Interview with Vivek Kamath, Vice President - Supply Chain Operations, Raytheon Company

Vivek Kamath's supply chain management experience spans over 15 years, with focus in Sourcing, Procurement, Logistics, and Supplier Performance Management. He is currently the Vice President of Supply Chain Operations at Raytheon Company. Prior to his current position, Vivek served as Director, Supply Chain / Supplier Management at Remec. He was Manager, Supply Chain at Ford Motor Company for over ten years, where he started his career in supply chain.

Vivek Kamath holds an MBA in Finance from the University of Detroit Mercy.

How important is supply chain management to Raytheon's overall business strategy?

Raytheon Supply Chain is playing an ever increasing role within Raytheon's business strategy execution. Since Supply Chain touches every aspect of the value chain; from program capture to final execution; driving a robust and competitive Supply Chain strategy provides Raytheon with a distinct competitive advantage. This is especially true in supporting Raytheon's international growth strategy.

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

There are several focus areas that Raytheon is driving in parallel including increasing enterprise-wide leveraged spend on direct & indirect commodities as well as expanding shared services. In the Solutions & Tool development arena we are focused on tools like Business Intelligence, supplier portal accessed communications and process automation. In the People arena we continue our strategy of career development enablement. Considerable resources are assigned to deliver these initiatives.

How has outsourcing enabled Raytheon to be successful with these initiatives?

Speaking for Supply Chain, outsourcing non-core activities enables Raytheon to focus resources on driving the various strategies. We've partnered or led major outsourcing initiatives for the enterprise (e.g. IT, Travel, etc.). In the end, you still need to find the right balance.

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

As a company, Raytheon is committed to protecting the environment (see Raytheon Annual Sustainability Report). As an executive co-sponsor of the Raytheon Sustainability Team, Supply Chain is a key member of the cross-functional team responsible to drive Raytheon's sustainment commitment. Supply Chain continues to work with our current suppliers on enhancing existing programs while at the same time driving 'eco-friendly' procurement into our new sourcing activities. In the end, everyone has a role from Logistics (CO2 emissions & returnable packaging) to Technology (paperless processing) to Commodity Management (environmentally responsible supply base).

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

In alignment with Raytheon's Growth Strategy - Grow International Business - Supply Chain must also enhance our capabilities in this area. This includes having the right people with the right skills, tools and processes to support customers; wherever, whenever.

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

In addition to increasing Supply Chain's international capabilities, we need to strengthen our presence in all front end of the business activities. Raytheon Supply Chain's ability to drive affordable, predictable and flawless execution will continue to be a priority.

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

Three internal challenges come to mind. First is the alignment of cross-functional stakeholders in supply chain related activities. Second is the large number of programs (over 8,000) that Supply Chain supports. Third is having the right skills and talent to execute. In order to achieve excellence, Raytheon Supply Chain spends significant time in all three areas.

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

It is aligning Raytheon with the right suppliers / supply-base to ensure our commitment to deliver innovative products and services to our Customers. Once the right supplier is selected, robust supplier management including establishing the right performance measurement indicators ensures the product or service is meeting design criteria.

What are the supply chain challenges to which Raytheon SHOULD be paying more attention?

I believe Raytheon Supply Chain is already focused on the right challenges. The issue is that we need to be moving faster to close the gaps where they exist.

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

Raytheon Enterprise Preparedness has the lead. Depending on the event, recovery efforts are lead at the site, business, or corporate level. Working level teams have the responsibility to first respond to the issue and then implement the necessary recovery plan. Simulation exercises are leveraged to prove-out business continuity and recovery plans. It is an issue that Raytheon takes very seriously.

How do you grade Raytheon's supply chain overall performance in client satisfaction?

I believe that Raytheon Supply Chain performs well and our customers and key stakeholders frequently recognize our performance. We are an outright "A" in some areas and in several areas I'd grade us "A-/B+". That means there is room for Supply Chain to improve on our processes and results. We can always be better.

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

This is easy; in most cases the end user of a Raytheon product or service is the warfighter. Keeping focus on the customer and delivering NoDoubt™ solutions is all the motivation our organization needs.

