Players: Jerry Jones, CPO and Dir. of Supply Chain Mgmt, Synetics Solutions

Interview by Karen Prema -- Purchasing, 3/16/2006

Managing the supply chain at a manufacturer of customized equipment for high-tech OEMs is a constant test of flexibility and contingency planning. Just ask Jerry Jones, CPO and director of supply chain management for Synetics Solutions in Portland, Ore. Synetics designs and manufacturers advanced airflow and robotic systems for the semiconductor equipment industry.

Jones reports directly to president and CEO Greg Marvell. Jones’s management responsibilities include strategic and tactical purchasing. Other responsibilities include warehousing, distribution and logistics. His key areas of focus include cost reduction, inventory turns improvement, global sourcing and inventory accuracy.
 
Jones holds a BA from San Diego State University and an MBA from Pepperdine University. He, also, attended the Purchasing Executive Program at the University of California, Los Angeles.

As a young MBA graduate Jones’s first position in purchasing was as a materials manager for a small tape drive manufacturing firm in San Diego. This was a fast paced, high growth company that was later purchased by Mitsubishi Kasei Corporation of Japan. With that company, Jones received extensive training from Japanese management on supplier relationship development, which he has leveraged throughout his career.

What are the biggest challenges for the sourcing organization at Synetics?

Many of our products are highly configurable and/or subject to rapid engineering change. Our configuration management and inventory management processes must be constantly monitored and improved to limit obsolescence exposure.

Are you called in to consult with product design and development teams more today than in the past?

The Synetics design process is collaborative throughout the organization and with our supply partners. We understand that the best time to control cost is in the engineering phase. In order to balance cost with time-to-market, we also maintain prototyping capabilities in-house. This allows us to reach a stable design quickly, and to pass that design to our suppliers and avoid the costs associated with engineering revisions.

How are your purchasing decisions improving your overall business?

Specifically, we are focused on improving profitability. Our purchasing metrics drive us to support that goal through cost reduction and by limiting inventory investment. We have been successful in these areas and have been able to contribute significantly to the bottom line.

We look at our procurement process on two levels – strategic and tactical. Strategically, we have a supply chain management group that operates with an eye toward the long term and is measured on their ability to achieve the lowest total cost of ownership. Tactically, we have a strong team of seasoned professionals that manage a varied group of suppliers to insure on-time delivery.

What is the most important trend you see in purchasing today?

Global sourcing. Newcomers to the global marketplace can be dazzled by the sticker price on goods originating in low cost regions. It takes a lot of experience, and hard lessons, to understand and manage the associated soft/ancillary costs. There are some astonishing opportunities but there are also some serious pitfalls.

How has global sourcing changed way you manage your supply chain?

It has highlighted the importance of logistics. Certainly the cost associated with moving product is a key factor but you must also consider the services offered by your carriers.   

Do you use e-procurement or e-sourcing tools? 

Synetics makes use of reverse auctions and online bid submission. We also rely significantly on electronic information exchange for quoting and transfer of engineering data. We’ve found this significantly reduces our need for vertical integration and allows the supply base to function as an extension of our own manufacturing.

Do you bid more of your contracts or leverage existing supplier relationships?

Relationships! We believe that relationships are the key to success. Over time the benefits of solid supplier relationships pay huge dividends in time to market, up-front cost, and quality.

What has been the biggest technological breakthrough for purchasing professionals in the past five years?

The Internet continues to be the breakthrough technology that transforms the way we do business. We are routinely utilizing tools and capabilities for online searches, reverse auctions, and e-commerce that were unknown five years ago.

How important is supplier diversity to your company?

Supplier diversity has not been a major driver. We look for suppliers that best support our business model. This has led to a highly diverse supply base without having a specific objective for diversity. We developed a strong program for supplier identification and qualification, and a rating system that ensures best in class suppliers.

Supply chain strength has become increasingly strategic. Purchasing professionals are called on to have a broad understanding of their organization, its customers, its market, the domestic and global economy, legislation, logistics, business law, accounting, finance, manufacturing methods, and inventory management principles. Strategically they need these tools to make the best possible decisions.

What advice would you give to someone just starting out in the purchasing or supply chain field?

Be a team player! Success in purchasing is built upon establishing relationships both internally and externally. It is far easier to achieve your objectives with support from your suppliers and company peers than attempting to do it alone.