 Hey global supply chainers. Hopefully you know me by now. I'm Alexis Bateman. I'm a research scientist at the Center for Transportation Logistics here at MIT, and I'm also the course lead for SE3x supply chain dynamics. So today we're having our third live event and we're really fortunate to have Bruce Clafter, Vice President of Corporate Social Environmental Responsibility from Flex, a major electronics manufacturer and a lot of other things. He'll give you a little bit more background on what flexes in just a minute. So I just want to do a really brief course update. So we're right now in our week 11 for SE3x. If you're in that course, that is our prep week right before the final exam. So make sure you're prepping for the final exam. Go check review lessons you struggled with, try some other practice problems and all that. So that will go live next Wednesday at 1500 UTC. So just make sure you take some time to prepare for that. We also have the Scream, a resilience and risk mitigation exercise game running right now. It's a brand new web version. So if you want to go in and try that out, you can see how you do relative to your peers. So that's open in this week as well. So make sure to give that a chance. It's a pretty interesting exercise and you can post and discuss with some of your peers about what you're seeing and what you've done. So now we're really fortunate. I want to spend most of the time with Bruce because he's we're very lucky to have him today to have him chat a little bit about his work. So Bruce is really was really an expert in supply sustainable supply chains as and has led corporate social environmental responsibility at flex for the last five years. And previous to that was the managing managing director of the of corporate responsibility at applied materials for 12 years. And his work he really leads efforts towards addressing some of the most challenging environmental and social issues occurring in the supply chain. Prior to his work in corporate social responsibility, he actually served as a deputy attorney general for the California Department of Justice. So he has a wide range of expertise. And in his current work, he also serves on a number of sustainability advisory boards, including the electronics industry systems coalition. So we're really lucky to have him. Thanks for joining us, Bruce. Yeah, my pleasure, Alexis. Happy to be here. And so I don't know if you want to take a few minutes and just introduce yourself and flex a little bit more and then we'll dive right into some question and answer. Yeah, very good. Thank you. If we could put the couple of slides up there regarding flex. Perfect. Yeah, it's on the title slide. Okay, let's go to the first one. Okay, the next one. A little bit of a lag here. There we go. So a little bit about flex. We're one of those kind of large stealthy companies that people may not hear about primarily because we're a service oriented business, essentially business to business exclusively significant amount of revenue. As you can see, I'll show you the footprint in just a moment, but we operate in I think 32 countries today and we employ over 200,000 people. Back in the day, they used to refer to companies like ours as contract manufacturers when we were primarily executing orders on behalf of customers. Today we do quite a bit more than that and flex refers to itself as a sketch to scale company, which connotes the fact that we work much earlier with many customers on design and other issues relative to their products. But when they are ready to bring those to market and they need to scale it up, we also have the bandwidth to produce the product in large volumes. And our structure is quite regionalized. We operate in basically every part of the world except Africa, which enables us to situate the manufacturing where it's most advantageous for the customers. And that's dependent upon proximity to the markets that they serve. It's dependent upon capacity, labor, many other factors that I'm sure some of you have discussed in this class. So you want to go to the next slide? Still a bit of a lag here. There we go. So we have over a billion dollars worth of business in 12 different markets. And I won't go into this in any great detail. I just wanted to illustrate the fact that electronics today is an extraordinarily diverse type of business. So what we were traditionally doing, the types of consumer and other industrial products that you might be able to imagine today is expanded considerably. So healthcare devices include electronics. Today, an automobile is essentially a rolling electronic device with multiple microprocessors and other types of electronic components in it. Our homes today are much more connected than they ever were. And a fast growing sector of the electronics business is also what's called wearables. So you could think of smart watches, but today increasingly garments and other types of products are also incorporating electronics so that they can transmit information to the owner and to others for analytical purposes. Next slide. It's live on our end. Yeah, I'm getting quite a bit of a lag here. So just very quickly, this will be the last thing I'll illustrate before we get into the discussion. This just shows our global footprint with nearly 100 factories around the world. But this also has distribution centers and what we call design centers where our customers, both big and small, come in to work with us on their latest concepts. And we can help them incorporate the appropriate technologies and probably more importantly work with them on design for manufacturability. So a great idea is not truly great unless it can be executed and that's one of the services we provide to our customers. So quite an extensive footprint. The largest regions in terms of square feet as well as the number of employees would be China and Mexico, not surprisingly for a variety of reasons, but we still remain the largest electronics manufacturer in the United States based upon the amount of square feet and facilities that we have. So if and when on shoring becomes more of a reality we're well positioned to serve that market as well. So I think we can get into the discussion now, Alexis. Great, perfect. Okay, that's great to learn a little bit more about Flex. I think that Flex is such a interesting company and one that maybe some don't know as well because it's not a business of consumer. So a good little background there. So I'm interested to introduce your background a little bit, but I was wondering if you could tell us a little bit more about your role at Flex and really how you came into this role. Yeah, sure thing. So what