September 3, 2024 • 17 mins
Creating an efficient, resilient, and sustainable supply chain strategy is essential for success, much like preparing a hearty Sunday lunch for the family. Salvatore Alimentato, Head of Supply Chain Management (SCM) for the High Voltage Products business at Hitachi Energy, emphasizes this in the latest Power Pulse episode.
This episode examines the importance of supply chain management in high-voltage products and how its role transcends basic cost-cutting when it comes to procurement. SCM involves mastering strategies that enhance an organization’s competitiveness, drive sustainability, and establish resilience in the face of global disruptions.
Tune in to discover the best strategies for creating an excellent supply chain recipe!
---
Salvatore Alimentato is the Head of Supply Chain Management (SCM) for the High Voltage Products business unit at Hitachi Energy.
With over 25 years of experience in Supply Chain Management, leading global, cross-regional teams and navigating diverse, multicultural environments, Salvatore has held several leadership roles in SCM in Brazil, Italy, and Switzerland.
He holds a master’s degree in electrical engineering from Faculdade de Engenharia Industrial, Brazil, and a master’s degree in business administration from the Fundação Getulio Vargas, Brazil.
---
Make sure to follow us and click the notification button to get updates on new episodes.
Visit www.hitachienergy.com/powerpulse for more information.
The Power Pulse podcast is produced and edited by Creative Chimps for Hitachi Energy.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:01):
High voltage takes center stagein this brand
new season of HitachiEnergy's Power Pulse podcast.
We promise to bring you great contentfrom the brightest minds in the business.
We'll discuss challenges, opportunities,and all the hot topics
any high voltage enthusiast
or anyone interested in sustainabilityfor that matter, is sure to enjoy.
This episode of the podcast focuseson the role of supply chain management
(00:21):
in high voltage products.
To tell you about it, we invited SalvatoreAlimentato, who is the global head
of supply chain management for the HighVoltage Business Unit at Hitachi Energy.
He holds a degree in
electrical engineering from Faculdadede Engenharia Industrial in Brazil
and an MBA from FundaçãoGetulio Vargas, also in Brazil.
Salvatore will tell youthat supply management does not refer
(00:41):
specificallyto special procurement activities,
or is about buying goods or servicesat the lowest cost.
Supply management is all about strategiesthat can enhance
a company's competitiveness,support the sustainability goals,
and ensure resiliencein the face of global disruptions.
Welcome to this episode of PowerPulse podcast.
Thank you for coming in, Salvatore.
It's great to have you here today.Thank you very much.
(01:03):
I've looked into your professionalbackground.
It’s quite interesting.So you've been working
in supply managementfor quite a while, about 20 years.
But you come from the automotive industrybefore you joined
Hitachi Energy and you started your careerflipping burgers.
Is that right? Yeah.
Go on, tell us about it.
That's funny because 30 years ago. Okay.
Then I started McDonalds.
Okay. When I was a teenager. Was it fun?
(01:25):
It was really, really funbecause in that time, I was in Brazil.
I was born in Brazil.
And, you know, it was like a new opened
restaurant in Brazilthat McDonald's just come to my town.
I say, oh, it's nice.
Then I see the opportunity to work there.
Then it was so fun.
But then, I say that this takes melike four years in my life.
(01:46):
Wow. it's a kind of,you know, my first university
because I worked there from 15 to 19before I start my real university.
As you mentioned in the engineerbackground that I have.
If we can move on to yourprofessional career within Hitachi Energy.
So you work in supply management andsupply chain affects all of us every day.
So it goes from
the food that we eat, the clothesthat we wear, the latest phones, gadgets.
(02:10):
You have to get your materialsfrom somewhere.
So you have to look into supplywhere you're getting this from.
It's not just something that businessesare concerned about.
It's something that impacts everyone.
From your perspective,if someone asks you what is supply chain?
What's supply management,how do you explain this to them?
How would you explain your job?
It's difficult
because also my wife, sometimes she said,oh, I cannot explain what you are doing.
(02:31):
But let's go, let's go.
Let’s hope she'll tune into this episode?
Yeah. She's going to listen.
Let's say that we orchestratethe network complex in the company
because we are responsiblefor the sourcing of the raw material,
bring the material for the factoryand the factories has to manufacture this.
After that, we are responsibleto deliver to the customers.
(02:52):
So in the end of the day, we areresponsible for this end -to -end process.
