Flex: Paul Baldassari

IndustrialSage

Paul Baldassari of Flex Manufacturing joins the Executive Series to share how their company pivoted abruptly in response to Covid-19.

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Danny:

Well hello, and welcome to today’s Executive Series on IndustrialSage. I’m Danny Gonzales, and I’m joined by a very special guest today. You are in for a treat. Today we’re going to be talking with the executive vice president, Paul Baldassari, from Flex Manufacturing. And we’re going to be learning about Flex, what they do. We’re going to learn about Paul’s story. And we’re also going to learn about this massive pivot that Flex took at really the beginning of the pandemic, and we’re going to hear about their response. And they did some amazing things that you’re going to hear about. So before we get all into it and get excited, I’m going to introduce my guest here. We have Paul Baldassari. Thank you so much for joining me today on the Executive Series on IndustrialSage.

Paul:

Thank you very much, Danny. I’m honored to be with you today.

Danny:

Well, this is going to be a fantastic episode. I’m very excited about it. But before we jump all into it, let’s answer the first big question. Who is Flex? What do you guys do?

Paul:

Well, Flex, we want to be the manufacturing partner of choice. We want to design and manufacture products for our customers that improve the world. Today we operate in a lot of different industries. We do medical products that we’re going to talk about in more detail. We do automotive products, industrial products, products that power the internet on consumer devices as well as enterprise computing and communication devices. And probably for the audience in the room that you sit right now, there is going to be probably five products that Flex made for you for our customers that have the brand on the product. And we are proud that we serve so many people in so many different countries.

Danny:

That’s great. So real quick, just for context, how long has Flex been in existence?

Paul:

Flex started 50 years ago in contract manufacturing. Since then, we are proud to produce quality products for our customers. We started in PCBs, supporting basically electronic components on boards. And we increased the depth of our services to our customers, not only doing electronic boards, but today we also do a lot of tests, automation, design for our customers, this great, full products, and do the logistics and repair for our customers that we serve full product range as well, the full depth of the market.

Danny:

Excellent. Okay, so we’re going to jump in to more about the business and obviously this response that you had with Covid. But before we do all that, I want to get to know Paul. I want to get to know you a little bit more. Tell me. Take me way back. How did you get involved in this space?

Paul:

It was kind of a fascinating story. I was still a student. I worked for a company that was providing IT services in a summer job. And Flex was my largest client. And I was so fascinated by the products that Flex is doing because you’re always on the forefront of technology that I fell in love with the culture and with the environment. And that was about 23 years ago. So technically, I live my dream. I’m still in my summer job. But I have many opportunities in Flex. And that was really exciting. I started in IT, and I had the opportunity to go into engineering, to go into operations. I led a factory for a while with 7000 people, and that was a big learning for me. I got opportunities to lead quality. At some point, I was entrusted to lead HR for the full company which was a complete segue, but a very interesting experience. And today my team and I are leading manufacturing technology, strategy, quality, and other core functions for the company which is very exciting because you get to learn so many different things in Flex.

Danny:

That’s amazing. Wow. Okay, so quite the history there. You just fell in love with it, basically. You just—you said internship there out of college, or first job there.

Paul:

Absolutely. The great thing about Flex is you see so many different things. It’s like the dream of an engineer that you can work on the forefront of medical. You can work on the forefront of automation. You can work on the forefront on automotive. And you can also see how the technologies and the learning in each of those industries converge together. When you think today about an autonomous car right now, that’s where you merge the thinking of traditional automotive suppliers or automotive companies with the thinking of enterprise computing. When you have an autonomous car today with the edge computing that you need in the trunk, you have basically a small data center. And we know all of that because we produce, and we help our customers design data centers. And since 50 years, we are serving as well our customers in automotive. So we know how to put that in, how to make that server work in a car-type of environment, and with that help to power the future of intelligence cars.

Danny:

That’s fantastic. So alright, you’re in college. I’m taking you back there. You said you were in IT, so I’m assuming you were studying IT or some facet of it. At that moment, before you took that job with Flex, what were you planning on doing? What were your dreams set on?

