Flextronics Details Global Expansion Strategy at European Supply Chain Convention

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Flextronics Vice President of Global Procurement George O'Kelley delivered a second-day keynote here at the European Supply Chain Conveniton, <?xml:namespace prefix = st1 /><?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />Cologne, Germany<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

O'Kelley offered a look inside his company's decision to manufacture in India, where they are opening a facility in Chennai this November, and in the Ukraine. Using these sites as examples of Flextronics' global manufacturing strategy, he said the company evaluates labor variables, market potential, location, and materials procurement.

When deciding where to add manufacturing infrastructure, Flextronics' largest concern, O'Kelley said, is materials supply and pricing. "Some of the challenges we've found in the Ukraine are finding material that's RoHS compliant.... [We've found the] same thing in India....We will have to bring material in from outside India to meet RoHS compliance." He also went on to say, "Material must come from local sources to create the right competitiveness."

Another operational principle for Flextronics is using local talent in whatever region it decides to expand in. O'Kelley asserted that Flextronics doesn't fill its sites "with a lot of ex-pats." He used the Ukrainian and Indian plants as examples, saying that his company found talent in both the Ukraine and India to be readily available and highly qualified."

As in his Day 1 presentation, O'Kelley underscored his company's strategy of global expansion by region; Flextronics will not pour all its resources into any one region of the world. "One of the key advantages Flextronics has over our top competitor, Foxconn, is our global footprint," he said.

Flextronics, according to O'Kelley, will continue to expand. "We have a small group of people traveling all over the world looking for those emerging markets." He even suggested Africa could be a potential manufacturing center for his company, saying "There's a whole untapped continent that a lot of people avoid today. That's Africa, and that might be a place we grow in the future."

And what does O'Kelley think of industry rumblings of a potential 2007 slowdown? "There are absolutely no worries in the EMS industry that we don't have a market to grow into," O'Kelley asserted. 



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