In Hitachi Energy, we name supply chain,in the other companies
we name as a procurement.
And procurement is not only to buythe sourcing at the lowest price.
We need to take care about sustainability,the quality of the products,
and also to be in the lead time of theproduct as well to deliver to the company.
(03:15):
So we need to take careabout a lot of aspects on this one.
I have another example that I thinkmy wife is going to– Go on then.
Yes, they are going to get this.
I can say that the first supply managerthat I met, it was my mum.
Oh wow. yeah. Go on. Why?
Because, you know, I'm Brazilian, butI come with some kind of Italian family.
Okay. My mother is Brazilian,my father is Italian.
(03:37):
But, you know,there is this kind of Sunday lunch.
Right.
Then she needs to prepare the lunchfor the big family.
Yeah. So she needs to prepare.
She needs to say,oh who is going to coming,
when you transfer this to the business,this is the demand.
Okay Business demand. Yeah. Right.
Then she said, okay,I'm going to cook a lasagna.
Okay.
This is a requirement. Then she said,
(03:58):
okay, the dinner or the lunchis going to be Sunday or next Sunday.
This is a kind of planning.
She needs to know aboutwhen is going to be planning.
Yeah. Then she said, okay.
She knows how many people, she knows whenand what we're going to cook.
Now let's go to procurement.
Let's go to sourcing.
She goes in the marketbut she cannot find the food.
Go another one, cannot find.
(04:19):
Oh, maybe she wants a special meat. Right.
That's the single sourcein another market.
Right. So these are kind of complex.
That's the sourcing.
Then she goes to the cookingis manufacturing.
Then go and deliver to the customers,that is the family that's going to eat.
This is more or less what we can talkabout, supply chain procurement
in this kind of complex world.
(04:41):
Brilliant. That's a brilliant example.Thanks for sharing.
So those are the factors you takeinto account when you consider your supply
chain strategy.
So, you know, delays,people safety, sustainability I guess.
How does a plan come together Exactly,I think people come first.
We can say that because, you know,we don't have like a machinists,
we don't have softwares, etc.
(05:02):
People is the key of the supply chainbecause they are the decision makers.
When you make the strategy,people need to deliver the strategy
and the strategycomes from the top management.
Let's say in the high voltage business,
we understand what are the high voltagebusiness’ strategy come from.
With that information,then we go to the market,
understand the market situation,geopolitical disasters, etc.
(05:26):
that we have the Covid.
So there is a lot of influence.
Apart from that, also,we listen the suppliers.
Right.
With that in place,we try to set up the strategy;
what should be the strategyfor diverse pillars that we have?
As I mentioned,sustainability is one pillar.
Another one is a quality. Right.
Another one is a technology- digitalization.
(05:46):
There is a lot of to do in this area.
Another one is transportation.
We have also innovation.
So in each of these boxwe need to deliver some kind of strategy.
Then makes this a little bit complexto put everything together
Right., and you've got different regionswith different compliance regulations.
So I guess your strategy has to bequite flexible and quite adaptive
(06:08):
to all of these and very in tunewith what's happening in each region.
Exactly.
Because, no, we are not a single companyor a single factory.
We have like multiple factoriesall over the world, in the globe.
So we have for North Americato China, to India.
So we need to lead this because we movethe material from one side to another one.
The same suppliers that is based on China,they deliver to Europe,
(06:32):
to North America, SouthAmerica and vice versa as well.
So we need to optimize this and we need tobe complying with the regulations.
Right.
And you mentioned people, number onepriority, the decision makers.
So supplier relationships, you must bea pro at stakeholder management.
Right.
Your team must be very skilled in managingall stakeholders all around the world.
Can you tell me a little bit more abouthow you manage that supplier relationship,
(06:55):
how you make sure that you are matchingall the requirements of suppliers request,
and that they match those criteriathat you've just outlined for us?
Yes, because a supplier relationshipthe people mismatch
with the place the POsSo maybe only to have agreement.
Right.
Some of the people said I have agreement.
Agreement is one point.
But supplier relationship is really,really to build up
the relation,the connection with the suppliers.
(07:17):
What we are doing this, it's ain the simple way, let's say that simple,
you know, it's a little bit complex,but in the simple way that we develop
a strategy and based on the strategy,we know that we are going to move.
We are going to move in this direction,in that direction,
this region, in that region.