Paul:

In Austria we have a special way of education that, even in high school already, you can learn a trade. So I did communication engineering. So I was always interested in technology, especially around communication engineering, how microelectronics work. But then I got into business administration, and I started business administration with a focus on IT. And that gave me the opportunity when I started my internship with Flex to help Flex manufacture high-tech devices. And if you think about how Industry 4.0 is powered today, it’s all about the convergence of manufacturing technology with IT. So both of my interests are coming together in this company, and that makes it so exciting. So when I started my internship, I was right on the manufacturing shop floor trying to help with IT solutions to make the production process more efficient but also to increase quality through tracking our products’ flow through the shop floor. And I see that with many colleagues and people from my team as well. Today a lot of people have passion about IT, but people also want to have something physically in their hand. We are powering those devices that enable IT solutions to function in an Industry 4.0 world, and that makes it really exciting to work in this company.

Danny:

That’s awesome. That is fantastic. You’ve had a very long career there, obviously. Is there a moment or maybe a person that jumps out to you that has had a huge impact in your career? That could be personally; it could be a mentor there in your career at Flex. Who jumps out to you, or what jumps out to you?

Paul:

Let me start from—it is a long career in this company for 23 years, but it doesn’t feel like that because you do so many different things. Every time you do something completely different, you work for a different industry, it feels like a new job. And that brings me as well to my mentor, Francois Babier. As a techie, I focused very much on having the best technical solution, having the best SMT line run the production. And he told me and taught me that it’s really all about the people. And that really was a revelation for me. At the end, we are all very passionate, especially people with a technical background. We want to bring the best solution in place. But everybody can buy the best SMT line. Most of the companies can put real nice factories in place. But customers are not choosing us because we have the best line or because we have the best factory. They actually choose us because we have the best team.

And so for us, developing our teams and making sure that we have these high-performing teams in our company are most important. And at the end, this high-performance team is not only the people within Flex. It’s actually an extension of our people together with the customer team together with our technology partners and our suppliers. And Francois really helped me to understand that. And today he’s still a great mentor, really making sure that we keep always the people agenda as priority number one because at the end, that’s our sustainable advantage, I would say in the industry. And that’s a sustainable value that we can add to customers to help in creating this high-performance teams that together find great, innovative solutions and make that work in scale.

Danny:

Well, now I understand when you were talking about how you moved into HR a little bit, where that might’ve come from. That’s starting to come full-circle. I can see a little bit of passion there. So yes.

Paul:

Absolutely, yeah. At the end, it’s really all about people. When we think about our industry 10 years ago, the constraint of growth was always, can you get an SMT line fast enough? Can you get material fast enough? Can you build up a factory fast enough? But today, we are in a world where it’s all about people. All companies I know have only one constraint, and that’s talent and making sure that people work well together. It’s not only good enough that you have genius people in your organization. Actually, you need to bring a diverse team together that can work together. And that got even more complex in collaborative design with our customers. Today we provide a lot of design solutions across the full spectrum where we teach some things to our customers in areas where they have not operated before. They teach us a lot, and we need to have trust and work together. Our mission and vision is we want to be the most trusted partner because that enables an environment where people can work freely together, share ideas, come up with new ideas, and help to move things faster. And specifically through the pandemic, this was so important that we break down these barriers and all work together and create solutions that help us to create a better world and, in that current point in time, keep everybody healthy.

Danny:

Absolutely. Well, I think that’s an absolutely great pivot point or a way, a great segue as we transition a little bit. You were talking about the pivot with Covid and everything. Part of the story is that you guys were one of the companies that jumped on and said, there’s this huge shortage of ventilators that are coming on, and there was a massive need on a global scale. And you saw that need, and you responded to the tune of where you guys created just a ridiculous amount of ventilators. How did you say, from a business standpoint, we’re going to jump in, and we’re going to tackle this challenge?