I get to do is work across the entire company on both the social and environmental responsibility of our operations and given the type of diversity of products that we help our customers manufacture in the locations I just illustrated, there are quite a number of issues that arise. So if you think about a corporate function like the one that I lead, the first thing that we do is help the company establish what are the standards for our conduct. So we maintain our code of conduct, we maintain all of the policies and procedures that are in our manual, including things like the human rights policy, the environmental health and safety policy and so on. We provide leadership and strategy to the company on those subjects and so I interact again with functions all around the company as well as senior leadership, occasionally the board of directors to update them as well. One very important function in a corporation is internal assessment and auditing and unresponsible for leading the team that does that work within the company and then we also are very involved externally with our customers, with collaborative efforts like the responsible business alliance that you mentioned earlier and quite a number of others. So it's incredibly diverse, supply chain is part of it, but a lot of time is also spent directly on establishing both the standards as well as the practices within our own factory footprint. Great, yeah so actually we also just polled our students who are online and it looks like you know we asked them sort of where do they work in the supply chain you know I've given that you've kind of working across the supply chain across the company. So about 20 percent are, the majority is in manufacturing about 26 percent, 12 percent in retailing, 15 percent in warehousing and 35 percent actually in logistics and then there's a 22 percent in end-to-end or another category. So we got we got students coming from many supply chain positions getting different angles of that. Yeah that's great I mean and I work with all of those functions just to give you one other illustration with logistics. I'm working with some colleagues there doing our carbon foot printing so we're engaged directly with our largest third-party logistics providers and that covers two areas. We have a tremendous amount of incoming material so this is upstream of our operations and then we have a very large operation where we distribute the products that we're manufacturing so that's downstream and today one of the biggest issues is how can you choose the right mode of distribution to reduce your impact? So we would like to go to ocean freight for instance in many instances but if we need to get it to market much quicker depending upon what the customer requires that might not be feasible. Right yeah much different timelines so that's definitely a kind of a grapple there. So on that kind of vein can you talk you know more about sort of the various work and sustainable supply chains you do on top of sustainable logistics and how is really the supply chain affected by implementing more sustainability? The basic premise I think of what we're trying to do at Flex and this is true of most leading companies is we essentially want to do business with like-minded suppliers so we're looking for suppliers who also have a demonstrated commitment to sustainability and hopefully we're able to establish that in our relationship with them so if you think about the stages of a relationship with a supplier from qualification on through the engagement the ordering and so on at each stage of that relationship there's a role for sustainability so we play a big part in the qualification process and then as we assess the performance of suppliers today sustainability is one of those key elements along with the more traditional ones like quality cost timing of delivery and so on. Traditionally when companies manufacturing companies measured their suppliers on performance those traditional factors were the only ones they looked at but today we're looking to make certain that they operate in the right fashion and they're able to maintain that performance and we have a few what we call showstopper issues things that I'm sure anyone on the on the webinar will appreciate are things that we simply cannot tolerate that would be the existence of underage labor within the factory forced labor is another issue that's emerging as a big showstopper and then serious environmental issues could potentially rise to that level as well so today a lot of sustainable supply chain management is based upon how we collect sort and analyze all that information and then the real opportunities are in engaging with willing suppliers on things that go beyond compliance like energy management carbon reduction the logistics endeavors I mentioned before those sorts of things are all well beyond compliance. Sure right absolutely so you actually I think already answered my next question about some of the social environmental risks in terms of showstoppers so clearly some of those are are happening and being aware of in the supply chain so we're going to run a a quick poll now which kind of gums on this you know flex being proactive in this place but do you feel or will run the poll do you think firms should be held responsible for their actions in the supply of their suppliers and so kind of to segue into that what is one of the biggest challenges that you have encountered managing sustainability in a supply chain? Well there are quite a number I mean the first I would say is scale and complexity so it's hard to generalize here but probably electronics has among the most complex value chains in sectors that you will find a typical electronic product or a product that's got some electronics embedded in it can have hundreds if not thousands of components and so in order to establish that the product is sustainable whatever that might mean whatever your definition is can be a very large undertaking just to interact with each and every one of the suppliers of those components. Now what's making it even more challenging today is we have a imperative to sometimes take the value chain in that product all the way back to the raw materials that go into it so sourcing of minerals and other substances has become a huge issue in supply chain management which means that we find ourselves in places like the Congo in Africa trying to determine whether or not so-called conflict minerals are being managed properly that that's very new in the last you know half a dozen years and I think the trend towards that sort of due diligence is only going to accelerate right absolutely yeah so you know kind