Then we need to understand what are thesupplier base that we can find that are.
(07:38):
Based on that, we can select the suppliers- what are the criticals,
what are the strategic ones.
And with that in the range,
we start to develop our frameworkbecause we have one framework.
How we can make this strategywith the supplier relationship.
The first one is to
engage the top management,because it's not only the supply chain
is responsible to make this relation,also the top management.
(08:01):
Right.
With that one we need to create a trust.
I think the first – mutual respectwith the suppliers.
The supplier is not anymore only a vendor.
They are our business partner.
Of course.
We need to create this kind of environmentthat they can trust, yes,
and we trust them.
We align the strategy.
We align the communication.
(08:21):
And this build up the relation.
This, I think the aim of the supplyrelationship strategy.
And you mentioned quality is one ofthe main pillars in supply management.
So these suppliers,how are they vetted for the quality?
I guess they pass stringent tests?I don't know what you would call it.
So as a big companywe have all the certification etc.
and also we have our own wayto qualify the suppliers.
(08:43):
So we qualify the supplier companybut also the parts.
Right.
So we name a PPAP, so process etc.
and also we have some kind of supplierevaluation.
Every quarter,
we have meetings with the suppliers to seehow we can– Do you do it face-to-face?
Sometimes face-to-face,sometimes virtually.
So depends of the levels of suppliers,depends on the region, etc..
(09:03):
So then we have severalways of engagement.
I can tell you that todaywe have hundreds, thousands of suppliers.
Then we manage the different level.
Right Then we talk about the special ones,
the specific ones inside of the supplierrelationship management.
This one, we treat a little bit special;
that we can bring the suppliers,we have a face-to-face.
(09:24):
We engage on a high management level etc..
So it's a little bit different once.
But for all the supplierswe have established
the same way (09:31):
that we assess the suppliers, we evaluate the suppliers
and we give feedbackand we make some kind of improvement plan.
Right, okay.
And you were telling me
just earlierjust before we started recording,
that you get together with these suppliersin different regions and you have sort
of, I think you were calling them,was it Supplier Day? Yes.
So you make a big deal
out of these business partners that are,you know, in this industry with us, right?
(09:54):
I mean, really happy on this onebecause after six years, last year
because of the Covid times etc.,so we could not make this happen.
But this is one really, really nice event
that we promotethat is a kind of Supplier Conference Day.
That's right.
That was the name.
Yes, the Supplier Day internally,
but Supplier Conference Daythat we bring, for example, in China.
(10:15):
300 people attended the event.
Oh wow. 300.
So it was amazingbecause we dedicate one day, full day,
to explain the suppliers;what our strategy that we have;
what are your innovationsbased on the sustainability,
technology, quality, all other pillarsthat I mentioned to you before.
So we just passed the message to thesupplier, share with them what's going on.
(10:40):
And I think it is really greatbecause I see a
lot of motivation of the suppliersto be engaged on this one.
And they also for sure we have likea lunch with them, so we engage more.
Also, the supply chain people is thereso we can get more connections.
We did similar in Indiathis year, beginning of the year
with more than 200 people there.
Oh wow. These are quite big days.It was nice.
(11:03):
Oh good. Good. No sounds great.
So we've talked about supplierrelationship.
If we can move a little bit further along.
Risk management, so there's a lot of riskin what you do, isn't there?
What if you can't source the material thatyou're looking for, what happens then?
What are the biggest risks that you face?
Yes, I think after the Covid.
So everybody
now is looking more at the risk managementbecause before we always have the risks.
(11:24):
But now is moreoverthe people wants to understand
what are the risks,what we are going to do.
So I attend some severalalso customer meetings.
They ask me directly what we are doing,what Hitachi Energy
is doing to preventsome kind of risky disruption, etc.
And the risks are there so geopoliticalrisk, the regulations, the transportation.
(11:45):
Also you can see a lot of new casesthat happens.
Based on that, as I said before, we needto have a strong strategy behind this.
Yeah.
Part of the strategy is onethat the supply relationship.
I think they are interconnected,each other.
The other one is to workmore closely with the hubs,
that is the factoriesto see the demand, the planning, etc.
(12:05):
but then we have to have a diversifyingsupplier base,
not 1 in 1 continent,but multiple continents.
So we need to proactivelylooking for solutions
and always have some kind of mitigationplan in hand.
