Full Transcription

Alright, thank you. Excuse me. You got a microphone? Yeah. I'll apologize for my throat, but I was singing at Coachella last weekend and it was crazy. No kidding. But I am with Nokia and just thank you for being here. And then what's nice about being at this field services is that you're really meeting different people, different verticals, trying to solve similar problems. And I'll use a story to introduce what Nokia slash Infinera does. At lunch the other day I was talking with someone, he said what do you do at Infinera? And I said we use lasers to shoot data through fiber to make the internet work. And he goes, that's interesting. We use lasers to cut sheet metal to make cabinets for data centers, so same tool, a laser, but two terribly, both sides of the spectrum as far as how they're used. So what I hope to do here is just talk a bit about our journey as Infinera. We were purchased by Nokia 45 days ago. So just learning that world. I am based here in the Bay Area and I've got a global responsibility. We are in 70 plus countries, 300 plus cities with four hour delivery.

So what is it? We talked, a lot of people talked about the tariff models and how they're being created and the way I look at spares planning and logistics, it's that top thing. What does that mean to you? Science plus art equals customer satisfaction. That's how I kind of look at spares planning and logistics. The science part of it is getting all the data, is using AI, is understanding your customer commitments. The art, as a few people said in the other earlier panel, is taking that information and making the right business decisions. We are a profit center. Our goal every day is first CX, customer experience, second, drive margin, right? So we're a business, we've got to make sure we're doing all the right things. And later in the slide I'll talk to you about what that means. So that's my view of the world when people talk to me about it and when they're asking what do you do? Or you bring new people into the organization, you just tell them there's science and then there's art, but it's all about customer sat. And how do you do that? You lean in on planning, you manage your inventory, and then you define and develop repeatable processes, right? You wanna make sure that, again, 24 by 7, 365 in 70 plus countries, you don't wanna be on the other end of a call every day.

Those processes that you define, you have to lean into them and make sure they work. There's always 90, 95% of your transactions need to follow that path. Otherwise you'll never make money and you'll never be happy in the sense of you'll always be on phone calls or the one from sales or customers saying, you're causing me to have trouble. So any questions, feel free to ask or any interpretations you may have. Feel free to offer them up as we go through this. But that's to me, that's what spares planning logistics is really about. A whole lot of science to get the information then you are to make the right business decisions and just having processes to support all of it.

So what do we do in our planning world, right? Data capture analysis. I look at that. Again, part of the science part, we need to understand from our production people. They say, yeah, I shipped a thousand to Dublin, Ireland. We need to know where did those thousand go around the world? Did 10 of them go to 10 different countries? Do I already have existing import export compliance processes for those countries? Do I have the capability to get to places? We've got, I like, I call them all opportunities. We have an opportunity in Australia to get parts into the Outback in four hours. These are boxes with no people. An FLM person comes, or a field service person meets you somewhere and then goes to that box in the middle of the desert, fixes a part and comes home, right? 24 7, 365. So you've got to make sure you've got that data. You've got it. You work with your customers with it, you work with your sales team with it, your service peers, right? Because you wanna make sure they understand how you're planning, right? Because if you do it all on your own and you have a miss, they're gonna point fingers. If you have them as part of the process and part of the solution, then you're talking and you're dialoguing, right? 'Cause there's times where there just are not enough parts in the world.

Covid was a great period for that, right? Where everybody was trying to get parts and lead times. We had parts lead times go from two weeks to 62 weeks overnight. Boom. It was stuff like that, right? Because we were building a lot of different high tech things and chips and they just, the supply chain went crazy. One of the questions earlier, one of the conversations was about current install base information plus future activity. The future activity is where the science and the art come together. And how do I make my team work that information? They create relationships with sales. They create relationships with the professional services teams on new deployments. They create relationships with customers. I have a very, some people may think I'm crazy, but I put all of the information out with the customer too and say, here's my problem. Let's work together how to solve it, right? 'Cause I'm not gonna, there's not an orange tree in the backyard where I can go pick a part from, right? So we work together to say, if there is an allocation issue, we're best to put it. Where's your next big deployment? Where's your key customers at? How can we make sure that you are as successful as you can be? 'Cause we're not gonna be perfect.

