CONTINUOUSLY STRIVING TO DELIVER PROCUREMENT PROWESS
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MELLANOX TECHNOLOGIES: EMPOWERMENT THROUGH PROCUREMENT WRIT TEN BY
DA LE BENTON PRODUCED BY
HE Y K EL OUNI
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Through a vision of continuous improvement, Mellanox Technologies places procurement at its heart
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n the procurement space, having a strong relationship internally with the wider business is proving
just as crucial as establishing a strong relationship with suppliers. Over the past decade there has been a paradigm shift 04
that has seen procurement move away from its traditional “support” function role as it becomes far more aligned to business strategy. Nowhere is this more apparent than Mellanox Technologies, a leading supplier of end-to-end interconnect solutions. Over the last few years Mellanox Technologies has gone to great lengths to ensure that its customer facing teams are fully supported by an efficient and robust procurement function. “At Mellanox, procurement has a very special place,” says Oshri Cohen, Vice President of Purchasing and Logistics. “Procurement is involved at the very beginning of a project, through mass production and right
“ We are providing support throughout a product lifecycle and so what we are doing is overseeing product cost and deliverability from top to bottom” — Oshri Cohen, Vice President of Purchasing and Logistics.
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CLICK TO WATCH: MELLANOX TECHNOLGIES OVERVIEW 07
up until the product’s end of life. We are providing support all throughout a
the best people from within. “The fact that I had the chance to
product lifecycle and so what we are
touch almost every operation issue
doing is overseeing product cost and
by myself, provided me the chance
deliverability from top to bottom.”
to learn a lot and prepared me very well
Oshri first joined Mellanox in 2007
to the role I’m holding today. When you
as an NPI Manager. Over the years
know, theoretically, what the right thing
his role evolved as he took on more
to do is and you’re connected to your
procurement responsibility before
organisational DNA, then your chances
taking on his current role in 2012. He
to take the right decision and do the
feels that this experience of growing
right implementation are very high,” he
within the company and developing a
says. “Luckily, I grew up inside Mellanox
strong procurement team is a testa-
and so did my great team. I think that
ment to Mellanox and its ability to grow
this is a winning formula to succeed.” w w w. m e l l a n o x . c o m
Through his career with Mellanox he has seen first-hand this shift in understanding what procurement can deliver
That is a short-term activity,” he says. “Procurement today is responsibile to
to a business. He feels that now more
establish a strong enough supply chain
than ever before a good strong procure-
to enable company growth and even
ment function that is aligned to the right
bring added value to the company’s
vendors can be the key difference; not
customers. These values can be game
only in delivering success but staying
changers, as customers are exposing
ahead of competitors.
themselves less to commitments but
“Traditional procurement was centred around taking care of orders
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and essentially focusing on shortages.
still demanding complete times.” “I think procurement has a main role
“Procurement today is a responsibility to establish a strong enough supply chain to enable company growth and even bring added value to the company’s customers” — Oshri Cohen, Vice President of Purchasing and Logistics.
of making sure that we are enabling
Mellanox to grow and to invest into
business on our end, while also
spaces it might not have done otherwise.
protecting the company from over exposure.” As Oshri notes, the market have
“Customers are getting smarter and have access to greater information and technology,” says Oshri. “This allows
changed and are continuously chang-
them to compare better and to under-
ing as procurement continues to evolve.
stand where their investments could
The company prides itself on how it can
and should be made. If an organisation
continue to provide creative solutions
or a business intends to grow and
to meet the evolving demands.
intends to be better than its competitors,
It is this approach that has allowed
then it has to continue to find ways to
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become better and better and listening
this data to gain a better understand-
to customers is key to doing that.�
ing of those customers and suppliers
The technology conversation in procurement is defined more and
and a better insight into how Mellanox can grow and improve.
more by data and data analysis. With a supplier and customer base from all
SUCCESS THROUGH COLLABORATION
over the world, Mellanox has access
Vital to this understanding is collabora-
to incredible amounts of data and
tion between the procurement function
information. Through technology
and the wider Mellanox business.
solutions, Oshri and his team can use
Oshri is incredibly proud of the unique w w w. m e l l a n o x . c o m
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collaboration that procurement has
talk the same language and achieve
with the design team as it allows the
the corporate goals we get.”
two teams to create a roadmap to
For Oshri, the key to enabling
achieving greater cost savings while
success for Mellanox lies in fostering
enabling efficiencies together.
and developing collaborative relation-
“Collaboration is a must to achieve our goals,” he says. “We stay aligned
ships across the business. “Procurement can be proactive or
in front of the HW team, around the
reactive. Working with HW teams, we
same targets of quality, cost and avail-
are getting involved at the very early
ability. This enables both groups to
stages of the product design process. w w w. m e l l a n o x . c o m
proactive in eliminating potential
CHANGING TECHNOLOGIES AND CHANGING CUSTOMERS
supply chain risks,” he says.
