Infineon’s Birgit Fuchs: Standardisation, diversity and collaboration will be key for digital supply chain

Digital tools have aided the supply chain in mitigating the recent semiconductor shortage, recovering from the pandemic, and more recently dealing with unprecedented issues in shipping related to ongoing disruptions at the Suez Canal and Panama Canal. As a result, automotive logistics firms are increasingly looking towards digital technologies not only to firefight problems, but to predict and prevent them while improving long-term capacity planning and operations.

Collaboration and Diversity: Elevating the Digital Supply Chain Together

Infineon Technologies, a global semiconductor leader in power systems and technology solutions, is working to embed a digital supply chain across its end-to-end operations. Birgit Fuchs, vice-president of supply chain at the company believes that to achieve this vision, the industry needs to build a strong foundation through standardisation of processes, tools and data.

“One of the most important priorities in embedding a digital supply chain is to continue to standardise processes and tools and structure data,” she says. “This is needed to ensure that data can be easily shared and analysed across different systems and processes.”

Automation goes hand-in-hand with this data structure, as increased automation of processes can enable more data to be gathered and measured and adjustments to be made to ensure standardisation across the board.

“Standardisation and automation are critical capabilities that can enable companies to further grow and increase the speed of their supply chains,” Fuchs adds. “Standardisation of processes and adopting digital technologies can help companies to streamline their operations and reduce lead times, which is essential for an agile and responsive supply chain to meet customer needs.”

It can also help eliminate data siloes, which are among the biggest challenges in developing a digital supply chain.

Leveraging AI: Ensuring Future Resilience in automotive logistics supply chain

For a digital supply chain to be successful, every part of the supply chain needs to be involved and contributing to it. This means ensuring that each company in the automotive logistics industry, including n-tier suppliers who may be smaller, in far flung locations and with fewer digital connections to a tier-1 or OEM, have the knowledge and resources to use and share data and digital tools.

Fuchs says collaboration is “essential” for creating a responsive digital supply chain. “Partners need to foster collaboration, understand each other’s businesses and build strong relationships with their suppliers, customers and other stakeholders along the supply chain,” she said.

This collaboration can involve sharing data, insights and best practices, and providing visibility across the supply chain.

“This helps up to manage successful business cycles and to optimise manufacturing utilisation for every partner,” Fuchs adds.

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Collaboration will be particularly important in using digitalisation to achieve a more environmentally friendly digital supply chain. Companies have a greater impetus to work together to achieve a more sustainable industry, and with growing pressure and expectation to track Scope 3 emissions (which are not produced by the company itself, but by its whole supply chain), it’s more important than ever to collect and share data between supply chain partners. Fuchs says: “Additionally, companies can explore new technologies such as blockchain to enable transparency and sustainability throughout the supply chain.” 

At Infineon, Fuchs says sustainability includes social, ecological and economic values. “We meet global societal challenges such as climate protection, energy efficiency and resource management with innovative products and of course contribution from the supply chain side,” she says. “Infineon is already making a valuable contribution to climate protection today. However, we know we can do better. That’s why we as a company have set ourselves binding reduction targets since 2020 to be CO2-neutral by 2030.”

Diversity plays a key role in this, too. “Success arises out of different ideas that different people bring to the table,” says Fuchs. “An environment where everyone can thrive is good for everyone. People who are accepted at work and who have a sense of belonging are happier and feel more comfortable in engaging. This is exactly the type of atmosphere it takes to drive innovation and create a better future for everyone.”

A diverse workforce is also key to drive digitalisation in the supply chain by helping improve recruitment and retention in high-skilled roles.

Using AI to meet future challenges

The logistics sector continues to face worldwide interruptions including the after-effects of the Covid pandemic, natural disasters, and geopolitical issues. In recent months, the industry has been hit by the UAW strikes which lead to the temporary shutdown of plants, drought at the Panama Canal disrupting supply chains, and conflict in the Red Sea and Suez Canal causing logistics delays and leading to plants halting production and delaying finished vehicle deliveries. And more threats loom, as analytics firm Everstream recently predicted that rising tensions in Taiwan could lead to a further semiconductor shortage in the year ahead.

 To overcome these challenges, companies can implement resilience measures such as backup plans, alternative suppliers and the use of digital planning tools and artificial intelligence software to predict and mitigate disruptions.

“Companies can implement digital platforms and tools to enable real-time communication and collaboration between all stakeholders,” Fuchs says. “This can help to reduce lead times, improve inventory management, and increase visibility into the supply chain. AI can be used to simulate different scenarios and test different strategies. This can help logistics and supply chain managers make more informed decisions and prepare for unexpected events.”

AI will also enable more automation within the automotive logistics and semiconductor supply chain, including tracking inventory, monitoring shipments and predicting demand. It can also automate decisions such as selecting a carrier, optimising routes and scheduling deliveries, which can help firms make their operations smoother and reduce costs. Fuchs is keen to stress that implementing AI and automating parts of the supply chain does not mean that AI will replace human jobs. While AI can automate many tasks, there will always be a need for human intervention, particularly in such a fast-moving industry dealing with unexpected events.

She says: “We have a target to automate processes wherever possible, and this is getting more scalable. At the same time, we need human expertise and creativity to ensure correct rules are adhered to according to business cycles and to leverage emerging technologies.”

Of course, the implementation of AI can also bring challenges and concerns. The use of AI in the supply chain can cause changes to the processes, workflows and roles of employees, and often requires training and upskilling. “This can be challenging to adapt to technically, but also in terms of working life,” says Fuchs. “Not everyone may be able or want to follow the rapid pace of technological change in logistics ad supply chain management.”

To combat this, companies should focus on recruiting and retaining a more diverse workforce, Fuchs says. “With the rapid pace of technological change, it’s important for logistics and supply chain companies to upskill their existing workforce and secure new talent with the skills needed to take advantage of emerging technologies. This involves investing in training programs and providing opportunities for employees to learn new skills and stay up to date with the latest trends and innovations. Companies need to develop an attractive employer brand and hire talented individuals with the necessary skills and experience.”

Fuchs says it is also important to ensure that these skilled individual teams are embedded into projects, rather than sitting in a silo. In a recent Red Sofa Interview with Automotive Logistics, she said that over the past few years, Infineon has appointed a digital transformation officer and team. “It’s this end-to-end perspective coming top down,” she says. “If you look at our projects, we manage our production sites as a global virtual FAB and we connect it to our enterprise resource planning (ERP) systems, so it’s not managed as a silo, all functions are a part of it.”

This integration needs to be sustained after the roll-out too, and Fuchs says to do this you need a strong inbuilt team. “You really need experts who understand the technology, who ca deliver the KPIs, who can ensure the master data is there and who can run it,” she says. “This is how we really started to build sustainable teams which are cross-functioning. It takes a lot of effort to help these teams from a management perspective too, which is why digital leadership needs to be brought into organisations.”

Fuchs is keen to lead by example on this. Speaking about what her role means to her, she says: “It means to be an enabler for change and transformation, to help others to follow that direction and make our digital journey happen. I like to be part of this journey as I am convinced that we can make our growth happen by getting more scalable through digitalisation.”