Apr 13, 2022

The Power of API in the Supply Chain Industry with Future Electronics’ Tom Galligani

“We started in the world of digital transformation with EDI many years ago. We built an amazing platform that allows our customers to trade information, such as purchase orders and forecasts. We’ve advanced that by not only being able to take traditional EDI types of formats but all formats, whether it’s Excel, CSV files. That allows us to automate our business processes.

Over the last few years, APIs have become one of the most important elements of the supply chain. It drives speed through our business, not only for Future but also for our customers. The API capability allows customers, whether they’re large or small, in North America, Europe, or EMEA, to be able to have access to information. That information allows them to make quick business decisions.-Tom Galligani, Global Vice President of Supply Chain, Future Electronics

Full transcript

Francis Adanza:

Welcome to the Down to Freight podcast, where we sit down with transportation, logistics, and supply chain subject matter experts to discuss digital transformation projects. I’m the host of the show, Francis Adanza, and it’s a pleasure to welcome Tom Galligani, Global Vice President of Supply Chain for Future Electronics. Tom, it’s great to have you. Can you please tell the listeners a little bit about yourself, your company and what you’re responsible for at Future?

Tom Galligani:

Sure. Thanks for having me. And before I get started, I just wanted to say I hope everybody is staying safe and healthy during this pandemic. I know it’s been a real challenge for many, and we’re hoping everybody is doing well.

So my responsibility at Future Electronics is to manage our global supply chain. We work with our customers around the globe to drive efficiencies through their supply chain and continuity of supply. I’ve been with Future now for about 24 years. But previously, I worked for Raytheon, ITT and Sierra Nevada Corporation out of Reno, Nevada before joining the Future Electronics team.

Francis Adanza:

Great. Well, thank you for providing a little bit about your background. For those that are not as familiar with Future Electronics, can you please provide an overview of your supply chain?

Tom Galligani:

Sure. So Future Electronics was started by Robert Miller in 1968, and he still leads our company today with more than 4,000 employees in offices around the globe. We’re able to service our customers wherever they’re manufacturing today and wherever they will be manufacturing tomorrow. We have one IT system that runs our entire business, interconnects all of our sales and distribution centers and that provides our customers with global visibility as well as transparency in our business.

Future Electronics has been built on our supply chain capabilities and I’d like to say that we sell confidence. And the reason I say that is that our customers depend on Future Electronics to stock inventory for them based on their forecast. Since we’re a privately held company, inventory is viewed as an asset, and we would provide our customers with a superior service by being able to strive for that 99.6% on-time delivery.

We couldn’t do that without having inventory on hand, because we understand as a distributor, there are two elements to our business. One is that our customers have a challenge forecasting. The other is that our suppliers have a challenge with increase in demand. So as a distributor, being able to hold inventory provides our customers with that security of supply.

Francis Adanza:

Fantastic. Thanks for that overview. That provides a lot of context. So as you know, we’re here to talk about technology. Is there a recent technology project or a current project that you’d like to share?

Tom Galligani:

Sure, there is. So over the years, I’ve read a lot about digital transformation. And I kind of look at our digital transformation as probably the last 25 years. We started in the world of digital transformation with EDI many, many years ago and have built an amazing platform that allows our customers to trade information, such as purchase orders and forecasts. And we’ve advanced that by not only being able to take traditional EDI types of formats but all formats, whether it’s Excel, CSV files and that allows us to automate our business processes.

Over the last few years, APIs have become one of the most important elements of supply chain, because it drives speed through our business, not only for future, but also for our customers. And so the API capability has allowed customers, whether they’re large or small, whether they’re in North America or Europe or EMEA, to be able to have access to information. And that information allows them to make quick business decisions.

Francis Adanza:

Thank you. This sounds like an interesting story. As we all know, APIs are important for data exchange. Specifically, what was the problem that you were trying to solve with this API initiative?

Tom Galligani:

So if you look at the digital transformation, as I said, EDI has been around for a very long time. It works, but it’s costly. It requires special resources, IT resources, to be able to map different data elements. APIs became an important aspect of our business as it did for the hotel industry. And when you look at the hotel industry, as you go and book your travel and you want to go to [inaudible 0:04:30] as an example and you go into one of the websites like Expedia, and you punch in there that you’re going to go to [inaudible 0:04:36], you want to be there on November 5, you’re going to be there for a week, and it gives you all the options that are currently available.

That technology is now available to use in the electronics industry. So the problem we’re solving is that traditionally, EDI has been for a larger, more sophisticated companies, again, because of the software required sophisticated resources to be able to do the data mapping whereas smaller companies didn’t have those resources and couldn’t afford it.

API is an affordable cost-effective solution that not only large customers can take advantage of, but also the small customers. And when you look at it from a competitive standpoint in our business, small contract manufacturers as an example, and these have been the early adapters into the use of APIs, can now compete with a larger customer or company that has more resources because the API simplifies the entire process.

Francis Adanza:

Got it. Thank you for sharing that. So nothing ever goes according to plan. As you rolled out the API initiative, was there anything you wish you would have done differently?

