EMS@C-LEVEL
As Forbes, Entrepreneur, Fast Company and SCOOP writer, Philip Stoten, continues to talk to EMS (Electronic Manufacturing Services) executives he learns more about their individual and collective experiences and their expectations for their own businesses and for the entire electronic manufacturing industry.
EMS@C-LEVEL
Electronica 24: Jeroen Tuik on Connect Group's Evolution, Brand Consolidation and Expansion
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What strategic moves transform a company from 1980s cable manufacturing roots into a global EMS powerhouse? Join me in our electronica studio, hosted by IPC, for an insightful conversation with Jeroen Tuik, CEO of Connect Group, who shares the company's journey through strategic mergers and their recent rebranding efforts.
Discover how Connect Group is setting its sights on global expansion across key regions like Mexico, Asia, and Europe. Jeroen delves into the importance of an agile and transparent supply chain, illustrating how data-driven decision-making and cloud integration are enhancing operational reliability, especially in light of the challenges resulting from the COVID-19 pandemic.
We discuss Connect Group's proactive approach to industry hurdles and the strategic establishment of a plant in Mexico to preempt potential geopolitical disruptions. Jeroen reflects on how the pandemic was a pivotal moment for reassessing corporate agility and readiness. The discussion highlights the value of flexibility and transparency in maintaining seamless operations, ensuring that Connect Group remains a dependable partner for OEMs worldwide.
EMS@C-Level at electronica 2024 was hosted by IPC (https://www.ipc.org/)
EMS@C-Level is hosted by global inspection leaders Koh Young (https://www.kohyoung.com) and Global Electronics Association (https://www.electronics.org)
You can see video versions of all of the EMS@C-Level pods on our YouTube playlist.
Hello, I'm Philip Stoughton. I'm at Electronica 2024. I'm on the IPC booth and I'm with Jerome Took from Connect Group. Yes, jerome, I think a lot of people in the industry are familiar with Connect as a brand and also familiar with I-Core. You've now rebranded into one big company with a new strap line. Just give me a little bit of history of Connect Group prior to the acquisition of iCore and the strategy behind this kind of rebrand as a single entity.
Speaker 2Okay, no problem, thanks for having me here. So Connect Group started back in the 80s. So we actually started with making cables, manufacturing cables. Eventually, it turned out we also were making actually the printed circuit boards, and now we are at the level that we're actually combining them but also building very big cabinets. So it's 1980, we first expanded to the Netherlands, then gradually to Czech Republic. We started up a kind of a brownfield in Romania with six people, but we now have 1500 people, so it's a lot.
Speaker 2And actually in the whole geographical situation, we said six, seven years ago we need to go more global, because we also suspected that there would be regions around the world and split it up, and we managed to acquire IKork in 2021. And so now this year we're actually rebranding to one group and I think we're ready for that. So, we have a lot of our colleagues over here, yeah, so it's very good.
Speaker 1Yeah, it's an exciting time and I think the rebrand is really, really interesting and I think now, when I look at it from an OEM point of view, they're looking for a single entity that can pretty much resolve all their business. They're looking for some level of vertical integration, but they're also looking for a really agile footprint. Yeah, you have, you have the Mexico facility, you have Asia. You obviously have a very strong footprint here in Europe as well. But the flexibility to respond to geopolitical changes we've seen plenty. We suspect there are more coming how important is that to the brands that you work with?
Speaker 2Oh, it's very important. So what we are trying to do is that basically we have actually four regions. So we have three regions which are hard regions, and fourth region is what we call our competence center. So it's the design and development, prototyping, test development, but the regions as such it's for some parts, supply chain wise. They're sourcing with some but linked together and some but not China separate. So we want to be very agile in that area as well. And what we see from the manufacturing.
Speaker 2Five years ago the OEM said they had regions, but basically they were controlled mostly out of Germany, but now you see more and more really decision-making done locally. So we have adapted our structure already in January this year, where the profit and loss and the decision-taking is done within the region, because agility is good, but also the decision-taking should be done rather than to act quickly, and our aim is to keep our corporate as small as possible. Of course you need to have some and it's all down to the regions. So next step is, as we discussed our strategy last year last week, also to align. We see a lot of investment needs in the infrastructure, the IT, although we are on a quite good level, but going from on-site more to cloud, making use of all new developments like AI.
Speaker 2First start with data gathering, and that's what we've been doing the last one and a half year, just to be sure that we're setting up the systems correctly. And as a confirmation, last week there were actually three words but two. One is agility and the other one is transparency. Correctly, and as a confirmation last week, we're actually three words but two.