of continuing on to that in terms of the conflict mineral issues and North Korean labor sanctions and other kind of issues there what what are some of your biggest challenges in getting visibility into the supply chain to address those social and environmental issues can you kind of talk through an example and some technologies that you leverage to get some of that visibility well I think a lot of what particularly large companies do in in tackling that particular challenge is to take a risk-based approach so in some instances it's just not possible to establish that each and every link in that chain is going to be managed responsibly you know simply because as you go further upstream oftentimes the relationship between the assembler or manufacturer like a flex is very tenuous I mean it's basically non-existent we don't have a contractual relationship with many of those actors and so try as we might to get responses from them about who they are and what they're doing in many cases they're simply non-responsive and there's lots of explanations for that I mean number one would be that in many cases they're simply not well educated on these issues and so when the requests filter down to them they're not able to intelligently respond so there's a lot of industry effort going on to educate all the players here but in other cases they simply may not be incentivized or feel compelled certainly to respond because the amount of spend to them just seems very small they're not motivated to respond so you know we all kind of collectively try and lean on the various actors to get completeness of responses but it's just sometimes not possible I'll just give you one example we have a very large conflict minerals due diligence program and we query over 5,000 suppliers these are all direct to flex 5,000 suppliers every year and even this program having been in existence for four or five years now our response rate is still only in the 60 to 70 percent range so we've still got a third or more of those suppliers from whom we simply do not get responses right right so a significant challenge getting any kind of feedback there is there what are the kind of efforts to ramp ramp that up or is that just an ongoing challenge it's ongoing I mean the I think the intelligence of the industry's conflict minerals approach is that they've identified sort of the key part in the value chain which are the smelters and refiners so these are the locations where the raw materials are then refined into a form that can be used in products and what we've tried to do is establish that that all of those smelters are being operated according to the code of conduct they're not employing children they're not funneling proceeds to armed groups and so on and increasingly we see customers come to us and say if we do not have information about a smelter or refiner or if it appears to be deficient in some way we want that removed from our supply chain so we're gradually disengaging with certain suppliers who are either not responsive or who are not adhering to the code right right great thanks yeah so we so on our poll on do you think firms should be held responsible for the actions of their suppliers we have a a positive group here so they they believe yes so 58 percent believe yes the majority 4 percent no and 38 percent which is the always the good answer is it depends yeah that's always my favorite answer as well and you know I have to have to say that you know kind of channeling some of my prior legal background that there's a fine line that most companies walk between establishing an expectation for a supplier and then trying to manage them to that expectation and controlling them so no company wants to be seen as controlling another party because then you might assume liability for what they're doing or they're or they're not doing so you know that's why I mentioned in some cases the remedy is not necessarily to assert control but to suspend business to reduce the amount of business you're sending them or in the worst cases you might have to disengage from doing business with them of course one other complication is there are certain suppliers who would be deemed critical for one reason or another they might you might be sole sourced for a particular component or they may be the only ones with sufficient supply of a component and we always make an attempt to try and work with a supplier to mitigate an issue and hopefully they'll be successful but sometimes that just doesn't happen sure yes absolutely so we talked a little bit about the how the regulation is forcing the hand in some cases the you know Dodd-Frank and others what about public and stakeholder pressure is that affecting affecting what you guys are doing or is it is that less of an issue because you're B2B? We don't see a lot of pressure directly applied to flex but I have to say you know it does kind of filter down at times and I'll mention a couple of trends so you talked about the public one of the trends that I see is in using procurement power to affect supply chains in one fashion or another so particularly governmental entities not only in the United States but in many parts of the world Scandinavia for instance is an area where there's a lot of that activity so what what governments have decided is look we are ourselves large consumers of many products and if we establish for ourselves standards for the purchase of those products we can potentially impact supply chains in a positive way now I think a lot of that began with what I'll call simpler products things like apparel and so on but they're increasingly putting their attention to electronics because of the press that has surrounded some of these issues things like conflict minerals as well as cobalt in Africa tin mining in various parts of the world and and so on the other phenomenon that you'll see in this space is that the biggest and most visible brands companies like apple amazon and others tend to get attacked if you will by stakeholder groups and the result of course is that those brands will then move as quickly as they possibly can to work with their manufacturing partners and other other members of their supply chain to determine you know first of all is there really an issue here and of course if there is um they're going to want to see it addressed very quickly and very completely so it does filter down I mean the the tactic that the the stakeholder groups used use is not surprising they can clearly garner a lot more attention and probably a lot more action by going after the brands than they could by going after a relatively unknown partner of theirs in the supply chain somewhere sure right