Paul:

So we have been a large supplier of medical products in the past. And with that, we understood the responsibility. For example, we do a large amount of the worldwide market on blood glucose meters. So we understand our responsibility that we continuously serve patients that need help with monitoring their blood glucose. The good thing about medical is, it’s very high-quality products. The challenge that the medical industry faced in the past was that things go pretty slow because you have so much regulation that you need to take care of, and it’s totally understandable when you develop an industry like that that the patient’s health is most important. But once you get into a pandemic where it’s even more important that you get product fast out to the patients that need it, we were able to get with our customers and with regulatory environment and authorities to break down those barriers and speed up not only the design piece but also the supply chain. It takes an enormous amount of time, normally, to qualify all of your supply chain. And some of that is pretty rigid, I would say. So it’s difficult to scale.

Danny:

Yes.

Paul:

New technologies like additive manufacturing helped us suddenly to speed up the design process, but even on volume, we were able, with additive manufacturing, to bring parts that were stuck in some countries where factories were shut down. So it was great to have this new way and new spirit together with our customers and produce many thousands and millions more of devices that helped people during this pandemic. And I think that’s going to be a real revolution in the medical segment because now people understand how fast we can be when we break down all the barriers, work together. We are not compromising on quality. We still need the same quality because we are actually providing people that save lives. But if they go wrong, they can also put people at harm. So we don’t want to risk anything on quality, but we’ve shown that with better collaboration, we can be much faster and help much more people.

Danny:

Absolutely. And to that point, I want to be clear on here. I just want to make sure I have my facts correct. You had not ever manufactured a ventilator prior to 2020. Is that accurate?

Paul:

The ventilator story was really about how you can speed up design, how you can speed up volume REMS, and how you can also mitigate supply chain challenges. One of our key suppliers in the ventilator business was shut down. So we were supposed to deliver 20X more ventilators from one month to another, and we couldn’t get one component. So what do you do? We have today 106 additive manufacturing printers in the company. We put all of our brains together, and we basically used every, single piece of capacity that we had to provide components that we could use for ventilators. We scaled up, from a people perspective, from an asset perspective, and it was really great. Switching to the masks, that’s something that we learned in February last year.

I was in China in late January, and Covid just started up in China. It was not really a thing yet in the US nor in Europe. I remember we had our first Covid contact in Europe, beginning of March, and by then people still thought that this will go away. Unfortunately, it did not. And we took a decision beginning of March that we are going to produce our own masks. And we have not produced a single mask before. So together with one of our trusted partners, we actually designed and bought 12 manufacturing lines. We distributed them in 10 factories around the world because, at that time, the conversation was about could you actually move masks from one country to another. The government started to put in supply chain restrictions. And so we diligently put together not only manufacturing but also supply chain strategy that we could serve from those 10 strategic locations all of our people internal and also strategic customers and suppliers. And now we’ve produced over 80 million masks.

We did not have a shortage at all in the company about face masks for our people. We also provide a lot of masks to communities, to families. What we’ve seen during the crisis is that most of the Covid infections actually don’t come from within the company—we have very strict measures from social distancing to disinfection, so we have a very decent protocol—but come from the outside when kids bring it from school or people meet friends outside. So we want to give as many masks as possible, not only to our people, but also to their families that they can protect themselves. And we are donating a lot to communities as well.

Danny:

That’s amazing. That’s fantastic. During that time—you were mentioning a lot of the government restrictions and challenges relative to supply chain. You had suppliers that were completely shut down in other countries. Not to mention that even if you did have access to it, the delays were huge. So as sure as something as—you have a boat stuck in a port that can’t leave or it’s sitting out waiting to come in from wherever and there’s weeks to months where they’re behind. How did you navigate that, from setting up, looking for new suppliers? How did you navigate that?

Paul:

There is the IT piece that comes in. So already before Covid, we created a global supply chain system that provides us real-time supply chain information. So today we have a very good view on where are all the different parts in the world? Where are the parts incoming? What are the risks? And that system even allows us to look at a specific event. So if there is an earthquake in a specific country or location, which factories are hit? Which of those factories actually impact our factories and impact our customers? And we can go back to our customers. So first of all, we can react really, really fast.

