumer level to two partners to the, you know, for the, the channel at large, basically what I guess is your advice and maybe I'll put it to both of you, which is your advice for for understanding the time constraints and what a delay you can expect is Andy I'll let you start on that, then I'll follow up. Okay, good. I mean, look, we we work with our partners, our customers, our sales team, we work with ingram, I don't know, multiple, multiple times an hour, it seems. And for me it's all around communication. In the past, We could look at something 60 days out and say that's plenty of time for us to respond to that. Maybe we looked a quarter out and we would say that's plenty of time. What I'm telling my teams now is if we don't have our demand, our view of what the partners and the end users are going to want 9 to 12 months from now. We're already behind the eight ball. It was an interesting point that Jeff made, our new product development time is, let's call it 6 to 9 months. So by the time we create our business case, get the team engaged, you know, 6 to 9 months from them, we have a new offering out to the industry. Well, if we have to place bets on, on chips, 12 to 15 months in advance, imagine you're making a commitment to buy a technology where you haven't finished fully developing the product. So now put on top of that, what's the real customer demand going to be, what type of configuration is it going to be? So look, my advice is we have to shift our way of thinking and it's all around communication and over communication work. We're in an allocation model right now. Only once in my career have we done something like this and it was, you know, 20 years ago. So there are many people that are in our industry that have never gone through a situation like this. So it's new learning for a lot of us, we didn't even have a global allocation process that we could go refer to and you know, Honey, Well, there's a lot of processes that that we use on a daily basis, so it's a lot of new learning. And my advice is to try and get as intimate as you can with the end user with the partner, freely share the communication and then that's how you can be better. I think the days of hey, I think I'm going to need 1000 ingram put them on the shelf for me and I would love to do that and and has done that for decades, but it's not that simple anymore. If it were, you know, we wouldn't have this, this problem. So just just keep the lines of communication open. You don't understand that when your sales partner or ingram comes to you and says, hey, we need a decision on this within the next week. It's not a sales ploy, it's real. And if somebody is not willing to find out the information to make the commitment, you know, those goods or services will probably be allocated to somebody else. So I do think it's a bit of a different world we work in today. You know, we're lucky to have a great partner like ingram where, you know, we can communicate and over communicate and kind of take risks and bets together, but that customer intimacy is more important now than ever. Yeah, I would agree with that. Andy 100%. The majority of the inventory we're getting, it, we're, it's called Cross docking. We literally bring it in one door and turn around and ship it out within 24-48 hours. And so if we don't have those orders in the system now, the odds of, of a customer being...

...able to get it are very, very low. One other thing, I would tell you, we have about four times about 400% of our regular backlog. It's about at 400% of that right now. So we have that many orders out there with manufacturers across, not only with Honeywell but across the 1500 vendors that we have and we are backed up at 400% right now, wow, wow. Well, um, you know, of course, I guess the silver lining is that with challenges. Do come opportunities, So Andrew what opportunities exist in the channel. And can you give us some examples? Sure, Great, great question. Yeah. Look, it's, it's unfortunate but crisis does bring opportunity and it's not as though every configuration of every type of offering is unavailable. You know, there is still product there. It may not be the first choice of a particular product. And so, working together with the ingram team with the application engineers, the partner having the end user all work together, chances are that maybe there is a version that exists that you could get that will work in the application now, maybe you may need to change a few things with the workflow. So that, that that's the first thing, you know, really digging in and understanding the use case. I think that there may be some some substitution that can be made to at least get somebody to start up a facility or kind of get them, get them over the hump. That's the first thing. The second thing is software, you know, software doesn't really have, have a lead time, right. If you find an application that works for you, you can pretty much get it tomorrow. So that's the other thing that I would say Honeywell is developing more and more software applications for our type of offerings. I know that ingram has a whole business dedicated to that. So, so that's the other piece. Maybe there's a software application that a partner can sell to an end user, so that maybe they don't need as many devices where they can get away with fewer devices because this application will allow them to be to be more efficient. I think software around device management and device up time, you know, anything that will go and drive productivity today, especially when you have not only a constraint uh supply chain, you have a constrained workforce. So you're kind of trying to solve two problems at the same time. So really understanding how the end user works and what the workflows are providing suggestions on how to optimize those workflows and then really gearing that around what's available today In the supply chain, you know, Jeff talked about how long it takes for goods to get into the poor and to get to, you know, get to the ingram warehouses and then how fast they have to turn them around for me, that's that's part of it. Maybe in the past it would take 48 hours now we want to get that stuff turned around within a couple hours and that requires new technology and different type of technology within those facilities, which I know that ingram has been invested in technology and and we've been helping with some of that in their in their facilities as well. So you know, the good thing about technology is it allows you to go faster and uh and typically allows you to maybe not need as many people and so as long as we work together and try to create solutions what's currently available, I do think that that provides a lot of opportunity in the channel and again, there's always a reason to talk to the end user and so what better reason than to talk about what's different today, you know, versus a year ago and how we can work together to make them be more efficient. So it's it's unfortunate when you're in crisis mode, but I do...