Tom Galligani:

That’s a great question. And I thought about that as we have gone through our process. And I’ll say this, every project, you can always do better. Whether it’s an IT project or a lean project. But the one thing that I think we did really well is, as we got involved and started to think about our API capability, and it’s going to proliferate to our entire business and our customers’ business, suppliers will all be interconnected through APIs eventually.

One of the things I think we did, and we have an amazing team that we’ve put together cross-functionally, we looked at all aspects of our business and how we could take advantage of this new technology, is we reached out to some of the subject matter experts. So on the supplier side and on the third-party solutions side, and we really took advantage of their knowledge. As a result of taking advantage of all these subject matter experts, it shortened up our learning curve and improved our success rate as we launched this new solution.

Francis Adanza:

That makes a lot of sense and a good approach to leveraging the resources within your network. Now that the solution is up and running, what was the impact on the business? How are you measuring the before and after?

Tom Galligani:

The impact on the business has been amazing. When you think about digital transformation and previously, there was a smaller group of companies or customers that were able to take advantage of the capability. The benefits of moving ahead with API is that it’s really expanded the number of customers who can take advantage of the new solution.

When you look back with EDI, as an example, there was a set number of customers who have that capability, as I said. With API, we’ve expanded from small to large, large to small customers, however you want to look at it. So the number of customers that we’re now able to connect with are significantly more.

The number of inventory searches from our customers to us has expanded tremendously. And when you look at it in this market condition that we’re in today where inventory is so constrained and lead times are very, very long, this is a solution that can shorten up the cycle time for a customer who’s looking for inventory and allow them to place orders at a very, very quick pace, shortening up the entire cycle time.

Francis Adanza:

Thank you for sharing that. It does sound like it’s made a dramatic difference in how you’re able to service your customers as well as streamline efficiencies throughout your organization. For those that are thinking about rolling out or taking on an API-based project, what are some words of wisdom that you would offer?

Tom Galligani:

So what I would tell you is, again, whether you’re going to create your API internally or you can take advantage of the solution providers that are out there, there’s a few of them that we’ve partnered up with, CalcuQuote, Orbweaver, Supplyframe are three that come to mind, all very, very good and can shorten up the cycle time to moving this project ahead at a very quick pace.

As we did, I also suggest take advantage of the knowledge in the industry, some of your customers, suppliers who are already using this technique. They’ve been through the process. They understand where the challenges can be, and they can help you. As we did, we didn’t know everything that we were going to be faced with, so we reached out to our partners on the supplier side, on the solution provider side, and they really shortened up our cycle time and learning curve to launch our project.

And I think that if you look at APIs right now, it’s all about search or availability of inventory. It’s going to move to purchase orders and what are acknowledgments and advanced ship notices. On the supplier side, as an example, we’re looking at freight from FedEx and UPS and some of our freight carriers, as an example, to be able to provide real-time information. And that’s the key element that I may not have mentioned early on.

We’re talking about real-time information updates rather than batching inventory, what you do in the EDI world. API is up to the moment. So if you were to punch in a part number right now, you would see what my inventory availability is at that given second. If you think about that and the importance of trying to get inventory in this current market, that’s a very, very powerful tool. And so being able to search and then place a purchase order right away and get that inventory shipped to you, this tool is going to solve a lot of problems for a lot of our customers.

Francis Adanza:

Got it. Earlier, you mentioned continuous improvement. What is next for this project and/or any other projects that you might have on the horizon?

Tom Galligani:

In the supply chain area, again, we look at APIs and we’re at a starting point. We don’t think that there is any areas in our business that this won’t touch and won’t improve our entire business, from information flow internally as well as externally. And the more we can connect with our suppliers and the more we can connect with our customers, the better we’ll be as a distributor. And so we look at continuously improving the inventory or the information flow cut. So we look at the benefits of improving the information flow between our suppliers and our customers that will drive the cycle time down and it drives cost down.

Again, if you look at EDI, requires a certain level of expertise. When you look at API, you can create one solution that you can connect with many of your suppliers, and that gives you scale. But more importantly is to see that, again, you don’t have to hire additional resources as your business grow.

From a continuous improvement standpoint, again, we look at APIs as important element of our business as it will continue to drive efficiencies through our business, but not only our business, but with our customers and our suppliers, being able to connect and share real-time information between the supplier, the distributor and the customer will drive efficiencies. And quite honestly, it will make customers more competitive in this global market. When you look at competing in a global market, it’s very important that you drive efficiencies through our business, and we see this a lot with our customers as we do ourselves.

Francis Adanza:

Well, Tom, thank you for sharing this API project. I think you offered some great use cases, lessons learned and practical advice that the audience can take into consideration for their API initiatives. It’s great having you on this episode.

Tom Galligani:

Thank you, Francis. I appreciate it, and I hope everybody is doing well. And as we continue through 2021, I know they were all challenged with the inventory constraints that we’re all faced with, but we’ll do our best to make sure that we service our customers as best we can.

Francis Adanza:

Awesome. Well, thank you very much. Take care.

Tom Galligani:

Have a great day.

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