Savings sans system shifts
The savings Celestica has realized from doing the same things, process-wise, in Thailand (say) as it does in Mexico are pretty significant.
These cost savings are vital in the narrow-margin EMS business. In this sector “you have to do rather well just to stay above water,” Kirk said, adding that the remarkable savings from Project One is a key reason why Celestica is above water. “Frankly the savings are quite material. They compare favourably to the biggest chunks of profit we currently have.”
But the real kicker is that nearly half of the savings (48 per cent) required no system changes whatsoever. “We discovered you don’t have to change the systems to get the savings. You can go ahead and change the process. You can do it today, and you can do it piecemeal.”
This is great news for the Celestica CIO, who says he has witnessed many long-term projects wander in the wilderness and eventually go bust after great gobs of cash had been spent on them.
Two birds with one slingshot
At Celestica Project One is probably half IT, but it’s not an IT project.
“You have the factory guys, the logistics guys, the sales guys [involved]…It’s got to be across the board. So we’ve sunk VPs from each of these areas into this project,” says Kirk.
The Celestica CIO has managed, “very successfully”, to slingshot IT off Project One. He said once senior management committed to the initiative, it automatically meant he had to redo IT. “It’s what I wanted to do anyway, what I had to do anyway.”
So instead of the gargantuan project burdening IT, it is actually offering IT the force of its budget, its authority, and project management resources.
Kirk cited and example of the synergy between Project One and the IT rebuild. “Here we are trying to improve the payable cycle, and at the same time we’re rebuilding IT around the needs of a company that’s multinational and needs simplified processes.”
Availability on steroids
Project One has some non-negotiables, and high-availability tops that list.
Kirk hired a few senior engineering professionals and essentially re-engineered the platform, discovering all kinds of great economic benefits as result. “Now we have a true high-availability platform. We actually pray for downtime so we can do maintenance and implement changes.”
Read: Part I – Celestica’s quest for consolidation, Part II – Town Halls turn skeptics into supporters, Part III – The sweet sound of standardization