A particular challenge for companies
This allows procurement to be
“It makes our supply chain stronger and more robust. Once the products
logical innovation is understanding
are moving to mass production, opera-
the right technologies to implement.
tions are able to support those prod-
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in any sector embracing this techno-
In the quest to outweigh competitors,
ucts without any special issues
one could be forgiven for investing in
or surprises.”
technologies for the sake of keeping
“We know our customers are measuring us and so we constantly look to better understand how we are perceived, this leads to continuous improvement” — Oshri Cohen, Vice President of Purchasing and Logistics.
up, rather than investing smartly. This is a challenge that Oshri recognises, but he understands that the most important part of the Mellanox equation is the customer. Through this understanding, Mellanox continuously challenges itself against a series of KPIs that are defined by the customer which allows the company to be more focused moving forward. “We know our customers are measuring us and so we constantly look to better understand how we are perceived,” he says. “This leads to continuous improvement. Even from a technology perspective, we implement technologies and look at how it is received by customers. We are constantly evaluating ourw w w. m e l l a n o x . c o m
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CLICK TO WATCH: MELLANOX WORLD END 17
selves to ensure we are delivering
does its customer base. For him, Mel-
value to our customers.”
lanox could not succeed without them. But how does Mellanox establish and
SUPPLIER NETWORK
foster relationships with key suppliers
A defining component of what Oshri
in order to continue to bring value to
strives to achieve with Mellanox is
Mellanox and its customers, while also
that strong and robust supply chain
growing and developing the suppliers
network. A procurement function can
themselves?
have all the best tools at its disposal, but
“We prefer to find partners that can
it’s all for nothing if there isn’t a supplier
provide us real added values in terms
network in place.
of technology, supply chain and quality
Oshri understands this and approach-
and we invest in those partner relation-
es Mellanox’s supplier network with the
ships as if they were our customers,”
same level of care and attention as he
says Oshri. w w w. m e l l a n o x . c o m
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“We should enable Mellanox to penetrate the new markets it aims to. We should allow the company to compete by keep suggesting short lead times, competitive prices and best quality products ” — Oshri Cohen, Vice President of Purchasing and Logistics.
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“The strongest partners we have,
firmly believes that trust is devel-
are the ones we experienced some
oped through transparency and
difficulties with and we had to
communication.
manage a few crises. Real partners
“Very similar to marriage, such
are not only being measured when
relationships need to be maintained,”
the business is perfect and blooming.
he says. “Along the way we must keep
The painful hours are the ones to
transparent in order to hear and say
expose the real partners.”
our observations, so in case any
Key to fostering these relationships is establishing trust and Oshri
adjustments need to be done, we will know about it and act accordingly.” w w w. m e l l a n o x . c o m
“ We prefer to find partners that can provide us real added values in terms of technology, supply chain and quality and we invest in those partner relationships as if they were our customers” — Oshri Cohen, Vice President of Purchasing and Logistics.
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THE FUTURE OF MELLANOX
positioned in the core of the business,
As part of its entire DNA, Mellanox
but there is always place to improve.”
will continuously strive to improve in
he says.
order to better serve its customers.
“We should enable Mellanox to pen-
Oshri is proud of where the company’s
etrate the new markets it aims to. We
procurement function is in terms of its
should allow the company to compete
alignment with the core business strat-
by keep suggesting short lead times,
egy, but even he himself approaches
competitive prices and best quality
each day with a means of improving.
products. Procurement is one of the
The company is looking to break into
key groups to enable such plan.”
new markets and Oshri believes that it cannot even begin to think about doing this, without this continuous improvement approach to procurement. “Mellanox’s procurement is well w w w. m e l l a n o x . c o m
Mellanox Technologies, Ltd. Hakidma 26, Ofer Industrial Park, Yokneam, Israel. T +972-74-723-7200 | www.mellanox.com