Championing Digital Transformation Through Supply Chain Innovation
Championing Digital Transformation Through SupplyInnovationChain
Infinera is a global supplier of leading-edge optical networking solutions and advanced optical semiconductors that enable telecommunications network operators to scale bandwidth and accelerate service innovation.
ocused on excellence, Infinera provides solutions that deliver industryleading economics and performance in longhaul, submarine, data centre interconnect and metro transport applications. Infinera’s agile, open, compact and modular networking platforms enable network operators to rapidly and easily take advantage of best-in-class technology.
Headquartered in Silicon Valley, California in the US, Infinera is revolutionising telecommunications networks by developing innovative, industryleading connectivity solutions including systems for network infrastructure, automation software, high-end subcomponent
technology and professional services.
As the company expands its horizons, Infinera is undergoing a sustained period of digital transformation and product transitions aligned with long-term business planning.
Here to share insights into how supply chain innovation underpins digital transformation and spans multiple business teams are Timothy Leight, Vice President of Supply Chain and Anil Som, Senior Director of Operations.
Digital Transformation
The supply chain innovation underpinning the digital transformation at Infinera
comprises supply- and demand-side developments.
To understand the current digital transformation efforts at Infinera from the demand side, Anil takes us back to 2018 when the company acquired Coriant, a privately held global supplier of open network solutions for the largest global network operators. The deal positioned Infinera as one of the largest vertically integrated optical network equipment providers in the world.
“One of the first goals for us was to make sure we could get all the IT systems together,” recounts Anil. “Similar to other acquisitions, multiple ERP systems needed to be integrated, so we immediately got all that in place. But then we realised that we needed to transform our sales and operational processes and as part of that redefine our demand and supply planning. Even though we did have what we used to call the sales and operational planning process in place, it was rudimentary in nature. We were largely focused on demand planning in the near term. We would ask what's happening this quarter, maybe what's happening next quarter as opposed to looking further ahead – four, eight or more quarters into the future.
“So one of the key aspects of the transformation we identified as a
focus was, how do we enable the sales and operational planning to be more strategic? We wanted to be more collaborative in nature, so rather than being an isolated operations or supply chain team, how could we collaborate with our sales operations teams, finance team, direct sales team and product lifecycle management team? We asked how we could all collaboratively come together, look at the various forecast signals and come up with a long-term demand signal that could then be sent to our suppliers. And as part of that, we've
transformed both on the process side and on the technology side.”
Timothy adds that new product introduction (NPI) was a crucial factor in the sales and operation planning (S&OP) process during this transitional phase.
“Seeing that ability for us to look at the NPI programmes in the S&OP process for at least eight quarters out, and to look at better managing the product transitions, was a game changer. These were two areas that really have benefitted Infinera in
“We build products by the thousands or even just hundreds. Getting to tens of thousands is outside of our norm, but that is changing now as we ramp our pluggable transceiver product portfolio”
Timothy Leight, Vice President of Supply Chain
terms of planning in recent years,” summarises Timothy.
But what about the supply side?
Here, Timothy’s background in highvolume manufacturing benefitted his contributions to the digital transformation efforts at Infinera. In particular, Timothy highlights the importance of moving towards better data insights and predictive analytics.
“Infinera and Coriant historically produced at a lower volume,” explains Timothy. “We build products by the thousands or even just hundreds. Getting to tens of thousands is outside of our norm, but that is changing now as we ramp our pluggable transceiver product portfolio.
“In my experience, we spent a lot of time looking at the supply side of things and understanding and looking at our factories and our contract manufacturing and establishing what are the yields, capacities and outputs that we’re getting on a daily, weekly or monthly basis. Gathering that data was an area that we weren’t necessarily mature in, but we’ve made significant progress in that regard.
supply chain road map and I want to make sure we continue on that journey of digital transformation at Infinera.”
Here, Infinera has benefitted from the support offered by Kinaxis, the Canadian supply chain management and sales and operation planning software company.
“Prior to working with Kinaxis, we were doing our S&OP using multiple databases and spreadsheets – it was a tedious process,” admits Anil. “Multiple people were spending days, even their weekends, just collating data, getting it all together to come up with a long-range view of demand. Once we had Kinaxis implemented, demand planning became a much more streamlined and easier process. It gives us great visibility into both demand and supply. Now we also have the ability to adapt our S&OP planning cadence. Before, if there were changes that we wanted to do midcycle, we didn't have that ability. But now with Kinaxis, if there’s a huge demand which comes in between the cycles, we can run a mid-cycle change and we get a new signal out to our suppliers.
