Flextronics System to Adjust Manufacturing to Global Disruptions

Flextronics International Ltd. has created a system that combines information from social media, emergency warning systems and its own data on product movement to help the electronics contract manufacturer quickly adjust its work flow to global disruptions.

“We’re dealing with shorter product life cycles, more innovation from more competitors around the world and rising consumption in more emerging markets,” Flextronics Chief Executive Officer Mike McNamara said Tuesday. “If we can’t get at real-time information, it’s going to be difficult to run these increasingly complex supply chains.”

Flextronics, like other electronics manufacturers, has been seeking to diversify from building computers and phones into wearables and consumer businesses. Being able to respond quickly to supply-chain disruptions may give the company and its customers an edge.

Flex Pulse, as the project is known, could let the Singapore-based manufacturer buy disk drives at the first signs that a flood could damage drive factories in Thailand, before prices rise, McNamara said. Flextronics also could, for example, shift final assembly of products to Mexico from China to avoid the effects of a strike at the Port of Long Beach, California.

McNamara talked Tuesday about the possibility of integrating weather data from the U.S. Commerce Department when he showed the system to Commerce Secretary Penny Pritzker at the company’s campus in Milpitas, California.

Second Place

While the company is a distant No. 2 behind Taiwan-based Hon Hai Precision Industry Co., Flextronics’ customer base is broader. Hon Hai generated 50 percent of its $139 billion in sales for its latest fiscal year from Apple Inc. and about 15 percent total from Dell Inc. and Hewlett-Packard Co., according to data compiled by Bloomberg. Flextronics’ largest customer was Lenovo, which provided 11 percent of its $26 billion in revenue. Apple and Ford Motor Co. are among its biggest customers.

“We’re out of the computer age, and we’re into the age of connected intelligence,” McNamara said while demonstrating the system.

Flextronics’ stock rose 44 percent last year, after the company walked away from low-profit contracts with BlackBerry Ltd. and Hewlett-Packard Co. and invested in the automotive and medical-device markets, said Osten Bernardez, an analyst at Cross Research.

“They’ve done a very good job of positioning themselves in different, higher-growth markets,” such as making entertainment and lighting systems that car companies used to build themselves, he said.

The company’ shares rose less than 1 percent to close Tuesday at $11.19 in New York, leaving the stock slightly higher this year.

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