Speaker 2Yeah, one it's agility and the other one is transparency yeah yeah, because we are an important part of the supply chain yeah absolutely, and that one thing is transparency yeah, and I think it's really valuable.
Speaker 1We were talking earlier and I was saying that I really like the. We talked a lot a few years ago about this glass factory concept where you could see in the factory, see where everything was happening. But now it feels like we need this glass pipeline. We need to see what's happening all through the supply chain, because actually where we've struggled in the last few years, post pandemic, is supply chain. It's not with our ability to make quality product. We can do that. So actually taking data and synthesizing and using it for the supply chain is valuable, and what you're doing with having a small number of processes within corporate, but that being one of them is hugely valuable because it does give you that global visibility. You can see what's going on in all of your regions and all of your businesses Can't say all, but we want to be predictable.
Speaker 2Yeah, you want to. What we're actually aiming for is that all the data we have is from the past.
Speaker 1Yeah.
Speaker 2So, and we are combining the data with the knowledge we have to make some predictable models. Yeah, and then there you can take decisions on.
Speaker 1Yeah.
Speaker 2So it's I think it's really valuable. What actually strikes me is that after COVID we were in that trajectory, but after COVID it really got accelerated.
Speaker 1Yeah, yeah, yeah, and it became more and more important the word transparency hugely important, I think now an OEM really wants to see what's going on beyond you in the supply chain so they can feel comfortable about that, and it's more about that than keeping an eye on you and making sure you're not making too much profit. That really isn't their motivation. Their motivation is making sure there aren't interruptions to their delivery. That's a big part.
Speaker 2We learned extreme from the COVID times because during COVID the biggest thing is that we didn't get any confirmations out of the supply chain and we are in high, mix, medium volume and it was killing because the pressure was at locations in the organization which normally just like to work and now they were, you know, the planning and the purchasing. They could not even predict and plan our manufacturing. And then we are using SAP and we were just asking a simple question Can we, from our purchase order to the sales order, just get the visibility in the whole supply chain and the? So we actually went in our data and said okay, nice, we have to do it.
Speaker 2So in COVID times, we were able actually to, in all full transparency, say this is your sales order and it's linked to this purchase. Yeah yeah, trying to get out of all the micromanagement discussions.
Speaker 1Yeah, no, absolutely it makes sense. I did visit your new facility in Guadalajara recently when I was down there for the SMTA event. Lots of investment going in there, very impressive new plant, great team down there, but my understanding is that plant's going really well. It's very busy.
Speaker 2Signs of good contracts. It's one of the few places where, if you want to talk about a positive message in Europe, it's kind of realistic negative. But every time in Mexico we're very blessed with the team there. They actually had last year this year actually, a full contract value order intake of 240 million euro plus Wow, so for the next four years, and we have a growth plan. We're also going to open something in the US next year. Yeah, so they have some challenges. Yeah, but it's we invest of 15 16 million, something like that.
Adapting to Industry Challenges
Speaker 1Yeah, yeah, yeah, no, it's exciting. And lastly, you know we've that. Yeah, I know it's exciting. And lastly, we've just gone through an election in the US. It looks like we're going to be continuing with trade wars, tariffs, restrictions, a more competitive geopolitical landscape. You have to be ready for that. You have to think about that in terms of not just your footprint, but how you communicate and how you create that other word that you mentioned, which was important to you agility for your customers. Is that something that you were expecting and you would have done, regardless of who was incumbent, or is that?
Speaker 1something that is kind of accelerating now.
Speaker 2Well, we first wanted to have the Mexican plant up and running, accelerating now. Well, we first wanted to have the Mexican plant up and running and, I think, q2 this year. We just said, regardless of what comes out, we need to have something. We also took some other decisions. So I also said I don't want to have a Chinese customer now in Mexico because I'm not sure if there is a blacklist coming up. So we're just kind of thinking what could happen.
Speaker 1Of course, over something else that, yeah, that's the uh, that's the guarantee in the ms industry. Whatever 10 things you prepare for, it's the 11th thing that's going to hit and you've got to be equally ready for that.
Speaker 2But you know, I'm I'm fairly thankful for kofit because I think it all put us the mirror in front of us saying are you really agile? Yeah, yeah, and are you ready, are you ready? And it's fun.
Speaker 1Yeah, it's exciting, is it? Congratulations on the rebrand. It looks really good. I'm looking forward to seeing it live in the factory next time I'm at one of your plants. But in the meantime, thanks for stopping by. Thanks for having me.