This is really important. Okay. All right.
So cost efficiency and supply management;we all want to get the best quality
(12:28):
for the least amountthat we can pay for it.
I assume in your job,you'll also be facing that challenge.
How do you balance costefficiency and mitigating risk?
Yeah this is a delicate question.
Let's say
like that because every day everybody asksfor how they calibrate these,
how they balance the cost and the quality,the cost and the risk, etc..
So I think our normal life is like that.
(12:49):
When we go to the shopping,
we can see like a high-cost, high-quality,low-cost, low-quality.
But that's the reasonof the Hitachi Energy, because in
Hitachi Energy we say thatwe have the license to operate.
Yeah.
Safety, quality, integrity comes first.
We cannot compromise on this.
Then we can take this as a standard,as a license to operate.
(13:09):
Then we can move to the others.
So then, how we can apply this?
I think technology, today dataanalytics is really important for us.
One example that I can give you,we have a team for the should cost.
What should cost means?
Imagine one part of our product.
We send this part to our should cost team.
They have some kind of tools, softwares.
(13:32):
They can analyze the drawingsand see how should this piece could cost.
Let's saythat their supplier ask us for 100,
but they can put in the tool, etc.
and we can see the real pricecould be like seventh.
With that we have a real information
that we can go to the supplierand share this with the suppliers.
And they ask you to make some kindof balance because we want that quality,
(13:55):
that specification, but we need to fightfor the best competitive price.
In the beginningwas really hard to make this,
but now the acceptance of the suppliersis really great
because the supplier understandthat we are not going to commit
with their profit,but we need to balance on this,
say that, oh maybe we have more scrap,maybe your setup of the machine.
(14:16):
These also engagein the supplier relationship management
because as much as the supplier trust you,they understand what the final way
that you are going to achieve.
This is your own way.
You've gone quite proactively about itand you're trying to become resilient.
So you’re looking into future disruptionsand you're saying, okay, we've looked
into what this should cost,
what this should look like,and you've presented it to suppliers.
(14:39):
Do you find thatyou've been quite successful in that?
How long has that process been?
How long have you been tryingto educate our business partners
that this is a good way forward,that it’s in everyone's best interest?
More than five yearsI think so, or more than six years.
And it's hitting homenow? Yes, now more and more.
So I can see engagement because thiswe did more behind of the scenes,
let's say the people did thiskind of exercise and just signed.
(15:00):
But for the three years ago,we start to bring these people,
these analysts that we have andput together with the category managers,
that the people that go to negotiatewith the suppliers hand-in-hand.
They go together,they explain the suppliers,
what are the content of thiskind of new should cost?
And the supplier understand
that they need to change somethingin their production to be more efficient.
(15:20):
So it sounds very much like supplierrelationships, risk management,
it's all quite deeply intertwined.
How do you integrate these two?
If we look back into your first answerin terms of overall
supply chain strategy,how do you bring it all together?
I think totally, they integrate becauseone is a connection with the other.
When you have a risk management
team, one big actions is a supplierrelationship management.
(15:42):
When you have a supplier
relationship management,you need to have a risk management inside.
So one each other is interconnected.
So if you do oneyou have to do the other one.
Your job sounds tough.
And I thinkwe've got time for one last question.
I've been asking it to our guests.
If you wanted our audienceto have one takeaway, what would that be?
I think you mentionedit is a little bit complex, and today
(16:04):
we just talk more about supplyrelationship and risk management.
But in the supply chainwe have, as I mentioned before,
sustainability,technology, quality, a lot of things.
But I think the main pointthat we could end up with
some kind of takeaway, I think I'mgoing to come back with the McDonald's.
McDonald’s,they have a basics of the three Cs.
(16:27):
Okay.
Cooperation,coordination and communication.
All right.I think these are simple and efficient.
If you can apply this for everything,that it's going to be fun
and you can deliver what you promise.
Well it's been very interesting
to learn about supply managementand high voltage
and all the risks and challengesthat come with it.
Thank you very much for coming intoday, Salvatore.
Thank you very much.
(16:47):
And I hope you'll come back soonto tell us a little bit more
about all these other aspectsof your very interesting job.
Oh, it will be a pleasurefor me. Thank you. Thank you.
And that's it for today.
We'll be back soonwith some more great content.
But before you go,remember to give us a follow
so you don't miss an episode.