absolutely that seems makes sense that it would be yeah and just let me add one more thing I was going to say I mean the the other phenomenon however is that a lot of times this this pressure doesn't seem to have great impact in in the marketplace I mean I think I could count a significant number of exposés for instance about Apple you know very damning headlines covers on magazines and so on it doesn't really seem to impact their share price or their operations greatly and so on and I think the other thing that has not caught up to the public procurement trend I mentioned is that individual consumers even those of us who are very well informed we don't tend to make our purchases based upon these criteria so you know everybody on this caulk could ask themselves how often do I go into a store and think real hard about how socially or environmentally responsible the producer of this product is you know whether it's electronics food and beverages and automobile and so on it just really hasn't permeated consumer behavior yet at least in my view sure yeah I can in our research we've seen some more things which is a little bit disheartening but we've seen that the most biggest concerns are things that people eat and put in their body and then less so what they put on their body and what's around them so we're kind of seeing a phase in terms of concern but okay great thanks so we'll run our next poll just to kind of see what students in your work where do you see some of the biggest environmental and social impacts so if you you're seeing it around you and if you could just try to limit it to one word just in terms of your perception of where those impacts are so we'll jump to a little bit of a different topic and wondering you know what can you talk a little bit about flex's role in extended producer responsibility and product take back and how this might affect your design and production is this is something that is pressing on you or how is that impacting your work yeah we have a an entire group in fact that offers those sorts of services to customers so remanufacturing of products refurbishment of products repair of products now for companies like ours and for most of the brands that we're familiar with a lot of that activity takes place while the product is still under warranty so you purchase a product it's got a let's say a two or three year warranty it does not operate as advertised you return it it's then given to a company like flex where we'll perform diagnostics on it and make the repairs and and return it to the to the brand now the brand may redeliver it to you or they may have given you a new model and now they're going to resell a product and brand it as refurbished and I'm sure we've all seen examples of that what we're seeing today is more customers coming to us looking for completely circular services as well as you know design concepts so that they can not only do all those sorts of things I just mentioned but eventually take back the product after the warranty period has expired after the product has has served its useful life and we're helping customers figure out how to harvest the useful parts how to recycle them and reuse them in some cases and we have a couple of interesting examples I'll mention we have an operation that we run for a company that produces multifunction devices so these are copiers the type you see in your offices and so on now they promote circularity by primarily leasing those devices so what that means is when it comes off lease they collect the device it comes back into our factory we do the type of diagnostics I mentioned earlier and then we go about repairing it and putting it back in basically a brand new condition so we pound out dents you know like an auto body shop we pull off parts and what distinguishes this particular operation from some of our others we actually have an onsite recycling operation there where we we will shred plastic parts and metal parts and then we reuse it as feedstock for making new parts that go back into the machines we deliver them back to this customer and then they they release them again so a perfect example it works well for the types of products that have you know fairly significant residual value I think one of the challenges for the industry is how do we promote more of that in fast-moving products products that don't have as long a useful life don't have as much residual value and you mentioned design that's a critical component of it because if you design the product in less than an optimal fashion you can make it very hard on yourself to disassemble it you can make it very hard to reuse the materials and in some cases you're forced to dispose of more of the product content because of those choices you made back in the design phase so design for environment is a big big topic today right yeah absolutely and that's really interesting kind of the different models now and seeing more things like surfaceization where you take it back and it's sort of the life of the use instead of just the single use product so that's it's interesting to see that it's impacting you guys as well so actually in our poll we're seeing a lot of different ways that environmental and social impact is impacting some of our learners are saying we're seeing a lot of plastic data centers as a big energy source e-waste obviously is becoming sort of an issue that they're saying as well seeing as well and what are the other ones labor or excuse me labor has come up a couple times and then logistics and transportation so kind of across the board in terms of where they're seeing it in their work in terms of big environmental and social impact yeah we probably touch on on all of those issues our biggest business by revenue is in networking and communications equipment and the companies who we work with they're either on data center products or others are very interested in the energy consumption for those products and actually that's a good another good example of circularity many of the companies in that space are able to take those types of products out of service and remove a lot of the components and reuse them because it's back in a data somewhere it's not visible it's not a consumer product so they are exclusively focused on functionality and less on things like aesthetics and so on right right great so we're just gonna so I'm gonna just run through one or two more questions I really want to get to the student questions because there's quite a few populating and that's they have some great questions waiting so we'll just run our our last poll and just make sure everyone on that to go and fill it out on on poll at Slido so for students