“Now the next step would be not just gathering data but striving towards predictive analytics. This is part of my
“So the technological aspect of enabling a new tool like Kinaxis has helped us a lot. In addition to just enabling our sales and operational planning, Kinaxis helps us in getting
all this data together. Before, we had all the data, but it was all in multiple systems that were not tightly integrated. But with Kinaxis we can generate reports and leverage our data simply and easily, and that’s also been a gamechanger for us in the past couple of years.”
Anil notes that Kinaxis offers particularly valuable benefits to Infinera’s operations by enhancing data visibility across the value chain.
Operational Excellence
The digital transformation efforts at Infinera go hand in hand with promoting operational excellence across all departments at the company.
Timothy relays how the focus on operational excellence stemmed from the COVID pandemic and how it heavily impacted the global supply chain, with semiconductors being particularly hard hit.
“Once we had Kinaxis implemented, demand planning became a much more streamlined and easier process. It gives us great visibility into both demand and supply”
Anil Som, Senior Director of Operations
End-to-End Supply Chain Planning & Execution
Know sooner. Act faster. Remove waste.
Recognised as #1 by analysts for supply chain vision and proven value, only Kinaxis gives you the agility to keep your business ready for any future. We’re trusted by innovative brands around the world to accelerate their digital supply chain transformations and empower fast, con dent decision-making. We combine human and arti cial intelligence with our unique concurrent planning technique so you know sooner, act faster and can remove waste.
Recognised as #1 by analysts for supply chain vision and proven value, only Kinaxis gives you the agility to keep your business ready for any future. We’re trusted by innovative brands around the world to accelerate their digital supply chain transformations and empower fast, con dent decision-making. We combine human and arti cial intelligence with our unique concurrent planning technique so you know sooner, act faster and can remove waste.
www.kinaxis.com
But Infinera was able to ride out these challenging circumstances due to their deep and strong supplier relationships, built on a philosophy of credibility through communication.
“One of the things that drew me to Infinera as a company when I joined was their culture and philosophy on how to do supplier management,” shares Timothy.
“We value and strive to build robust supplier relationships, even up to the CEO level. We continue to foster these relationships, so during the pandemic and times of shortages where we couldn't get parts, we might have a brief CEO-to-CEO meeting, or maybe even just an e-mail or a phone conversation. We didn't waste the supplier’s time, but we did have those relationships where we could call as and when needed. We didn't double order when the situation became difficult, and the suppliers were quick to recognise that, building our credibility. In fact, we chose to have daily or weekly working calls where needed and did whatever it took with our key suppliers and
our key partners to talk about our real demand, what it looks like from a forecast perspective. And if there was difficulty in meeting that, we had that open communication about what's our drop-dead quantity and our customer’s lifeline requirements.
“We built a tremendous amount of credibility through the pandemic with our suppliers. That credibility helped us have more open conversations with them about their sub-tier supply chain,” summarises Timothy.
Moreover, Infinera’s digital transformation, much like any other major business project or enterprise strategy, relies on tangible KPIs and metrics.
“One of our key focuses within our digital revolution was to avoid
transformation just for the sake of transformation,” says Anil. “It's key to understand how we are improving our metrics along the way. For instance, we are really focused on time-to-delivery metrics. This stems from our CEO, David Heard, who has been very passionate about improving the metrics that really affect the customer. So we don't want to improve our performance metrics just for the sake of improving metrics. How are we making sure we meet the commitments that we have made to our customer? What is our performance related to our published lead times? How much order churn are we causing to our customers? We have made excellent progress here by improving the measuring sticks we analyse our performance against. As we have embarked on our planning and S&OP journey, we have
a better idea of what to measure to see whether we are improving or not in terms of our operational effectiveness.”
Adding to this, Timothy emphasises that Infinera defines these performance metrics not only based on what the company sees as operational effectiveness, but by considering how their customers expect them to be performing.
The sustained innovation and improvements to Infinera’s supply chain strategy have become even more important as the company expands its horizons from a traditionally lower-volume approach to components and products towards higher-volume manufacturing.
