Interview with Craig Martin, Vice President, Supply Chain Operations, Juniper Networks

Craig Martin's supply chain management experience spans over 27 years. He is currently the Vice President of Supply Chain Operations at Juniper Networks. Prior to his current position, Craig served as Vice President of Operations and Customer Service at Good Technology. He was Vice President of Materials and Semiconductor Technologies at 3Com Corporation for over five years. Prior to his experience at 3Com, Craig was the Co-Founder and Vice President of Manufacturing and Customer Service at NeTpower. Craig started his supply chain career at Hewlett-Packard, where he worked for over 12 years in a variety of positions. Craig started HP's Personal Computer Distribution Operations in Roseville, CA.

Craig Martin holds a Bachelor's Degree in Business Transportation Management from the University of Colorado at Boulder.

How important is supply chain management to Juniper Networks' overall business strategy?

Supply chain management is integral to Juniper's performance in many dimensions. Our customers expect world class quality delivered at an exceptional value with predictably short lead times. Delivering on these dimensions gives us a competitive advantage which helps fuel our aggressive growth. From a shareholder's perspective, the degree of efficiency we establish in delivering on these criteria will favorably impact overall revenues, product margins and our balance sheet.

What primary areas of focus (or key initiatives) should Juniper Networks be looking at for Supply Chain Management?

We are focusing on two dimensions of our supply chain in parallel - scaling to support our projected growth (including a number of new go-to-market initiatives) and doing it in a way that provides the maximum flexibility and resiliency to ever-changing market conditions. We have a very aggressive lead time reduction program, for instance at the component level which allows us to respond quickly to upside within our quarter and maintain short lead times to our customers.

How has outsourcing enabled Juniper Networks to be successful with these initiatives?

We have established an excellent set of relationships with our contract manufacturing partners. Collectively, they address our breadth of product manufacturing and fulfillment requirements across a global footprint with manufacturing sites and fulfillment locations strategically located based on supply chain modeling simulations we maintain. Effectively, we utilize three supply chain simulation tools factoring customer demographics, product physical characteristics and service level requirements into a range of scenarios to come up with the optimal model to meet targeted service levels with the lowest landed cost in the most environmentally conscious manner.

How is Juniper Networks addressing the market's increasing focus on 'green' supply chains and reducing a company's carbon footprint?

Juniper Networks is very active in this area, and has partnered with the Carbon Disclosure Project's Supply Chain Leadership collaboration since 2008. The Project extends awareness of an organization's carbon footprint, moving beyond the measurement of direct greenhouse gas emissions to include climate change risks and opportunities across the supply chain. As part of this initiative, we provide a global process for supply chain greenhouse gas emissions disclosure. Juniper has also voluntarily adopted the principles of the EICC industry consortium and the EICC Code of Conduct and abides by its principles which place heavy emphasis on green initiatives. We have assessed compliance with the EICC Code by our top 100 suppliers (based on total spend) and work closely with each of our CM sites to ensure compliance, and that proactive efforts are in place to be as environmentally conscious as possible in our daily operations. We also have relationships with industry thought leaders doing work in this area, such as Professor Hau Lee from Stanford University.

In addition to our supply chain modeling efforts, we can now calculate and monitor our carbon emissions through available industry tools. This visibility helps us reduce them further, and allows us to simulate emissions under different scenarios when making supply chain decisions in the future. Juniper Networks' goal is to credibly account for our emissions and work to significantly reduce the carbon footprint of our own operations, business travel, commute and supply chain. Though it's an exceedingly complex and multi-year process, we're measuring the energy efficiency of each of our products, as well as the carbon emissions inherent in their production and delivery to the customer.

What is the key Supply Chain Management priority for Juniper Networks in the coming two to three years?

In our case, we are participating in a market that is projected to continue experiencing strong growth over the next few years. To capitalize on this opportunity, we are embarking on a number of new initiatives, extending our footprint into new markets, engaging with new partners, creating an ecosystem around the JunOS architecture and pursuing fast growing emerging markets. All these will create new requirements on the supply chain, so our challenge is to address these capabilities within the structure of our network, adapting as needed.

What is the key Supply Chain Management priority for Juniper Networks in the coming five to ten years?