Second, due to our global scale that we operate today in 30 different countries, we are able to mitigate some of those supply chain shortages with internal manufacturing, some of that through our traditional manufacturing, some of that through additive manufacturing, and then work with alternative sources. So we have internal teams. As soon as we saw part shortages, we looked into, can we qualify other suppliers? Are there other companies out there that can do something similar or can convert fast enough? And I don’t want to say there were no problems. We had plenty of shortages, but we were able to overcome those together faster for our customers, and especially in the areas where it’s about helping people; that was most important. And I want to thank the team as well. People have worked crazy hours, like in so many other industries as well. Our team did crazy hours, and the motivation that we can help people, especially when they need it most, made everybody work twice as hard.

Danny:

Well yeah, absolutely. And I can only imagine. It sounds like you guys were actually way ahead of the curve compared to a lot of other manufacturers. We keep hearing about supply chain resiliency and obviously, that being a huge theme, especially as we move forward, looking at really managing risk, looking at—just analyzing the supply chain from getting a lot more granular than it was before. And so I think it sounds like, because of some of the technologies you had in play, you were able to respond a lot better. Had you not had that in place, you probably wouldn’t have had those kinds of results. Does that sound about right?

Paul:

Absolutely. We saw it already in the past. Fires, earthquakes, and so on, always had an impact on—and the supply chain is incredibly complex today. If you look at a cell phone, a cell phone has, today, about 2000 parts. You miss one of those parts, you cannot produce the cell phone. And it’s even a bigger disaster for us financially because then you have the 1999 parts on stock, and the one part is missing. And you’re converting everything into revenue, you have more inventory, and the customer is not happy. So it really forced us to have a very solid system. And as I said, our system today, if there is an event on a single point on the planet, then you see immediately which of our suppliers may be impacted. We can contact them directly or see that directly from the message feed that we get automatically in, see which of our plants are impacted, talk with our customers and take mitigation measures. But it had proven pretty resilient as well in Covid times.

Covid did not hit the world at the same time. First, China was shut down; then, Europe started to be shut down. Then parts of the US, then Mexico, and so on. So there was always a little bit of leeway that you can take from the areas that are currently not so impacted that you get some of the components, and that’s where our system really thrived. But at the end, in a global pandemic, for sure we learned a lot as well that new technologies are helping us to improve, automation is very important, that you can scale, also that you reduce the number of people that need to be in a factory. We try to have in the areas where we were highly impacted by Covid, to have as little people as possible in factories and have them work from home. Automation is a big helper for that. Additive manufacture is a very flexible technology. If you’re missing certain components that you can 3-D print them yourself and use them to bridge the supply chain gap. So I think, overall, it helped us a lot to improve our system. It has taught the whole industry a lot as well as governments. We’ve seen a huge regress to have more local manufacturing, especially around medical and other critical products in region. And with our 30 sites worldwide, we are in a very good position to fulfill that demand.

Danny:

That’s fantastic, really an amazing story. I’ve got some numbers here I just want to run over to help to really convey to our audience what this really meant. One of the things you were talking about in terms of going through the R&D process and reducing the amount of time you’re able to actually go from the R&D to full-on manufacturing to shipping out, I have a note here talking about that. And typically, instead of having a 12 to 24-month cycle going—obviously, you have regulation; you have all this stuff—you’re able to go and produce stuff in a matter of—is this correct? I have six weeks, six weeks.

Paul:

Absolutely, yeah.

Danny:

That’s incredible. And you were able to produce more than 50,000 ventilators in just a few months again, knowing all the supply chain issues and the challenges. That is fantastic. You mentioned about additive manufacturing, which is obviously, it’s a great new technology boost we’ve had over the last—it’s relatively new, all things considered, which I think is super exciting, especially for the future, as you mentioned being able to respond. It’s really that time piece. Then, we talk about masks. With the masks, you had never produced those before. And now, I have a note here, you’re generating more than 62 million, or you’ve generated more than 62 million in under a year. That’s a small number. I’m just playing, obviously. 1.5 million masks per week. Pretty amazing. Absolutely amazing. And I think you had a great synopsis, a summation of everything as far as what you’ve learned in going forward. As we wrap up this episode here, going forward, if you could boil it down a little bit, what is your biggest takeaway? What is Flex saying, hey, this is what we’ve learned over the last 12 months? Seems like the last five years, but it really has been 12 months. What’s the biggest takeaway?