Thanks for tuning in. See you soon.
This episode was brought to you by HitachiEnergy.
Created, written and hosted by BárbaraFreitas-Daniels.
(17:10):
Content and scriptwriting by Cassandra Inay.
Guest speaker Salvatore Alimentato.
Produced and edited by Creative Chimps.
High voltage takes center stagein this brand
new season of HitachiEnergy's Power Pulse podcast.
We promise to bring you great contentfrom the brightest minds in the business.
We'll discuss challenges, opportunities,and all the hot topics
any high voltage enthusiast
or anyone interested in sustainabilityfor that matter, is sure to enjoy.
This episode of the podcast focuseson the role of supply chain management
(00:21):
in high voltage products.
To tell you about it, we invited SalvatoreAlimentato, who is the global head
of supply chain management for the HighVoltage Business Unit at Hitachi Energy.
He holds a degree in
electrical engineering from Faculdadede Engenharia Industrial in Brazil
and an MBA from FundaçãoGetulio Vargas, also in Brazil.
Salvatore will tell youthat supply management does not refer
(00:41):
specificallyto special procurement activities,
or is about buying goods or servicesat the lowest cost.
Supply management is all about strategiesthat can enhance
a company's competitiveness,support the sustainability goals,
and ensure resiliencein the face of global disruptions.
Welcome to this episode of PowerPulse podcast.
Thank you for coming in, Salvatore.
It's great to have you here today.Thank you very much.
(01:03):
I've looked into your professionalbackground.
It’s quite interesting.So you've been working
in supply managementfor quite a while, about 20 years.
But you come from the automotive industrybefore you joined
Hitachi Energy and you started your careerflipping burgers.
Is that right? Yeah.
Go on, tell us about it.
That's funny because 30 years ago. Okay.
Then I started McDonalds.
Okay. When I was a teenager. Was it fun?
(01:25):
It was really, really funbecause in that time, I was in Brazil.
I was born in Brazil.
And, you know, it was like a new opened
restaurant in Brazilthat McDonald's just come to my town.
I say, oh, it's nice.
Then I see the opportunity to work there.
Then it was so fun.
But then, I say that this takes melike four years in my life.
(01:46):
Wow. it's a kind of,you know, my first university
because I worked there from 15 to 19before I start my real university.
As you mentioned in the engineerbackground that I have.
If we can move on to yourprofessional career within Hitachi Energy.
So you work in supply management andsupply chain affects all of us every day.
So it goes from
the food that we eat, the clothesthat we wear, the latest phones, gadgets.
(02:10):
You have to get your materialsfrom somewhere.
So you have to look into supplywhere you're getting this from.
It's not just something that businessesare concerned about.
It's something that impacts everyone.
From your perspective,if someone asks you what is supply chain?
What's supply management,how do you explain this to them?
How would you explain your job?
It's difficult
because also my wife, sometimes she said,oh, I cannot explain what you are doing.
(02:31):
But let's go, let's go.
Let’s hope she'll tune into this episode?
Yeah. She's going to listen.
Let's say that we orchestratethe network complex in the company
because we are responsiblefor the sourcing of the raw material,
bring the material for the factoryand the factories has to manufacture this.
After that, we are responsibleto deliver to the customers.
(02:52):
So in the end of the day, we areresponsible for this end -to -end process.
In Hitachi Energy, we name supply chain,in the other companies
we name as a procurement.
And procurement is not only to buythe sourcing at the lowest price.
We need to take care about sustainability,the quality of the products,
and also to be in the lead time of theproduct as well to deliver to the company.
(03:15):
So we need to take careabout a lot of aspects on this one.
I have another example that I thinkmy wife is going to– Go on then.
Yes, they are going to get this.
I can say that the first supply managerthat I met, it was my mum.
Oh wow. yeah. Go on. Why?
Because, you know, I'm Brazilian, butI come with some kind of Italian family.
Okay. My mother is Brazilian,my father is Italian.
(03:37):
But, you know,there is this kind of Sunday lunch.
Right.
Then she needs to prepare the lunchfor the big family.
Yeah. So she needs to prepare.
She needs to say,oh who is going to coming,
when you transfer this to the business,this is the demand.
Okay Business demand. Yeah. Right.
Then she said, okay,I'm going to cook a lasagna.
Okay.