We do manage all that. And it was a question earlier in there. Future activity is key, especially because you have to invest money into new parts. You may have to expand your locations, you may have to come up with ways to import and export. In my world, all the easy places are done. So now my sales team comes with me and says, Hey, we've got great news. We've got a project that's gonna go from Djibouti to Singapore to Africa, through the Middle East and end up in France. Do you have all that place, all those places covered? And then I go can you explain? And which part? How do you spell Djibouti? Great. So you have to really, again, make this collaborative. And when you do that, it makes the bad times much easier.

Tools, right? So we utilize tools to help get our install location information and translate that and cross reference to our depot locations. Draw our little two hour circle so that we can get a driver to bring it there, and then we look and say, okay, do I need another depot? Is one available? If you've all watched White Lotus season three, they're in these great places in Thailand. I just had an opportunity to go to about seven places in Thailand that are in the middle of jungle over large rocks and hills. And I've got to try to figure out how do I do that? So you have to partner right with your sales team, sometimes with the customer, and come up with a solution. And you were talking about consigning stock to the customer. Sometimes I have to do that because there's no way I can get from point A to point B in the time and that's a risk. My finance people hate it 'cause they have no control over it. They say, okay, you write that off. And then that's a current P&L hit that we don't like that. So we've got to work through that with our finance partners.

And then we have to maximize routing all the time. The US for me is, if we could do more in the US it'd be wonderful. I get all the good opportunities, like we're working in Mexico, so we've got to make sure that we've got enough coverage there because of different times where you're not allowed to drive overnight in certain regions. The internet still needs to go. The voice, video and telephones still need to work. So we just have those kind of challenges that we have to work through. And then what do we do? We create demand signals. We put reorder points in, we drive supply and we drive ARM activity. And that's all process, right? So as much as you can lean into making that as simple as possible, it makes all the other opportunities much easier.

So once you do all that, what is the key thing to me, right? You drive your process and then you make sure you have the right KPIs to measure what you're doing and then being able to tweak what you're doing to where you need to go next, or how you need to improve. So for every miss we have, we do an RCCA, and we find out what was the issue and we go to correct that issue. And we scorecard it, and we present that not only to our internal customers, but we share that with our external customers, right? They're paying me a large amount of money, hopefully, to run a service for them. They should understand where that service is and the value they're getting. Otherwise, the only time they'll know of me is when I miss, right? Which is always a great conversation. The internet was down for four hours in India and there was an election going on. Do you know how bad that is? It is just crazy. But if you have conversations with them all the time, it makes those things easier.

And then what is the impact of poor performance? Again, we're a P&L. Customers not renewing service contracts, revenue and margin down the drain, right? Everyone here wants to take that asset and sell it as many times as they can, right? And monetize it. Our finance people always come to me and say, so tell me what are your turns? I say, zero. What do you mean? How do you measure your inventory? Whether it's good. I said, by the dust on the box. 'Cause I hope I buy that box, put it in a depot 15 years and just keep making money on it. If I ship it out, that's a bad thing. But again they're used to forward production. And I called the Ford and nothing against it. It's just to me that's speed dating 'cause they always want to just get there as fast as possible. I'm into relationship long term because we get contracts with telcos; 15 years of service from the last time we sold it to them. We're servicing stuff that was built in 2008, 2009. You could have the renewal come, but there's additional discount that's just pure profit. Because my expenses don't go any different. They probably go up a little because I have to recover. Again, margin, and that's, we all live on margin. And then, or worst case, you have to pay liquidated damages or penalties. So your finance person has to write a check to a customer. Never a good thing. So that's why the KPIs matter, why the results matter, and why the whole process matters. Is to make sure that you're doing things you can be as predictable as possible. Because when the numbers are good and your CEO's not getting called, that's a wonderful thing for them and for us because they can work on new business, new other things instead of taking time to have to worry about a parts issue.