if in your role have you seen requests for more social and environmental responsibility in the supply chain by consumers or buyers as as Bruce had kind of touched on that some some buyers are are kind of pressuring their suppliers to then integrate more social and environmental responsibility so on that kind of note Bruce how have you seen sustainable supply chain management change over the last 20 plus years that you've been in it really well I think you just mentioned one of the key ones which which is I'll call customer pressure or customer interest certainly and part of that is related to the way business is done today so businesses like flex grew because companies wanted to get out of the manufacturing end of the business so electronics is a perfect example of a sector that's very highly outsourced globalized and so products are assembled from materials that come from all over the world and so what that means is a brand that wants to establish its own responsibility has to be concerned about the responsibility of its partners its supply chain partners and so I like to say sometimes that we're effectively an extension of their business so if you come to a Hewlett Packard or an Apple or any of the brands you recognize and you ask them are your products made responsibly the only way they can answer that question is to assure themselves that their partners like flex and others are acting responsibly as well so I see a lot more engagement with our customers and it's moved from the early stages where they would put out very large specifications codes and things of that nature to you know genuine one-on-one engagement where we work together to try and mitigate issues or as I mentioned before to capture opportunities so we look at attributed emissions we look at electricity consumption we look at material usage like we just discussed and we certainly share interest with them in the welfare of all the workers whom we employ as well as our suppliers workforces great so on sir kind of continuing on with that now that we've talked about how it's changed over the last 20 years what are what are future issues you see emerging as related to sustainability and supply chains and how do you think the students can prepare themselves you know really in any position for some of these emerging issues one thing i think that's worth recognizing you know for everybody is there there is certainly a shift moving in terms of the level of focus now let me explain what i mean by that so you know i think traditionally the focus was at the enterprise level and kind of the earliest stages of supply chain management so we would establish that at the enterprise level flex or some other partner had the right policies procedures commitments in place and so on in the last number of years it's moved very quickly to focus upon factories so then the question was not just is flex a well managed responsible company can you help me understand that the factory that's being used to manufacture our products is itself being run in a good manner so we will oftentimes see customers say we want you to perform an audit at the half dozen factories that are used to assemble our products now what's emerging today and that is making you know sustainable supply chain management so much more challenging is now the the emphasis in some cases is shifting to the product and we you know we talked about this a little bit so when you want to establish that a entire product is assembled in a sustainable fashion well then then you're going to perhaps go all the way back to the raw materials that are in all of those components and all of a sudden you've magnified the due diligence challenge considerably many times over and as i said in some cases there's issues with non-responsiveness or lack of visibility for many other reasons or and this makes it really tough in some cases the issues you're dealing with are just intractable i mean they're very difficult to manage or mitigate so if there's tin in the solder and all my components and a good percentage of it is derived from a mine in indonesia that's got some very serious environmental issues i can't really easily resolve the issues at that mine so i'm left with a very difficult challenge of could we potentially remove that particular source of tin from the supply chain so these are all new sorts of issues um and becoming very tough for us right and is there any advice you think that students can kind of prepare themselves for some of these coming down the line yeah that that's a great question and i i think you really do have to be essentially a lifelong learner to be in this business so you've got to be attuned and aware of these sorts of issues that i mentioned you know perhaps around the entire world i can't i can't say that i'm consuming you know news necessarily from every part of the globe but i'm certainly staying on top of professional journals and publications and so on trying to spot the emerging trends to get in front of them because you don't want to have to deal with it right in the midst of what might be termed a crisis in one form or another the other thing that i think is quickly emerging and certainly everyone needs to be aware of and hopefully well versed in at some point would be new technologies that can help us address some of these issues so remote monitoring for energy management water management and so on potentially the use of blockchain or similar technologies for traceability of certain types of components or products and very quickly we're also seeing the application of advanced analytics whether it's machine learning or artificial intelligence to analyze information and help us spot trends because you know we're in this age of big data and it's not as easily manipulated as it once was and so if we're really going to for instance tackle that product level due diligence and a mass a huge amount of data i might need new tools to figure out what i'm looking at there right absolutely no that's that's great and actually for you're talking to the right crowd because we got a we got a whole group of lifelong learners who are really kind of proactively trying to educate themselves on some of these issues and then kind of segwaying actually exactly what Bruce was talking about some of the the the exact issues we're going to be touching on that in sc4x supply chain technology and systems so if you guys aren't already enrolled i suggest you enroll now because it's starting right away so great so let me just review our poll our last poll and then i'm going to start taking questions from the crowd so in in in terms of their roles our group has seen more requests from for social