How important is / are the Contract Manufacturers (CMs) for Raytheon' overall strategy?

As Raytheon continues to drive Mission Systems Integration (MSI) strategy, the reliance on contract manufacturers (or sub-contract suppliers) as part of Raytheon's overall strategy is critical.

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

There are several key factors to effective partner management. It starts with selecting the right partner with the right capabilities. From there a successful relationship will depend on the integrated team (Supply Chain, Engineering, Operations, Supplier / Partner, etc) driving robust change management. In the execution phase, the right measurement system, requirements planning and active communication process all support flawless execution.

How important is trust in the Raytheon / CMs relationships?

Trust is the cornerstone of any relationship especially one where you rely on an external partner so heavily. Ultimately you are accountable and you must take ownership over the successes and failures. Without trust you are almost destined to fail. With trust you can do great things. Patrick Lencioni's "Five Dysunctions of a Team" explains the importance of a trust based relationship perfectly. In summary, trust by verifying.

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

Remaining flexible and lean will enable you to manage both upturns and downturns. Fortunately, Raytheon's diverse product portfolio, customer and supply base has enabled Raytheon to operate consistently despite the recent economic environment.

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

Sourcing decisions; Make / Buy / Where have been and should always be based on Total Cost of Ownership (TCO) and regulatory compliance (ITAR, etc). For Raytheon, a "one size fits all" approach doesn't necessarily work. International customers continue to place emphasis on establishing an in-country presence in addition to off-set requirements. In the end, several factors play a role in sourcing decisions.

What are your thoughts regarding globalization?

Globalization has two elements. First, Raytheon faces increasing global competition for its products and services. Secondly, globalization from a supplier / supply base creates unique challenges as well. One certainty is that globalization in the Aerospace & Defense marketplace will continue to shape how Raytheon executes our supply chain activities.

What attracted you to supply chain management?

Great question. Management of multiple complex concurrent activities. Supply Chain is in constant motion with multiple facets. As a person who wants to be involved in all aspects of the business, Supply Chain was an attractive career proposition. And, I truly believe a strong supply chain organization is absolutely a strategic and competitive advantage.

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

First and most important, you have to love what you do and be passionate about what you do. Second, you have to set vision, not just for today but for where you like the organization to be. Third, you need to always lead by example and win hearts and minds. Lastly, but clearly very important, you have to be able to build strong teams of dedicated individuals around you. With a strong team you have the trust in one another to lead the organization forward. Everyone in the organization knows where they stand and what their part is in contributing to the organization's success.

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

Excellent question. By far the most rewarding experience has been to be put into positions where I can shape the vision, drive strategy and execute positive change in companies. I've also been very lucky to have worked in four different industries and with each I've had to pleasure of working with great people and have been able to affect their careers and impact their professional development.

What have you learned as "Vice President, Supply Chain Operations" that has surprised you or changed the way you do business?

Interesting question. I believe learning is a continuous process, so my answer is at this point in time. You provide leadership for the team by relying on your influence, integrity and reputation. You need to check your ego and emotion at the door.

Who do you rely on for advice?

I rely heavily on those individuals with whom I have a trust-based relationship. In these situations, the advice ends up being a two way dialogue. This includes colleagues, peers, friends and family.

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

I've made a personal pledge to balance both aspects of my life. At work, I have a team I can rely on. I lead by example and encourage my team to find their inner balance. At home, I have a family that is absolutely supportive. When I do get out of balance, I hear about it fairly quickly.

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?

Be proactive and take risks. Turbulent times to me are opportunities - they help define a burning platform to rally teams and make the case for change. However, don't wait for turbulent times to make the changes you know need to be made. If you wait until turbulent times, you've waited too long. In the end, you will be forced into a survival mode where sub-optimal decisions are made due to resource or timing constraints. Make the incremental changes in good times and drive a continuous improvement mindset. Change is not a start and stop exercise. Those companies who embrace a culture where change is a continuous evolution will always be stronger in the end.

March 2011

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