Molex: Breaking down barriers in its supply chain network to achieve assurance of supply to improve customer service
See how Molex outsmarts unforeseen supply disruptions
When global electronics leader and innovator Molex outgrew a legacy supplier portal, it moved to the SAP Business Network Supply Chain Collaboration solution as part of its intelligent digital supply chain strategy. Now the company mitigates supply risks through intelligent collaboration, smooth digital connections between buyers and suppliers, and transparency into suppliers’ ability to commit to production plans.
| Industry | Region | Company Size |
| High tech | Lisle, Illinois | >38,000 employees |
suppliers successfully onboarded on SAP Business Network.
of business transacted on SAP Business Network in just 18 months.
of orders now confirmed, improving supply assurance.
Director, Supply Chain, Molex
Achieving assurance of supply in a complex supply chain
Molex is a global electronics leader committed to making the world a better, more-connected place. For more than 80 years, the company has delivered connectivity at scale, building a reputation for high-quality components, proven engineering expertise, and collaborative customer relationships that span industries. With a presence in 38 countries, its innovative connectivity solutions are found in high-tech products across major industry sectors, including automotive, data centers, industrial automation, healthcare, 5G, the cloud, and consumer devices.
Molex is committed to product quality, reliability, and manufacturing excellence. Every year, it buys more than 70,000 parts and components as diverse as resin, metal, and electronics from suppliers all over the world. Therefore, an extensive, interconnected, and collaborative network of supply chain and logistics leaders, vetted suppliers, and proven technology is critical to its success. The interconnectivity and collaboration are built on SAP Business Network, enabling the company to build products more efficiently and with superior consistency across business units and manufacturing methods.
When the company began to outgrow its legacy supplier portal, Molex seized the opportunity to digitalize supplier transactions and interactions as part of its multiyear digital transformation journey.
Director, Supply Chain, Molex
Getting visibility into supplier commitments and critical inventory levels
To bring its digital supplier strategy to life with more timely and accurate information about the status of purchase orders (POs), inventory, quality defects, and invoices, Molex adopted the SAP Business Network Supply Chain Collaboration solution. This foundational technology streamlines connecting buyers and suppliers and automates and standardizes processes, bringing intelligent collaboration to the company’s global supplier community.
With digital connections between buyers and suppliers through SAP Business Network Supply Chain Collaboration, Molex can shore up assurance of supply with quantity and delivery schedule confirmations from suppliers for the necessary parts and components. These confirmations signal that the parts will be available when needed to fulfill Molex’s commitments to its customers. This information, in turn, facilitates accurate “clear to build” directives, giving operations and customer service departments the go-ahead to move forward with production timelines to meet end-customer commitments. This also allows the team to move quickly and decisively in mitigating business risks when confronted with unplanned supply chain disruptions.
To unite project stakeholders, Molex established KPIs and created a steering committee comprising supply chain leaders from across the organization. With visionary leadership and strong support from Molex’s chief supply chain officer, along with others across the organization, powerful project momentum was enabled and maintained.
Molex selected Asia as its first geographic area for the rollout, as a significant amount of the company’s supply chain is embedded in the region. Then it separated deliverables into workstreams, starting with discrete POs, consignments, stock, and subcontracting. Tony Gainsford, director of supply chain at Molex, recalls, “We were laser focused on onboarding suppliers and brought an agile, interactive approach to learning that respects the modern learner. Instead of creating reams of training materials, we generated short, native-language videos as part of the curriculum for buyers and suppliers.” Molex also created a digital scorecard to quickly identify and resolve potential problems and acceptance barriers.
Director, Supply Chain, Molex
Decisively mitigating business risk by strengthening assurance of supply
Within 18 months of deployment, Molex had onboarded more than 900 suppliers and transacted more than US$1 billion of business on SAP Business Network. Now suppliers can easily tap into a wide array of connection approaches. Lower-volume supplies can access its portal and use Microsoft Excel download and upload options, while large-volume B2B suppliers benefit from B2B connections to access vital demand, inventory, and quality information.
Prior to adopting SAP Business Network Supply Chain Collaboration, Molex processed most of these business transactions manually. It would take a buyer three minutes to prepare just one PO and send it out to the supplier. Likewise, buyers would spend eight or nine hours every week processing confirmations on behalf of suppliers in the company’s business systems. Given the scale of Molex’s operations, this was a significant time burden for the company’s buyers.
Gainsford comments, “Now, with SAP Business Network Supply Chain Collaboration, once our buyers finalize a PO, they hit “Save” and it’s with the supplier automatically. Likewise, the need to process confirmations has been eliminated on our side. Suppliers now take ownership of confirmations through SAP Business Network.”
“In fact, almost 90% of all POs at Molex are now confirmed through the system. This is a big improvement over our legacy portal, which had a 30% confirmation rate and required lots of manual steps.”
Another major bonus for Molex is the 33% improved average turnaround time for Molex to receive supplier confirmations, and the number of PO confirmation changes has also been dramatically reduced.
On a practical level, this means that the company is now in a strong position to fulfill its commitments to customers because it knows its supply will arrive on time, so it can make the goods and ship them to customers according to the promised schedule.
Throughout the project, Molex worked closely with members of the team from SAP Business Network to continually look for ways to fine-tune interactions with suppliers to keep elevating user experiences. One important feature that came out of this collaboration was the PO reconfirmation process. Molex had recurring situations where material requirements were either pushed out or canceled based on fluctuating demand or shifting production timelines. By solving this challenge with the reconfirmation process, Molex has the advantage of greater order accuracy and supply continuity despite ongoing changes.
What’s more, to gauge supplier satisfaction, Molex conducted an extensive survey and received highly positive feedback from suppliers on the modern user experience.
Director, Supply Chain, Molex
Confidently managing future supply chain disruption and volatility
In considering Molex’s future plans, Gainsford first reflects on the implementation of SAP Business Network Supply Chain Collaboration, saying that the project has been a great success, exceeding initial expectations and demonstrating deep collaboration between many stakeholders. He then adds, “I think the future is about driving adoption. We’ve got to make sure that our parts are here on time to fulfill our customer commitments. It’s one thing to get suppliers enabled. But you have to get the suppliers to use the platform and the application in the way you want them to use it. So, we’ve retained an expert from SAP Business Network to help us master the solution and drive adoption.”
Looking to realize additional business benefits from SAP Business Network, Molex recently completed a pilot on scheduling agreements. It is also exploring the addition of multitier POs, return POs, and supply forecasting capabilities across its contract manufacturers and upstream suppliers. In addition, Molex wants to address planning collaboration to address longer-term requirements, such as beyond the typical eight-week horizon of POs. These additional enhancements are part of the company’s road map to further automate, standardize, and consolidate key supply chain activities around the world.