KATEK Group CTRO Petra Becker provides some eye-opening insights that promise to make EMS more efficient, reliable and competitive. Join us as we talk through the supply chain management and digital transformation, exploring how KATEK Group has created unprecedented transparency from suppliers to customers with strategic adoptions of digital tools.
Petra delves into how KATEK Group's digital transformation has resulted in significant inventory reduction and efficiency increase, lending them a unique competitive edge and the ability to "lead the category". The digitization has also led to transparency of demand changes, allowing for a swift and effective response to supply and operation sides. Learn more about the merits of data-driven partnerships with suppliers and their positive feedback.
Like every episode of EMS@C-Level, this one was sponsored by global inspection leader Koh Young (https://www.kohyoung.com) and Adaptable Automation Specialist Launchpad.build (https://launchpad.build).
You can see video versions of all of the EMS@C-Level pods on our YouTube playlist.
Speaker 1:
Hello, I'm Philip Stoughton. I'm here at Productronica 2023 and I am on the booth of Ko Young talking to Petra from Cat-Tec. Good to talk to you Always, always interesting to hear what's going on in the world of digital transformation. Key areas this year have been all about the supply chain and all about dealing with this bullwhip effect, seeing how it's impacting us in the EMS industry, but also your customers. How can digital transformation help give some visibility into the supply chain and improve what's happening?
Speaker 2:
Thanks, philip. It's a great question to Cat-Tec and we did a lot of things the last year, so we brought our whole supply chain from customer until the supplier and all everything which is in operation on a new level and we have the whole transparency. And we did that with, let's say, first steps in digitalization. We have everything in a cloud-based tool. We have a planning tool which is, I would say, very famous for us and helps us a lot so that we can really track the supply chain, the availability from our suppliers through our operation to give really a best-in-class customer commitment, and this is very important to us. I believe that the EMS or, like Cat-Tec, to make a difference to our competitors, we must be reliable for our customers and we need a very good operation.
Speaker 1:
Yeah, I think operations are absolutely essential and I mentioned to you earlier that I was calling 2024 the year of the year of efficiency and I think in supply chain that's fundamentally important because we have had inefficiencies where people have overordered. Is this venture going to give more transparency to your customers as well, so that will they be able to look all the way through Cat-Tec, down the supply chain and see which parts are going to challenge them going forward?
Speaker 2:
Yeah, that's what. This was our target the last year and I would say on all the entities where we have implemented it is, we can give the outmost transparency, also on the operation. We know the cycle times and we know the availability on the supplier side and this happened a lot. And if we talk about, let's say, strengths in 24, I would say Cat-Tec is already in good shape. So we have done training because we reduced our inventory year over year around about 30 million, which is close to 50%, and it looks like that we become with our days inventory outstanding below 110 days, which is, for us, leading the category, and we have not so many customer with high volume. We are more, let's say, diverse. We have a huge portfolio from our customers with also small and exotic variants, high variants, and so I would say we're doing here very, very good and this was as the first step. So next year, becoming higher efficiency also in our operation will help us again and we make the second step so we become even stronger.
Speaker 1:
Yeah, absolutely, and that inventory has been stuck in the in the supply chain for some time. It's kind of a glut of inventory that's worked its way through you, some of its finding its way to customers as well, and that's that's slowing down their, their pull demand as well. Is that something that's visible in your, in your digitally transformed supply chain tools?
Speaker 2:
Yes, totally so. We have the whole transparency about the demand changes with a very, very good tracking on the customer side, because this demand changes we can only allow if we can confirm it from the supply and operation side. So and then we can go the change with the customer. It makes no change, makes no sense going all these ups and downs from the customer. Before we take that, we always like to evaluate and then having a look on it and then give a commitment and then we take the changes into our system. Yeah, so yeah.
Speaker 1:
Okay, and digital transformation doesn't happen in isolation. You have to have buy-in from your customers, obviously, but almost more importantly, further down the supply chain. Are your suppliers keen to improve this data driven partnership?
Speaker 2:
Yeah, I think for our suppliers, the more we come stable, it helps them as well, and this is our target to keep our business stable. So take the agility, the volatility out, also the noise and this. I would say this is still our target and there we still work on it. So I got good feedback from the supplier as well from our customers the last time.
Speaker 1:
And when you're doing this, are you developing tools in-house or are you finding tools on the market and adapting them?
Speaker 2:
We go both ways. First of all. So we have, let's say, the first step was we did everything in a cloud-based solution. Then we have, let's say, all the transparencies, all our KPIs, in a homemade Power BI screen where everybody can have a look on it, from top to every colleagues in our every employee. Either he's a demand manager, or he's a supplier manager, or he works in operation, so all have the same look on it. Also, reiner, our ZO, have the same look on it and it depends on them how deep they like to scroll. And, on the other hand, if we talk about, let's say, digital tooling, so that things where we can, let's say, take out the manual process we have by today in place and we can adapt it with software solutions, there is something. We look on the market, we find something and this is something we implement.
Speaker 1:
And your knowledge is hugely valuable for them. So a lot of that software that's out there isn't necessarily ideal. That has to have quite a degree of customization. You get involved with those software suppliers. Are you happy with the software ecosystem that's out there for you?
Speaker 2:
Never be happy with your software suppliers. That would make, let's say, that that would not be a good approach. But we are, let's say, 80 percent, we are happy, and then its cardiac is leading the category and out of this we have a different product portfolio than other big companies or like automotive players so, or under other industrial players. So there we have to adapt it to our needs and there we have to do a close cooperation with our software suppliers. But we are doing good and normally we like to have partners, strong partnerships, and then we have a good way to work on that.
Speaker 1:
Yeah, absolutely. Thank you so much for your time. Pleasure to talk to you. It's, it looks. It looks like a project that's going to reap a lot of value in terms of reducing inventory but also creating that visibility and extra value for your customers. Thank you very much.