This is a requirement. Then she said,
(03:58):
okay, the dinner or the lunchis going to be Sunday or next Sunday.
This is a kind of planning.
She needs to know aboutwhen is going to be planning.
Yeah. Then she said, okay.
She knows how many people, she knows whenand what we're going to cook.
Now let's go to procurement.
Let's go to sourcing.
She goes in the marketbut she cannot find the food.
Go another one, cannot find.
(04:19):
Oh, maybe she wants a special meat. Right.
That's the single sourcein another market.
Right. So these are kind of complex.
That's the sourcing.
Then she goes to the cookingis manufacturing.
Then go and deliver to the customers,that is the family that's going to eat.
This is more or less what we can talkabout, supply chain procurement
in this kind of complex world.
(04:41):
Brilliant. That's a brilliant example.Thanks for sharing.
So those are the factors you takeinto account when you consider your supply
chain strategy.
So, you know, delays,people safety, sustainability I guess.
How does a plan come together Exactly,I think people come first.
We can say that because, you know,we don't have like a machinists,
we don't have softwares, etc.
(05:02):
People is the key of the supply chainbecause they are the decision makers.
When you make the strategy,people need to deliver the strategy
and the strategycomes from the top management.
Let's say in the high voltage business,
we understand what are the high voltagebusiness’ strategy come from.
With that information,then we go to the market,
understand the market situation,geopolitical disasters, etc.
(05:26):
that we have the Covid.
So there is a lot of influence.
Apart from that, also,we listen the suppliers.
Right.
With that in place,we try to set up the strategy;
what should be the strategyfor diverse pillars that we have?
As I mentioned,sustainability is one pillar.
Another one is a quality. Right.
Another one is a technology- digitalization.
(05:46):
There is a lot of to do in this area.
Another one is transportation.
We have also innovation.
So in each of these boxwe need to deliver some kind of strategy.
Then makes this a little bit complexto put everything together
Right., and you've got different regionswith different compliance regulations.
So I guess your strategy has to bequite flexible and quite adaptive
(06:08):
to all of these and very in tunewith what's happening in each region.
Exactly.
Because, no, we are not a single companyor a single factory.
We have like multiple factoriesall over the world, in the globe.
So we have for North Americato China, to India.
So we need to lead this because we movethe material from one side to another one.
The same suppliers that is based on China,they deliver to Europe,
(06:32):
to North America, SouthAmerica and vice versa as well.
So we need to optimize this and we need tobe complying with the regulations.
Right.
And you mentioned people, number onepriority, the decision makers.
So supplier relationships, you must bea pro at stakeholder management.
Right.
Your team must be very skilled in managingall stakeholders all around the world.
Can you tell me a little bit more abouthow you manage that supplier relationship,
(06:55):
how you make sure that you are matchingall the requirements of suppliers request,
and that they match those criteriathat you've just outlined for us?
Yes, because a supplier relationshipthe people mismatch
with the place the POsSo maybe only to have agreement.
Right.
Some of the people said I have agreement.
Agreement is one point.
But supplier relationship is really,really to build up
the relation,the connection with the suppliers.
(07:17):
What we are doing this, it's ain the simple way, let's say that simple,
you know, it's a little bit complex,but in the simple way that we develop
a strategy and based on the strategy,we know that we are going to move.
We are going to move in this direction,in that direction,
this region, in that region.
Then we need to understand what are thesupplier base that we can find that are.
(07:38):
Based on that, we can select the suppliers- what are the criticals,
what are the strategic ones.
And with that in the range,
we start to develop our frameworkbecause we have one framework.
How we can make this strategywith the supplier relationship.
The first one is to
engage the top management,because it's not only the supply chain
is responsible to make this relation,also the top management.
(08:01):
Right.
With that one we need to create a trust.
I think the first – mutual respectwith the suppliers.
The supplier is not anymore only a vendor.
They are our business partner.
Of course.
We need to create this kind of environmentthat they can trust, yes,
and we trust them.
We align the strategy.
We align the communication.
(08:21):
And this build up the relation.
This, I think the aim of the supplyrelationship strategy.
And you mentioned quality is one ofthe main pillars in supply management.
So these suppliers,how are they vetted for the quality?
I guess they pass stringent tests?I don't know what you would call it.
So as a big companywe have all the certification etc.
and also we have our own wayto qualify the suppliers.
(08:43):
So we qualify the supplier companybut also the parts.
