Creating Supply Chain Resilience by Building a Digital Ecosystem

A conversation with Dave Evans, Co-Founder and Chief Executive Officer (CEO) of Fictiv

Supply chain resilience became a C-level issue during the pandemic. That was fortuitous for Dave Evans, an engineer who founded Fictiv in 2013 after becoming frustrated by the long hours he spent sourcing and managing vendors while leading new product development at Ford. His answer was to create a Digital Manufacturing Ecosystem that can deliver parts 5X faster than traditional sourcing options and shift production from one location to another on a dime. Dave recently spoke on the AWS Industrial Insights podcast about how that agility benefited Fictiv’s customers amid the factory shutdowns and product shortages during the COVID-19 pandemic.

Listen to the inteview on the AWS Industrial Insights podcast

During the pandemic, supply chain agility went from a functional issue to a C-level issue. Suddenly, your CEO, CFO, and board members were asking, “Why is revenue not hitting?” So supply chain leaders are waking up and saying they need better traceability, transparency, and agility in their ecosystems.”

Playing chess with the virus

What were some of the challenges you faced during the pandemic, and how did you approach them?

Dave Evans: At Fictiv, we write software that connects customer orders with idle manufacturing capacity globally. So imagine you have a machine in a factory in China or Texas that’s not running. How do we allow an engineer working at Honeywell in Phoenix to order parts from that idle machine? During the pandemic, when our Asia-Pacific (APAC) team got hit by the virus, we had to move 30% of our production out of China and route it to the US, India, and Taiwan. But because of our digital ecosystem, this process was very efficient and we only lost three production days. Then the reverse happened where APAC came back on, and the U.S. got hit. So, we moved that production back to APAC with just one day of downtime. Then the virus hit India, where we have a sizable production team. So we moved production out of India and sourced it to other areas of APAC.

People over product

From a leadership perspective, what mindset did you need to achieve this kind of impact?

Dave Evans: Many of my peers who are also founders talk about product, product, product. What am I building? How do I make a better product for our customers? My mantra is people, people, people. Your people build the product, and that product is what serves the customer. So, our business foundation has always been, how do we empower people to do their best work whether they’re here for one year or 10?

I’ve seen it time and again that when people understand what they are trying to change, they have better outcomes than the folks who are saying, ‘We have to do industry 4.0!’”

Metrics are better than trends

What are some ways you’ve enabled people to do their best work?

Dave Evans: When we were building the company, we asked, “What are we trying to change here?” And we settled on two simple metrics: We wanted to do things at 100 times the speed and a tenth of the cost. Those are simple operating metrics, but they have huge implications for how you serve your customers, where you invest in technology, and how you build your partner network.

How so?

Dave Evans: Let’s say we want to bring a new country online or invest in a particular technology. The first question my team asks is, “Are we going to be able to do things 100 times faster than with the traditional solution?” or “Does it enable us to do this at a tenth of the cost?” I’ve seen it time and again that when people understand what they are trying to change, they have better outcomes than the folks who say, “We have to do industry 4.0!” At the end of the day, we are responsible for delivering parts that go on airplanes, medical devices, and autonomous vehicles. We have a high degree of responsibility, and having clear metrics helps us deliver on that.

Our business foundation has always been, how do we empower people to do their best work whether they’re here for one year or 10?”

A platform for creating superpowers

When faced with adversity, how have you been able to achieve your operating metrics?

Dave Evans: We rely on technology to drive our efficiency. But you don’t just snap your fingers, and the technology does all the work. You need people to build those standard operating procedures (SOPs) and develop the technology, which is what streamlines the workflow. The way I describe it to chief procurement and operating officers is, think about the team you’ve built of strategic sourcing managers, quality engineers, and procurement specialists. I have those people at Fictiv, but the difference is they have superpowers. If your people can only manage five suppliers because they’re doing it with email and PowerPoint, ours can handle 500. And the reason they can do that is our technology. AWS has been a fabulous partner for us in this. This blend of software and digital meeting manufacturing operations is just ripe for disruption.

What do you focus on to ensure you’re delivering for customers?

Dave Evans: We don’t own a single manufacturing plant. We have a highly vetted and managed network of manufacturing partners that we think of as our Ecosystem. That Ecosystem is made up of three components. This first is our platform—all the technology we write, all the nodes that we’re connecting – that runs on AWS and the data. The second is our partners that integrate with our technology, and when they have available capacity, they do the actual execution of building that metal or plastic part. The third, which I consider the most important, is our people. The Ecosystem is run by people like those monitoring the design for manufacturing and inspecting the quality of our partners’ work. But they have superpowers; they have the high leverage of our partners and digital platform.

We had a quality center in the U.S. where a team would check all the products before they went to our customers. We had written SOPs for how we do that. Our engineering team took that set of processes and digitized it—the entire quality process. They took photos, measurements, data and created a system that allowed us to do it all digitally in a dashboard, like an air traffic control tower. We thought we’d go back to having that distribution center after the pandemic let up. But we saw better on-time delivery and fewer product defects with that technology implementation than when we were physically looking at them.

Becoming a change agent

Speaking of changes made during the pandemic that you intend to keep, what do leaders need to do to be prepared for the next crisis?

Dave Evans: During the pandemic, supply chain agility went from a functional issue to a C-level issue. Suddenly, the CEO, CFO, and board members were asking, “Why is revenue not hitting?” Supply chain leaders are waking up and saying they need better traceability, transparency, and agility in their ecosystems.

We’re seeing a lot of innovation in a brief amount of time that makes me super-excited and encouraged. There’s never been a better time to say, “We need to focus on digital and driving true resiliency into our supply chain.” I came from Ford, where you’re always a small cog in a big wheel, no matter what your title is. So I think that no matter who’s listening, you can be a change agent. That’s the most important thing—to be a champion for change.

My employees know that if they want to pursue a new project, they need to explain how the investment will increase speed or cost savings.”

How does one become a champion for change amid competing priorities?

Dave Evans: There are some great white papers that focus on the economic value model, as in what is the dollar impact on your organization of adopting digital and implementing resiliency. We walk customers through that. We ask what types of delays are you seeing in your production line? How big is your team? If you shifted to digital, how much quicker could you realize revenues? What would your product yield increase to? We can help build that argument. Another thing to focus on is metrics. What are the metrics your organization cares about that you believe you can affect? My employees know that if they want to pursue a new project, they need to explain how the investment will increase the speed or save costs. These become clear parameters for any individual to drive organizational change, from the HR person onboarding employees to the chief architect.