Aside from supporting new market initiatives, staying abreast of the dynamic world we live in is required to staying nimble and responsive. Seeking to optimize volume efficiencies while supporting unique country requirements is one challenge for example, particularly in emerging markets where the formulas and criteria aren't well established. Like driving a car, we're always adjusting the steering wheel to adapt to new challenges, whether they are requirements for local presence, shifting labor costs and global economics, supply and demand variations, oil prices or competitive factors. Each of these have been major factors in the past two years, and all will continue if not accelerate in the future.

What are the biggest INTERNAL challenges for manufacturers to achieve supply chain excellence?

Probably the biggest internal challenge is the classical challenge of getting accurate forecast visibility, while at the same time buffering ourselves from the impact of poor accuracy. In addition, we are putting emphasis on Design for Manufacturability, complexity reduction and sourcing for new products to develop the simplest, lowest cost and most resilient supply chain possible. An additional challenge for Juniper is getting a scalable systems infrastructure in place that can stay ahead of our growth.

What are the biggest EXTERNAL challenges in achieving supply chain excellence?

The biggest external challenges are those related to the global nature of our business and the ever changing dynamics of regional market performance, managing supply risks associated with regional and political factors.

Who is responsible for planning your company's business continuity when facing natural disasters, major disruptions or other geopolitical issues?

Supply Chain Operations is responsible for developing our manufacturing network design that incorporates risk management as a key ingredient. As such, we have designed our system working with top tier CM partners with sites located in multiple geographies so we're not too reliant or exposed to any one market. We also have the ability to build any of our products in multiple sites should there be a local situation that impacts supply continuity. All this is done in concert with our Environmental Health and Safety organization who is our primary interface into the EICC, and with our Tax and Treasury Department to make sure we're satisfying our insurance carriers' need for disaster recovery procedures, redundancies and records retention processes as appropriate.

How do you grade Juniper Networks' supply chain overall performance in client satisfaction?

That's a measure that's probably best answered by our customers. In the past year, we've received a prestigious award as Supplier of the Year from a major US service provider, been recognized by a large European service provider/reseller as their benchmark in supply chain performance among their suppliers and passed several customer audits. The past 18 months have been the most challenging in my career, with customer audits focusing on how we were insuring our supply chain partners would survive the downturn at the beginning of 2009, to wanting to insure we could support the faster than expected recovery in the second half. In all cases we satisfactorily met their expectations. Of course, from an operating perspective we can always do things more efficiently, and the bulk of our initiatives are driven around scaling our systems and processes to continuously improve in this area.

During this economic downturn, how do you keep your entire organization motivated?

While we certainly weren't immune from the economic downturn, Juniper actually increased our investment in new product development last year, so there was a huge amount of very exciting activity going on to support those efforts. During the course of the year we introduced a flurry of new products in our key market areas of routing, switching and security. All the hard work our people put into them resulted in market share gains in many areas which created a lot of satisfaction. And, even though the economy was down, it was an extremely busy period managing all the associated dynamics in our supply chain. Personally, it represented a situation unprecedented in my career, and I found it incredibly challenging and stimulating to chart the best course for our business.

How important are the Contract Manufacturers (CMs) for Juniper Networks' overall strategy?

Juniper outsources 100% of our manufacturing through top tier contract manufacturers whose performance is essential to our success.

What are the key factors to ensure a successful CM relationship?

A relationship so fundamental to our success has to be based on trust and mutual respect. This builds a foundation for active and open dialog on ways to continually improve how we jointly compete in the market. Hand in hand with trust is fairness. Both Juniper and our partners are in business to make money, and they would describe us as aggressive, but fair. We need them to succeed so they can grow with us, and we need their "A" team to bring the best out in our products and services.

As one example, I just returned from a four day strategic planning meeting with my team that manages our Asia operations through our four CM partners. We reviewed a number of “Thinking Team” projects in which each of our team members identified a challenge they wanted to address, created a team of Juniper and CM employees and drove efforts to improve. The unique thing about this meeting is that we invited the four CM site managers that support Juniper’s business, and openly shared the results of each project to all of them in one large forum. In fact, the four competing CM site managers were asked to hold their own break out session to address questions regarding how we are positioned in the market, and areas we can improve on. Each of them added great value to the meeting, and were very appreciative of the trust we placed in them to participate - a first for all four of them to work directly with their competitors at this level. And the best part is I think they actually liked each other!