Right.
So we name a PPAP, so process etc.
and also we have some kind of supplierevaluation.
Every quarter,
we have meetings with the suppliers to seehow we can– Do you do it face-to-face?
Sometimes face-to-face,sometimes virtually.
So depends of the levels of suppliers,depends on the region, etc..
(09:03):
So then we have severalways of engagement.
I can tell you that todaywe have hundreds, thousands of suppliers.
Then we manage the different level.
Right Then we talk about the special ones,
the specific ones inside of the supplierrelationship management.
This one, we treat a little bit special;
that we can bring the suppliers,we have a face-to-face.
(09:24):
We engage on a high management level etc..
So it's a little bit different once.
But for all the supplierswe have established
the same way (09:31):
that we assess the suppliers, we evaluate the suppliers
and we give feedbackand we make some kind of improvement plan.
Right, okay.
And you were telling me
just earlierjust before we started recording,
that you get together with these suppliersin different regions and you have sort
of, I think you were calling them,was it Supplier Day? Yes.
So you make a big deal
out of these business partners that are,you know, in this industry with us, right?
(09:54):
I mean, really happy on this onebecause after six years, last year
because of the Covid times etc.,so we could not make this happen.
But this is one really, really nice event
that we promotethat is a kind of Supplier Conference Day.
That's right.
That was the name.
Yes, the Supplier Day internally,
but Supplier Conference Daythat we bring, for example, in China.
(10:15):
300 people attended the event.
Oh wow. 300.
So it was amazingbecause we dedicate one day, full day,
to explain the suppliers;what our strategy that we have;
what are your innovationsbased on the sustainability,
technology, quality, all other pillarsthat I mentioned to you before.
So we just passed the message to thesupplier, share with them what's going on.
(10:40):
And I think it is really greatbecause I see a
lot of motivation of the suppliersto be engaged on this one.
And they also for sure we have likea lunch with them, so we engage more.
Also, the supply chain people is thereso we can get more connections.
We did similar in Indiathis year, beginning of the year
with more than 200 people there.
Oh wow. These are quite big days.It was nice.
(11:03):
Oh good. Good. No sounds great.
So we've talked about supplierrelationship.
If we can move a little bit further along.
Risk management, so there's a lot of riskin what you do, isn't there?
What if you can't source the material thatyou're looking for, what happens then?
What are the biggest risks that you face?
Yes, I think after the Covid.
So everybody
now is looking more at the risk managementbecause before we always have the risks.
(11:24):
But now is moreoverthe people wants to understand
what are the risks,what we are going to do.
So I attend some severalalso customer meetings.
They ask me directly what we are doing,what Hitachi Energy
is doing to preventsome kind of risky disruption, etc.
And the risks are there so geopoliticalrisk, the regulations, the transportation.
(11:45):
Also you can see a lot of new casesthat happens.
Based on that, as I said before, we needto have a strong strategy behind this.
Yeah.
Part of the strategy is onethat the supply relationship.
I think they are interconnected,each other.
The other one is to workmore closely with the hubs,
that is the factoriesto see the demand, the planning, etc.
(12:05):
but then we have to have a diversifyingsupplier base,
not 1 in 1 continent,but multiple continents.
So we need to proactivelylooking for solutions
and always have some kind of mitigationplan in hand.
This is really important. Okay. All right.
So cost efficiency and supply management;we all want to get the best quality
(12:28):
for the least amountthat we can pay for it.
I assume in your job,you'll also be facing that challenge.
How do you balance costefficiency and mitigating risk?
Yeah this is a delicate question.
Let's say
like that because every day everybody asksfor how they calibrate these,
how they balance the cost and the quality,the cost and the risk, etc..
So I think our normal life is like that.
(12:49):
When we go to the shopping,
we can see like a high-cost, high-quality,low-cost, low-quality.
But that's the reasonof the Hitachi Energy, because in
Hitachi Energy we say thatwe have the license to operate.
Yeah.
Safety, quality, integrity comes first.
We cannot compromise on this.
Then we can take this as a standard,as a license to operate.
(13:09):
Then we can move to the others.
So then, how we can apply this?
I think technology, today dataanalytics is really important for us.
One example that I can give you,we have a team for the should cost.
What should cost means?
Imagine one part of our product.
We send this part to our should cost team.
They have some kind of tools, softwares.