Here Timothy uses Infinera’s ICE-X intelligent coherent pluggables portfolio as an example.
“We provide our customers an architectural flexibility with these intelligent coherent pluggables
because they can deploy them in a wide set of applications in their networks, and with the software we put on them, they can remotely and dynamically increase, decrease or shift the capacity. They don't have to send out trucks to replace the transponder – with our real-time software, they can remotely and easily adjust where and when they want capacity. And our pluggables are so much more power efficient than other legacy solutions. This is enabled by the point-to-multipoint architecture and the elimination of aggregation sites.
“Some analyses anticipate that by 2025, 20 per cent of the world's power consumption will be in data centres. But with Infinera’s ICE-X intelligent coherent pluggables, we've taken a traditional solution at 100 Gb/s from 50 to 60 watts down to 5 or 6 watts. That’s a 90 per cent reduction. So we have been really focused on helping our customers achieve their goals in both architecture and flexibility and
“The sustained innovation and improvements to Infinera’s supply chain strategy have become even more important as the company expands its horizons from a traditionally lower-volume approach to components and products towards higher-volume manufacturing”
meeting their customers’ needs, but by doing it in a socially and environmentally responsible way.
“Infinera’s ICE-X intelligent coherent pluggables are a highvolume product. This is not our traditional low-volume offering. We'll be coming out of the gate ramping these products with the potential to scale to tens of thousands to hundreds of thousands in the next two to three years. And that is why we prioritise digital transformation because smaller mistakes when you're low volume are usually recoverable. But when you're talking high volume and you're ramping up from a few hundred to tens of thousands within a very short period, you can't afford to make those types of errors. So having accuracy and improved processes is vitally important.”
ESG
For Timothy and Anil, one of the proudest accomplishments arising from Infinera’s digital transformation is securing an AA environmental, social and governance (ESG) rating from Morgan Stanley Capital International (MSCI) in 2022.
nominate themselves for it, and it measures a company’s resilience to long-term, financially relevant ESG risks.
Infinera secured recognition for its high standards relating to how it treats staff and customers, its business practices and financial health, along with how the company champions sustainability, diversity and a host of other ESG factors.
But it isn’t just a case of what Infinera does internally – the MSCI ESG rating came in so high because the company raises awareness and promotes ESG issues with their suppliers as well.
Timothy emphasises Infinera’s excellent work towards sustainability and diversity goals in particular.
The MSCI ESG rating is externally awarded, so companies cannot
“Retaining talent during the pandemic was very difficult for a lot of companies,” says Timothy. “We had minimal turnover and we did a great job nurturing and continuing to build supply chain resilience. One of the things that we do is we're working with some historically Black colleges to help pipeline new talent. We also have networks in Infinera for female employees, Black employees and we built a green team that
focuses on the environment. We have eight Infinera sites across the globe that are carbon-free, using clean energy. So there's a lot of different programmes and processes helping us to maintain progress with our ESG agenda, and we have several teams that have been put in place to really focus on these organisational goals.”
Infinera sends products worldwide, so another core component of its ESG strategy is moving towards a unified global distribution centre to enhance its social and environmental credentials as a company.
Anil harkens back to the days when Infinera acquired Coriant, when there was an extensive network of warehouses that were ripe for optimisation.
“A lot of our suppliers are in Asia, so it made sense to have a global warehouse better placed from a network perspective,” explains Anil. “Our planning and logistics teams did a phenomenal job with the transformation over the course of the last two years, and we are almost
done with the transition to a global warehouse. We are starting to reap the benefits of having a consolidated warehouse in Asia. Previously we had to move products from planes, but now because of where our suppliers and our contract manufacturers are located, in a lot of cases we can transport goods via road, which is helping out both in terms of cost reductions and in terms of reducing our carbon footprint.”
“It has given us a lot more consistency with scheduling with our customers,” adds Timothy.
“Our biggest fear was that if we do this, are we going to impact our ability to service our customers? But it has actually had the opposite effect and it's given us a lot of consistency in the way we schedule with our customers and meet their needs. A lot of people have been looking more closely at regional supply chains, but the global distribution centre in Asia has been transformative for Infinera.”
To learn more about Infinera, visit their website at infinera.com.
Anil is excited about the emerging discussions around AI, ChatGPT and blockchain technology.