How do you prepare for the upturn now that the economy is showing improvements?

We are in the middle of a tight supply market, which is when it becomes clear where your real partnerships are. Having strategic relationships with key suppliers is the foundation for our ability to deliver great products, so we treat them with a high degree of respect. As such, our suppliers know there is a reward for them to support our needs in a tight market, which is to continue winning new business with us.

When do the fuel cost / dollar exchange and / or geopolitical factors make insourcing a viable option?

I don't see insourcing as a viable option regardless of the external factors mentioned due to the heavy capital and labor investment that would be needed to create the capability internally. By having top tier partners with a broad global footprint, I am confident we have enough moves on the chess board to adapt to changes in oil prices, exchange rates or political/geographic factors with our current model.

What are your thoughts regarding globalization?

I think it's going to happen! Seriously, it's a part of daily life in my job, and is one of the most exciting aspects I manage. Every day there are new economic, political and geographic considerations that come into play. Staying abreast of everything going on in the world that can affect our supply chain is a very stimulating challenge - from oil prices to volcanoes to labor management challenges to environmental and human rights considerations, all factor into our tactical and strategic management of the business.

What attracted you to supply chain management?

I would hope the picture I've painted in this interview answers your question. What an incredible perspective you get on the world we live in by managing an operation so tied to all that's going on. When you combine that with the fact you get to work with so many bright and talented people within a great company making a major impact in our industry like Juniper, it's pretty hard to beat! And I really, really enjoy the personal relationships with our partners and suppliers. It's extremely satisfying to find that formula that works for both of you, manifested in demonstrated market success.

What are the main skills and personal attributes that have helped you reach your current position?

I'd say I have a creative streak that makes managing the status quo very unfulfilling. The dynamic nature of our business demands continuously looking for better ways to do business, so I get that creative fix on a daily basis. I have been successful in developing strong teamwork within my team and with our partners that fosters innovation and creative thinking. The overriding set of values based on integrity, mutual respect and trust is paramount.

When you think about our supply chain network, we have over 30,000 parts, 1,000 suppliers and 2,500 people between our Juniper team and our CM partners spread across the globe. Our engineers entrust Operations to manufacture the great products they develop, and we in turn rely on our partners to execute against a demanding set of customer expectations. All this has to come together for us to successfully deliver to support our customers. There's no way to succeed without having total trust in the people who make it happen, supported by a robust process and systems environment.

What would you say is the most rewarding experience you've had in your career?

I've been fortunate to have a number of very rewarding experiences in my career, so it's hard to identify one. However, they all have a consistent theme - gathering a bunch of bright people to attack a problem that didn't seem achievable, mobilizing and enabling them through a lot of brainstorming and program management structure, identifying success criteria and providing all the necessary resources needed to succeed. It's very energizing to know that you are expected to take risk in order to solve the challenge, and incredibly satisfying when it all comes together.

Who do you rely on for advice?

The Juniper management team is incredibly talented and supportive, and I rely on them daily. Our CM partners and logistics providers are also a wealth of knowledge about manufacturing technologies, and I'm in constant dialog with them. I've also developed a great network of former colleagues and friends that between them have probably faced similar challenges, so I'll seek them out on occasion.

How do you balance your work life with your personal life?

As much as possible, I try to separate work time from family time, and to make those times really count. I try to sneak in a little golf and exercise, and we enjoy traveling and experiencing other cultures. My wife and I are doing a lot of vicarious living these days through our two children as they prepare for college and high school, starting to look at colleges, supporting their interests and making sure they're getting the most out of their summer experiences.

Turbulent times can be the best time to implement changes. However, companies tend to paralyze due to uncertainty in the market or their human capital. What is your advice to maximize the opportunities to implement changes during tough times?

Turbulent times demand swift and often bold actions. I can't think of a better situation to tap into the skills and resources of your people in navigating through uncertain waters. I firmly believe talented people rise to the challenge, and it can be very stimulating and motivating to be part of developing the strategy and driving execution during these times. Done correctly, this is a great chance for a manager to provide his employees opportunities to deliver their best contributions.

March 2011

See the recipients of the 2009 Top 25 Supply Chain Executives Award.