Lizet Tymon, the senior supply chain management director at Jabil
Jabil (NYSE: JBL) is headquartered in the United States. The company engages in contract manufacturing services for companies. Jabil’s 450 clients – across 15 different industries – have branded products. Sometimes, Jabil helps design the products. Then Jabil handles the sourcing and manufacturing of those products. Jabil then often also takes care of the packaging and final distribution of products for their clients. Ms. Tymon’s contribution to Jabil’s offerings is a service line known as ‘planning-as-a-service.’
Using a contract manufacturer allows companies to focus on their core competencies, which usually are not designing a product for manufacturing, production, or supply chain management. Jabil’s customers can focus on marketing, sales, and support, while Jabil focuses on supply chain excellence.
Jabil is a big company. In the last fiscal year, the company had more than 260,000 employees that generated over $29 billion in revenue. They are sourcing from over 27,000 suppliers. Manufacturing occurs at over 115 sites around the world. Those sites are primarily located in China, Hungary, Malaysia, Mexico, Singapore, and the United States.
Ms. Tymon started at Jabil in 2002, after earning a degree in Industrial Engineering from Tecnológico de Monterrey. She worked as a production planner, a master planner, a demand planner, and inventory manager, before leading a team of demand planners in 2015. An important element of Jabil’s strategy is to establish and maintain long-term relationships with their clients.
With one client, a company that sells electronics products used by retailers around the world, Ms. Tymon had developed a particularly close relationship. This customer’s retail customers included some of the largest retailers in the world. Store associates used their customer’s products to improve store operations.
To support this customer, Jabil supported a complex configure to order business. The products Jabil manufactured had tens of thousands of distinct configuration options. Following production, Jabil shipped the final products directly to their customer’s retail customers. In short, this was a supply chain with high complexity.
In winning the business, Jabil had committed themselves to being able to turn inventory 12 times a year. They were only doing four turns. They had over 100 days of inventory on hand. They should have had less than 30.
Jabil, perhaps, should not have made these commitments because their customer oversaw the demand planning process and then forwarded their forecast to Jabil. This is normally how things are done; customers give a contract manufacturer their demand projection and it is the job of the contract manufacturer to execute that plan. While managed transportation – the outsourcing of transportation planning – is a billion dollar plus market, planning-as-a-service in supply chain planning remains a small market.
But this customer just could not get the forecast right. The forecast changed frequently, and the changes often came in periods too short for Jabil to adjust their orders to suppliers. And while the total quantity forecasted was acceptable, the product mix forecast was terrible. The inevitable result was high inventory levels.
Ms. Tymon learned that Jabil had bought advanced demand planning solution from a supply chain planning software company called Kinaxis. But the software was shelfware, it had not been implemented and was not being used. After a Kinaxis representative came into their office in St. Petersburg and demonstrated the software’s capabilities, Ms. Tymon realized this could be the solution to the demand planning problems Jabil and their customer were facing.
She inquired, “why is no one using this? There was no good answer. It was overlooked.” The company was using limited homegrown tools and Excel while they were “sitting on Kinaxis!”
“This was the defining moment of my career,” Ms. Tymon said. “Why not use it?” She talked to decision makers and began to build a case for it. She was building a vision, a business case, and a coalition. “Nobody assigned me to do this.” Business leaders from the industry sector she worked in funded an investigation into the business case. Then they funded a pilot, then a go live.
And when Ms. Tymon broached the subject of Jabil doing the planning for their customer and using Kinaxis, the customer initially investigated implementing the Kinaxis solution themselves. They ultimately decided that might not make sense for them and they then investigated a planning-as-a-service relationship with Jabil.
“A lot of effort by our people went into creating this proposal and presenting it to the customer,” Ms. Tymon said. Jabil was selling the idea that a more collaborative and trusting demand planning process would improve their customer’s cash flows. Many details had to be ironed out. How, when, and by whom could demand plans be changed? “We worked for weeks to iron out these kinds of details.” But based on their trust in the relationship with Jabil, a relationship that Ms. Tymon had helped nurture over five years, they decided that Jabil could do the planning better than they could.
It was agreed that Jabil would use an advanced planning solution to determine all the reorder points, engage in inventory optimization, and create a more strategic approach to demand management. One of their customer’s demand planners ended up joining the Jabil planning team.
And during this whole project, Ms. Tymon still had to support 20 other customers and perform all her normal tasks. Getting the project to the finish line made for some very long days.
But this became a very successful initiative. Ms. Tymon evangelized the success of this program and planning-as-a-service began to be sold to other customers. Today, there are 20 planning-as-a-service clients. Planning-as-a-service relationships tend to be stickier and more profitable for Jabil, even as they improve cash flows for Jabil’s customers. Planning-as-a-service ranges from collaboration on forecasting, to outsourced demand planning, to inventory optimization.
Subsequently, Jabil also decided to implement Kinaxis’s RapidResponse suite of solutions across a division with 200 business units and a community of 3000 supply chain people across 115 global sites. This division generated more than half of Jabil’s revenues. Ms. Tymon was promoted to director of advanced planning in 2015 and led this initiative. She led a multifunctional team to design, develop and deploy an integrated sales & operations planning (S&OP) solution. The suite includes demand planning, material constraint planning, order management, capacity planning & supplier collaboration solutions. She also stood up a center of excellence to support the Kinaxis solution that was responsible for training and implementation of the new tool kit.
The Kinaxis tools support concurrent planning. Concurrent planning involves creating scenarios in a supply plan, or an inventory plan, or a demand plan, and then seeing how the changes made to one plan ripple to the adjacent plans in real-time. This allows for a more agile sale & operations planning process. Prior to Kinaxis, Jabil was in a much more reactive mode. Now their ability to plan for many different eventualities is vastly superior.
One key to a robust S&OP process is running many scenarios on how best to balance demand with supply constraints. At Jabil, across all their customers, the company use to run 3,000 scenarios during the month-long S&OP process. But their experience with the solution has matured; Jabil now routinely run 5,000 plus scenarios. “We got the solution in just in time,” Ms. Tymon exclaimed. “COVID hit and we needed to run many, many more scenarios.”
In 2019, Ms. Tymon was promoted to the position of senior supply chain management director. She is now responsible for supporting the Kinaxis toolset for all supply chain planning, across all divisions, globally. Ms. Tymon is an entrepreneur, she created a new business line for Jabil. Entrepreneurs are often rewarded.