...think there's still plenty of business out there for all of us to grab definitely. Well uh as we start to uh to close in on our time here, um we typically close each episode by asking our guests where do you see technology going in the next year now? You guys have already given some of your uh your predictions But where do you see technology going in the next year, Jeff? Well for me, I think the um I saw a great chart from Gartner a few weeks ago and they had concentric circles about technology that could actually generate revenue today or in the next say, you know, 12 months and then they in each concentric circle that went out on a year or two. And if you look at one of those that's relatively close in that I think is going to have one of the biggest impacts on the data capture industry. I think it's gonna be five G. Um and putting in the five G networks because as Andy talked about it, you know, more and more of the warehouses as an example or the manufacturing floors are being driven by software and video and so as people start putting in more software and more video, um they need a more robust robust network to be able to run that on. And I think the advent of public five G, the advent of private five G. And even the advent of of the private CB rs networks are going to be something that most of our partners are going to have to deal with and start determining when do I use wifi six? When do I use 800 gigahertz? When do I use uh private five G. When do I use Public five G. And the thing that I love about that from a Honeywell point of view is it's going to drive the need for a whole new set of products That are coming from Honeywell, they will play in this space, and the number of applications that will be able to be laid on top of these new 5G networks are gonna be very exciting. Going to drive a lot of efficiency and productivity and I'm just really excited about that. One specific technology, Jeff CB Rs Um it's an open band. So um the 5G is um you have the private, I mean I'm sorry, you have the the where people buy the bandwidth and then you have the open bandwidth, kind of like a radio, like a walkie talkie radio. Uh and there there is open bandwidth that anybody can use without having to buy that bandwidth. And that's what the C B R s is. Got it, got it Andrew. How about you? Yeah, I think those are great, great points, Jeff. And yes, Honeywell will be at the forefront of those technologies. I'll go back to my engineering education and I'll cite moore's law and moore's law says that technology will keep getting smaller uh and faster and more powerful. And so when you think about that, you know, what does that mean? Well, it means that you can instrument a worker maybe with smaller devices, maybe with a smaller wearable and now have these uh these sensors and devices connect together and then communicate back through the technologies that Jeff mentioned. Maybe they're cloud based. Now we're in the past, they'd all be on premise and these can allow for just very fast uh interchange of information. You can also imagine where now you have a shortage of workers that workers fully instrumented, that worker maybe getting commands to go move, move goods, either, you know, visually or through voice and at the same time, there's automation, maybe there's a robot or...

...some sort of machinery that's also getting commands to go, do you know, certain type of workflows now, I think, you know, down the road, everybody thinks about this fully autonomous, maybe type of warehouse or factory, you know, where there there there's no humans there. I don't think that use case, you know, works in all applications. What I think more about is as as we continue to evolve is a use case where you have the machine or the robot working in unison with the worker. And then just as commands are being given to the human commands are also being given to the robot and they're kind of working side by side. And those enabling technologies that Jeff mentioned really allow for that. And of course moving the cloud based applications allow for that. And the fact that everything can get smaller, you know, also allows for that. The only thing I'll say though is as we go into this more data rich environment, security, you know, has to be a key concern for everybody. Even as recent as yesterday and today there were new security breaches that were publicly announced, right? So I think that as you pick, these new technologies, just make sure you're partnering with companies that are kind of at the forefront on the security side and, you know, I would certainly place ingram and ingram and Honeywell right up there towards the top. So look, I think it's going to be an exciting time for technology over the next three years, then over the next 10 years as it has been and I'm I'm really excited to be in this space. Well gentlemen, thank you so much for joining me. Thank you. My pleasure, Jeff, get your nickel ready. I'll be you know, I'm ready to pay it, I'm ready to pay it. Hey, thanks for having me. It's been a lot of fun and thank you listeners for tuning in and subscribing to B two B tech Talk with ingram Micro if you like this episode or have a question, please join the discussion on twitter with the hashtag B two B Tech talk. Until next time I'm Shelby scare hawk. You've been listening to B two B tech talk with ingram micro. This episode was sponsored by ingram Micro's. Imagine next B two B tech talk is a joint production with sweet fish Media and Anger Micro. To not miss an episode. Subscribe today to your favorite podcast platform.

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