environment responsibility from consumers or buyers a majority says yes 39 percent 27 percent say no six percent say i'm not sure and 27 percent say that's not my position so does seem at least a significant majority are seeing requests from consumers and buyers yeah that that doesn't surprise me and um and one other thing i'll just close on that question with is i think it's also very important to be networking and to identify opportunities for collaboration even even a company as large as ours i think some of the most valuable work that we do is really in collaboration with others not just customers but competitors and other actors within the supply chain because we we simply don't have the resources to tackle these things ourselves i could not put people on the ground in the democratic republic of the congo to do the due diligence but the industry associations we belong to are able to pull that together and then we can leverage it right right yeah absolutely that's always a promising sort of these industry collaborations that are making progress there great all right so we have quite a few questions coming in so i'm just going to start pulling ones that have been upvoted so many people voted for them so one of our our esteemed cta's param has asked with the advent of iot we are likely to see far more prevalence of electronic items across the world as you've already mentioned how can this increase in e-waste be made sustainable yes i i think that's definitely going to be a pressing issue in the future and i mentioned one of the ways of addressing that which is designed for environment so i think you've got to choose materials carefully i'll just give you one example we had a a medical you know healthcare company come to us we've been working with them on quite a number of products and because of issues with hygiene and transmission of germs and so on a lot of things in the medical industry are single use and then disposable so in this particular instance they said look you know we're asking you to make 50 million units of this particular device is there a material that would be degradable bio degradable or much more easy to break down in the environment than the one that we're currently using and we worked with them to identify the right material for that so all those sorts of questions are going to need to be asked about this you know this plethora of devices that we're going to see everywhere sure absolutely great so now pivoting a little bit so mike chi asks in class so in our class we're actually talking about supply chain risk and risk management which you touched on a little bit but can you tell us a little bit about how flex monitors your global supply chain and response quickly and i i know this is a strength of your guys with a increasing awareness and invisibility so any comments on that yeah let me let me describe the approach a little bit so as i mentioned before it's it's risk-based and what that means is we typically begin with what we call our preferred suppliers so these are the suppliers from whom we purchase the largest amounts of material or services and so while our overall supply chain is comprised of thousands of suppliers the number of preferred suppliers is in the hundreds so we focus more attention on them which enables us to say that we've got a large percentage of our spend covered then we start to sort through the other suppliers based on various criteria and that could be geography do they happen to operate in a risky part of the world what sort of commodity are we talking about as one that's produced with a chemically intensive process are they located in an area or is it the type of business that requires a lot of labor which might mean that we have some underage labor or forced labor risks and so we're kind of funneling in that fashion and then focusing our attention in that way i do anticipate that with with some additional tools being put in place some new software platforms that we're putting in we could probably spend more time with all of the suppliers but right now we have to zero in on the riskiest ones absolutely right with the number of suppliers you have makes the most sense so daniel amesqua has asked so he comments that nike is a customer for flex now how and there have been cases where nike uses suppliers uses nike suppliers use child labor how flex is how is flex ensuring that that's not the case in current operations yeah our operation that we set up for nike happens to be in guadalajara mexico we created a factory for them and the idea was that it would include advanced automation so while we do still employ thousands of people there in the factory we also have a very high amount of of automation of machinery in the factory and we're just producing shoes for them so no electronics it's a new operation for us i think nike is an extraordinary company in terms of their commitment today they're not the same company that they were many years ago or alleged to be many years ago so they're a great partner and we managed that particular factory within our overall campus to exactly the same standards that we run are all of our operations too and so i don't think that factory is in any way reflective of of some of the issues that are alleged to be in the primarily the asia region you know with bangladesh and many other parts of the world where garments are produced so it's been a great collaboration and hopefully we'll expand in the future but it begins with establishing that we would run this operation to our standards as well as nike's high standards right from the outset right great and in terms of you know sort of the the distance there in terms of having it in mexico versus in asia do you think there's any issues in terms of that that you have more control or is that not a factor well the the location is based upon some of the factors i mentioned before in this case it was proximity to the north american market essentially that's why the first factory went in there nike is pursuing a a concept called mass customization in part so the idea is that you know any of us who are consumers of their products would be able to go on order the product and customize it in some ways the order would be placed it would be produced as quickly as possible in this new factory and then it would be shipped and be on your doorstep in a relatively small amount of time and so in order to do that all the factories that they employ for this purpose are going to be close to large markets whether it's the united states later in europe and then you know potentially in parts of asia as well great so remember everyone if if you see a question on there that you want