‘Tough Slog Every Day’ Navigating Supply Chain Woes, Says Flex CEO

The supply chain crisis remains “a very, very difficult place to be,” and a “tough slog every day,” whether navigating the shortage of cargo containers or production parts “or starting and stopping our factories because we don’t have enough product to bring in and manufacture,” Flex CEO Revathi Advaithi told a Washington Post webinar Thursday. Flex, one of the world’s largest contract manufacturers, has 160,000 employees at about 100 production sites in 30 countries.

So many parts of the supply chain are “still at risk,” said Advaithi. “Our view of the supply chain crisis is that it’s been a long time in the making,” she said. “It’s not just something we woke up to and happened yesterday. Think about how lengthy supply chains have been getting with the whole globalization phenomenon.”

Like every supply chain crisis Advaithi has witnessed over her decades-long career, “it takes time for it to correct,” she said. “The good news is, demand is still very, very strong, which is great, but the other side to it means it will take a while for the supply chain crisis to clear up. We think we’ll have to continue to work through this over the next 10 to 12 to 18 months.”

Advaithi supports reducing supply chain complexity by moving production hubs “closer to the end consumer," she said. But addressing the lack of a skilled U.S. workforce to fill those manufacturing roles is a top agenda item she raises whenever she speaks to government policymakers, she said. If autonomous and electric vehicles are “the world of the future,” she asks, “are there specific skills sets and manufacturing hubs that we need to build up across the country, and how do we invest in that? What is the government’s role in investing in that?”

The U.S. workforce “has been retrained to become a services workforce,” said Advaithi. “We have lost the manufacturing capability and the skills set.” Though industry pundits and policymakers “talk a lot” about restoring U.S.-based production, “that’s going to require a very thoughtful, educational path” toward “reskilling” the workforce “that I think the government can play a huge role in,” she said.

Public-sector investment in U.S. semiconductor production is another top Advaithi policy priority, she said. Proposals in the House and Senate to invest $52 billion in U.S. semiconductor R&D are “a start,” she said. “There’s a significant conversation in every C-suite. I am a believer that with the amount of automation and the amount of new equipment available, countries like the United States can be more efficient in manufacturing capacity than we’ve ever had the capability to be.”

The CEO said she's “bullish” on the future of the U.S. as a manufacturing powerhouse. “I’m hopeful that it stops being only a political conversation, and there’s real investment, not only from the government,” but also from the private sector, she said.

Advaithi believes the congestion at the ports of Los Angeles and Long Beach, California, will “clear up faster” than other parts of the supply chain through increased cargo capacity and longer dockside hours, she said. But with demand continuing to be so strong, “the channel has to get filled up, and we need to put supply back into inventory,” she said. On predicting when "normalcy” will return to global supply chains, “ask 10 different experts, you’re going to get 10 different answers,” she said. “I’ve stopped predicting at what point this gets better.”

Amid the media coverage about retail shortages of holiday gifts due to congestion at the ports or the scarcity of components, “it seems like every kid in the street knows what a supply chain is,” said Advaithi. “Maybe that’s one good thing that comes out of this crisis.”