And what do we do? We use again, trying to make the science as robust as possible. We partner with Ascendo and we come up with not your ordinary type of things. We look at challenges we have and we work with them to say, Hey, this is a challenge we have. How can we come up with a tool to fix this? And sometimes it's not me in the spare parts because we're a service organization and all of our processes are knitted together. We are looking at it and saying, my repair field team says, Hey, I see this problem a lot. Let's create a tool so that we can identify when that problem's gonna happen, and create a proactive approach to solving the customer's needs, which might be instead of they're calling me because they have a failure or alarms product doesn't work, we're telling them, Hey, we know you have a maintenance window coming up next Sunday night. We suggest you put these two units, take them out and replace them with these two, and we'll have them there on Saturday. So your tech doesn't have to worry about, is the part gonna be there when I arrive? Because our techs, they also want to, especially if they're third parties, they want to churn. If the customer's doing their own maintenance and their own FLM, they want to get through that maintenance window as soon as possible. 'Cause what they're doing is they're taking traffic off of one cable and they're having to switch it to another. So they've got dead capacity, right? And they wanna sell as much capacity. Again, everyone wanna make their revenue and their margins.

And then just some thoughts that, what do I think about not only just the day-to-day stuff, but how do I work things in the future? So one of my biggest issues is driver availability. Before Lyft, before Uber, before Amazon, people are available. I don't have fleets. I don't wanna invest in fleets because I don't know where my outages are gonna be at any given time. My installed location base, there's just not enough volume there to say, hey, you should have your own service. So now, a lot of times that we miss because the person who would normally be on call at two o'clock on Saturday morning, they're now driving for Uber, taking somebody to the airport. It's a known gig. They know the money they're gonna make as opposed to, Hey, I might get a call. I might not get a call.

So I live in Mountain View, California. My daughter graduated college about 12, 14 years ago, and she would always tell me when she came back from the University of Oregon, she goes, I know I'm home when I see Tesla's, because this was before they were really everywhere, or driverless vehicles, 'cause we've had those in our neighborhood and since about 2008, you're driving next to something, hey, there's no driver or the driver's in the backseat, so it makes me think of the old there's a dog driving. So that's one of the things I'm putting out to our vendors, Hey, can we use Waymo in locations where they're available? Can we use drop boxes? Can we use other ways for the FLM to get our equipment? When we have a defective return, we're doing a failure analysis on all of them if they're still in production because we wanna prevent future failures. So we're trying to figure out, when we do the production of the unit, we're taking pictures of all different sizes and shapes on our return process. Can I repeat that? So that we can expedite the FA to see whether there is anything physical wrong with it? Did somebody break pins? Did they do something different? And then hopefully make that process easier. And then we can also monitor our, hey, this is what it looked like when it left the facility that we returned it to. Now this is when it got to the factory overseas. Did anything happen in shipment? Do I have to worry about talking to my freight forwarder, my parcel people to say, these aren't basketballs, please. There's a fragile please, a laser just being off a little bit, it's not gonna shoot the data the way you want it.

So that's my view of what's future. I've got a minute and a half left, so to get you to, I think, either the next person or a break. So if there's any questions, it's a bit of our journey and the things we think about and not only with, I was with Infinera, before that with a company called Harmonic, and before that there was Polycom, you may know from the little phones in the conference rooms and also high def television before Zoom came in. So we've been, this has been that journey and the fruit of all those years of trying to, again, it's a business. You've got to treat it like a business and you have to make money on it, and you should. Anybody have any questions in the minute that's left? Okay. Thanks to you for a great presentation. Thank you.