to upvote that makes it easier i will ask that one probably more likely knowing that you guys are interested in it so just to jump to one and you mentioned it briefly and i know it's a hot topic for everyone right now bobby asked has flex looked at the use of blockchain technology for verifying suppliers and in the supply chain and what challenges have you observed if so we have examined it we've we've spoken to a number of partners who are active in that space i'm i'm sort of counting myself as one of the blockchain skeptics at the moment at least based on my understanding of it i i think it is very well suited to tracing you know establishing the provenance of certain products i know it's being used for instance for fisheries so that when you know a large tuna is landed it's placed in the blockchain ledger and then it's traced from that point on so that when it finally reaches the grocery or whatever the destination is they can establish this was the same fish caught responsibly and so on the difficulty in my view with using blockchain for some of the issues that we've mentioned here is that there there are so many factors involved in judging whether or not an operation is socially and environmentally responsible that it's difficult to make a an entry in a ledger you know electronic or otherwise that conveys all of that information a typical audit of a factory might have 300 or more different criteria that are looked at and the results are going to be nuanced they're not going to be black and white it may be that something is in a perfectly acceptable condition or it may just be marginally acceptable and then we're going to require remediation so at the moment i don't see that blockchain can easily be used for all of those purposes so i'm keeping a very close eye on it and seeing what vendors and others are going to offer in the way of use cases so inside flex we are beginning to use blockchain for more traditional management of financial transactions first okay great yeah that's we've kind of seen the the range of perspectives on blockchain recently it's great to hear sort of a more cautious perspective we've seen similar things in some of our research where the the data is a challenge and even getting the correct data is is you know it kind of upstream suppliers collecting and inputting that data is the existing challenge so to jump us so suman asks for for some companies csr is really up and beyond above the main operations of the business and so he wonders so for supply chain managers how important is to kind of grapple with corporate social responsibility as compared to the main operations of the business yeah another really good question and this is a phenomenon that we see quite a bit i mentioned before that in some cases the supply chain needs to be educated about particular issues well we clearly recognize that for particularly for smaller and medium-sized enterprises they're much more concerned in most instances with other other factors that relate to their business being of course being profitable and being able to sustain their operations so i think it's a question of prioritizing certain elements of it because it's going to be important to establish that that you are a responsible component in somebody else's supply chain and i think a scrutiny increases with some of the tools i mentioned even if you're relatively far upstream relatively small in terms of size you know the spotlight can be turned on you and you're going to have to establish that you've got some of the basics in place it could be ISO 14001 environmental management registration but even if you're not registered to that system you should have some basic policies in place and you should be paying attention in all cases to the types of showstoppers i mentioned we do not want any of our partners anywhere in the chain to be employing children we do not want forced labor which is a scourge you know in so many parts of the world and we certainly don't want to discover that an operation is you know horribly dirty from an environmental standpoint because all of those things could tarnish our reputation in some fashion right absolutely so yeah we have a few more minutes so we'll just grab a few more questions and then we'll wrap it up so we you touch on it a little bit but martin asks how important our reverse logistics reflects and can you comment on some of the practices flex has in this area yes the only way to to facilitate some of the circular economy concepts i mentioned before is to be able to effectively get goods back to the right places where they can be refurbished repaired taken apart and recycled and so on and if you think about the range of products we see today there's a spectrum you know along which they fall where some are easier to collect than others if you've got low volume industrial products those can be brought back and then brought to a central location the challenge that many brands and their partners are facing is that with with higher volume products how do you collect them all and then get them to those same places where the where the work can be done and you know we've seen efforts that have been more or less successful maybe you can bring it into your local best buy maybe you can bring it into some other sort of drop-off location maybe you bring it back to the phone store where you purchased the handset to begin with one of the things we're doing with one of our partners our customers i should say in brazil is we have an operation down there that focuses on some of these types of services and we've applied rfid tags to each and every unit that we produce from them and so they're able to track it you know using handheld devices and so we can create a log essentially of all the units and figure out you know where they are in terms of maintenance useful life and so on someone else mentioned iot earlier once iot becomes more prevalent we'll be able to do a lot of that remotely and we won't have to have the same manual effort so it's an absolutely critical element in this whole puzzle and i think we actually need to see more investment in some of the infrastructure because because today our recycling markets and reverse logistics operations you know are not as smooth and not as proliferated as they need to be right right great thanks great examples um so this is a question that i think is always a sort of an it depends but samed asks how rcsr activities affecting the profitability of supply chains positively or negatively i i think there's great potential for it to be you know a positive i'll just mention you know a couple of examples in the last year i've seen many more instances where we