Paul:

My biggest takeaway here is, and I want to thank our customers, when we get to think out of the box, we can make the impossible happen. So that, as you said, 12 to 24 months on a product development cycle, that’s in normal times. And really, we were able only to boil it down to six weeks because everybody was working together under huge pressure, obviously. But also we have a very open mindset and are excited about helping people. So we’ve shown that we can do it. I think there are many more health challenges. There are many more other challenges out there, from feeding people to providing safer transport to providing more safety on workplaces and so on. So together, we can achieve pretty much everything when we work together as a team and we take down barriers. And I think we can all be very proud that we were able to achieve that all together and, again, suppliers, customers, all folks really—kudos to everybody.

The other part is, digital revolution in the industry is key for future success. I was talking about the resilient supply chain. The resilient supply chain is a result of real-time digitization of supply chain. The same thing is important on the manufacturing floor, making sure that you gather all of the data that you have and create information that provides you insights that drive real business decisions that make a real difference. So Industry 4.0, digitization is key for us. Automation is key for us because we want to be able to manufacture. Even if our people cannot come to the factory, we want to provide an environment where people can work remotely and still produce high-quality products on the shop floor. Simulation, I didn’t talk about it yet, but has been key as well. So making sure that we have a common model that we can all share our thoughts and agree on how things should look like in the future enables us to be much faster and enables us to be much more efficient.

We have trained, by now, people in every factory. We are creating digital twins or have that, actually, in most of our factories already. During the pandemic, we were optimizing continuous blood glucose meter manufacturing and many other projects with simulation, and I think that’s going to be key for the transformation in the future. It not only told us that we can work remotely over Zoom and we can work on digital models together, but it also creates a new dimension for us. Before—we can actually go forward in time and do things on a digital model together and agree on what the optimum should look like before we start putting machines in place and before we put bricks and mortar in place to build buildings and do many more simulations and pilots and learn what best-in-class will look like in the future before we put things in. And then, it’s fixed and it’s more difficult to optimize.

Danny:

Absolutely. Paul, listen, I really enjoyed our conversation. This has been a fascinating story. I’ve loved hearing and learning about you. I think it’s awesome that you got introduced to Flex 23 years ago, and still there today, and just instantly fell in love with it. And you’re helping to solve some incredible challenges and do it in an amazing way. So there’s definitely something very special going on at Flex. Thank you for sharing your story. Thank you for sharing Flex’s story with us today. I’m sure we’re going to have people that are going to want to learn more about you so they can go check you guys out at flex.com; pretty easy to remember. But Paul, thank you so much for your time and, again, sharing your story with us.

Paul:

Thank you very much, Danny. My pleasure, and I also want to take the opportunity to thank the full Flex team and all of our partners what is an amazing job during the crisis and looking forward to continuous innovation that we do together.

Danny:

Awesome. Well, that wraps up today’s Executive Series. Man, that was a great story with Flex and Paul. So many takeaways from that. I think a lot of people look at the whole pandemic with Covid, and I guess there’s two ways of looking at it. There’s glass half empty, glass half full. Obviously, there’s been a lot of—it’s been definitely challenging on multiple levels. And there’s definitely been, when you look at the deaths and things that are happening there, not good stuff.

On the flip side, there’s been a lot of things that we’ve been forced to look at and reevaluate. We’ve always been talking about automation and digital transformation in Industry 4.0, all these different technologies and these emerging technologies that are happening. We’ve all been forced, all across every industry, really, to think differently and do differently. And I think that is one of the big silver linings that we’re seeing and sharing stories like we’re hearing with Paul over at Flex and how they responded and big takeaway about what we can do when we work together and we focus and remove barriers is pretty incredible. So anyways, that’s all I’ve got for you today. Thank you so much for watching or listening on today’s episode on IndustrialSage, the Executive Series. I’ll be back next week with another episode here, and I’ll talk to you then. Thanks.

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