(13:32):
They can analyze the drawingsand see how should this piece could cost.
Let's saythat their supplier ask us for 100,
but they can put in the tool, etc.
and we can see the real pricecould be like seventh.
With that we have a real information
that we can go to the supplierand share this with the suppliers.
And they ask you to make some kindof balance because we want that quality,
(13:55):
that specification, but we need to fightfor the best competitive price.
In the beginningwas really hard to make this,
but now the acceptance of the suppliersis really great
because the supplier understandthat we are not going to commit
with their profit,but we need to balance on this,
say that, oh maybe we have more scrap,maybe your setup of the machine.
(14:16):
These also engagein the supplier relationship management
because as much as the supplier trust you,they understand what the final way
that you are going to achieve.
This is your own way.
You've gone quite proactively about itand you're trying to become resilient.
So you’re looking into future disruptionsand you're saying, okay, we've looked
into what this should cost,
what this should look like,and you've presented it to suppliers.
(14:39):
Do you find thatyou've been quite successful in that?
How long has that process been?
How long have you been tryingto educate our business partners
that this is a good way forward,that it’s in everyone's best interest?
More than five yearsI think so, or more than six years.
And it's hitting homenow? Yes, now more and more.
So I can see engagement because thiswe did more behind of the scenes,
let's say the people did thiskind of exercise and just signed.
(15:00):
But for the three years ago,we start to bring these people,
these analysts that we have andput together with the category managers,
that the people that go to negotiatewith the suppliers hand-in-hand.
They go together,they explain the suppliers,
what are the content of thiskind of new should cost?
And the supplier understand
that they need to change somethingin their production to be more efficient.
(15:20):
So it sounds very much like supplierrelationships, risk management,
it's all quite deeply intertwined.
How do you integrate these two?
If we look back into your first answerin terms of overall
supply chain strategy,how do you bring it all together?
I think totally, they integrate becauseone is a connection with the other.
When you have a risk management
team, one big actions is a supplierrelationship management.
(15:42):
When you have a supplier
relationship management,you need to have a risk management inside.
So one each other is interconnected.
So if you do oneyou have to do the other one.
Your job sounds tough.
And I thinkwe've got time for one last question.
I've been asking it to our guests.
If you wanted our audienceto have one takeaway, what would that be?
I think you mentionedit is a little bit complex, and today
(16:04):
we just talk more about supplyrelationship and risk management.
But in the supply chainwe have, as I mentioned before,
sustainability,technology, quality, a lot of things.
But I think the main pointthat we could end up with
some kind of takeaway, I think I'mgoing to come back with the McDonald's.
McDonald’s,they have a basics of the three Cs.
(16:27):
Okay.
Cooperation,coordination and communication.
All right.I think these are simple and efficient.
If you can apply this for everything,that it's going to be fun
and you can deliver what you promise.
Well it's been very interesting
to learn about supply managementand high voltage
and all the risks and challengesthat come with it.
Thank you very much for coming intoday, Salvatore.
Thank you very much.
(16:47):
And I hope you'll come back soonto tell us a little bit more
about all these other aspectsof your very interesting job.
Oh, it will be a pleasurefor me. Thank you. Thank you.
And that's it for today.
We'll be back soonwith some more great content.
But before you go,remember to give us a follow
so you don't miss an episode.
Thanks for tuning in. See you soon.
This episode was brought to you by HitachiEnergy.
Created, written and hosted by BárbaraFreitas-Daniels.
(17:10):
Content and scriptwriting by Cassandra Inay.
Guest speaker Salvatore Alimentato.
Produced and edited by Creative Chimps.
Popular Podcasts
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com
On Purpose with Jay Shetty
I’m Jay Shetty host of On Purpose the worlds #1 Mental Health podcast and I’m so grateful you found us. I started this podcast 5 years ago to invite you into conversations and workshops that are designed to help make you happier, healthier and more healed. I believe that when you (yes you) feel seen, heard and understood you’re able to deal with relationship struggles, work challenges and life’s ups and downs with more ease and grace. I interview experts, celebrities, thought leaders and athletes so that we can grow our mindset, build better habits and uncover a side of them we’ve never seen before. New episodes every Monday and Friday. Your support means the world to me and I don’t take it for granted — click the follow button and leave a review to help us spread the love with On Purpose. I can’t wait for you to listen to your first or 500th episode!