were bidding on new business where my team and i were asked to participate directly in the preparation of our our response to the proposals and then in many of the actual presentations and so on i've run workshops for prospective customers where we were asked to show them on the ground some of the things i've been speaking about and we were very fortunate that when the decision was made it was one of the factors they cited in awarding us the business in one case they said you know we think you just know how to do this better than we do and we feel very comfortable working with you i mean you know i was kind of floating for you know a couple of weeks there i mean that's great type of publicity for the work we do internally and i think that kind of story can be replicated at any stage of the supply chain i think there needs to be more attention focused on it frankly i mean a lot of sustainable purchasing programs that we've seen in the past really more qualification than actual awards of business and i know i've heard from some colleagues at other companies who have said we went through a lot of effort to create a more sustainable solution here and then we just did not get the business it all came down to cost quality or some other more traditional factors so we we need to see more businesses walking the talk here to incentivize us to keep working on these issues on the flip side as i said i think most large companies and their partners like to work through issues rather than immediately disengage or terminate suppliers so there are many instances of where it's happened where a supplier has been terminated but it usually doesn't come immediately there's usually an effort made to to get to the heart of the problem so my advice to everybody would be if you're sitting on an issue like that and it comes to your attention and your customers do not ignore it because you'll do so at your own risk right absolutely actually and this next question links perfectly with this with that which uh is would you share some of vj ask would you share some leadership tips and motivating organizations for csr efforts one i'm very fond of is um you know we worked through some issues of our own um in in a part of south asia where we were employing foreign migrant workers and um through a very concerted effort um we were able to improve those conditions considerably um workers who had in some instances come to us through labor agencies and had paid fees were put under contract to flex directly we saw that the workers were reimbursed for those fees uh and we spent a lot of time and and effort improving the hostels where they were housed um and other living conditions and um what i'm getting at is is i've i've made an emotional appeal to some of my colleagues based on a lot of that work and i think they appreciated that because it's not every day that you come to work and you're able to say i improved the lives of thousands of individuals and i i think we have to remember that you know this is not all just a paper and pen exercise we're really talking about workers um and their families throughout our value chains and and what we're doing um has a real impact same thing with with environment um we need to respect the communities where we operate and if we can demonstrate a real impact um it's not just to the benefit of our company it's all of our neighbors and the community where that that operation is located so i i like to make those emotional appeals you don't want to overdo it but you want to remind people that you know what you're working on there and then the other of course is what we've talked about quite a bit now which is customer pull when people ask me what's the biggest driver that's immediately what i offer as an answer answer if we're going to delight our customers we want to establish that we're responsible and what what this really is at the end of the day is trust they need to trust that they're working with the right partners we never pretend that we're perfect but we like them to trust in that our commitment is real it's genuine and that we're working very hard to improve every day and so they can say the same thing to their stakeholders great i think actually that is a that's a perfect ending to to to our interview and sort of how you can motivate these issues even even with the challenges so we have a 10 great questions left and i'm sorry for those that we didn't get to address today just a final sign off bruce do you have any suggestions for our supply chain learners as they as they continue their professional career any any final advice yeah the other the other thing i would say is that we're talking about what really is an interdisciplinary sort of effort so and i'm sure everyone you know is participating in this course can and appreciate that i need to understand logistics sufficiently so that i can converse intelligently with my colleagues they need to educate me on how that part of the business runs i can educate them on greenhouse gas management and some of the issues there and so on same thing is true with supply chain management with human resources and so on i mean at various times in my career i called myself an environmental professional i probably have you know more background there than in other areas but in the last five years i've spent so much time working on human rights that that now i've gotten enough expertise there to be effective um but there are people who spend you know every minute of their working life on those issues and and i don't pretend to be as as versed as they are so you've got to do two things number one make yourself more intelligent on on all of those subjects but i mentioned before collaboration um this is a team effort and so you need to understand how to work effectively with others and then together you can tackle these issues so you know that involves communication analysis you know many many of the soft skills that everyone will be familiar with but don't overlook them right now that's great advice and definitely working across a supply chain to working across company departments working across the supply chain i think that's a it's a huge lesson and then also one that we try to enforce in our in our courses as well so it's great to be reinforced by yourself um great so we came up the hour i want to be conscious of everyone's time thank you everyone for joining us it was a great discussion great question sorry we didn't get to them all and and and finally of course thank you so much bruce for joining us it was a super interesting discussion and and we really appreciate all your insight today yeah my pleasure alexis uh take care everyone thank you