Prescient planning for a 5G world sheltered Inseego from some of the pandemic’s toughest business challenges. Here’s how they did it.
For over 25 years, Inseego Corp. (Nasdaq: INSG) has been broadening the limits of wireless technology, providing superior wireless connectivity for global service providers, enterprises, and government entities. Their preparation for worldwide communication powered by 5G technology proved to be invaluable during the pandemic, shielding them from the massive disruptions and revenue dives suffered by other tech companies. Not only did savvy supply chain strategies keep the company thriving during the worst of times, but they’ve also resulted in significant business improvements that will stand the test of time as it continues to grow.
Inseego provides enterprise-grade 5G solutions for the WWAN (wireless wide area network) and enterprise networking space. Developed and designed in the U.S., as is all Inseego’s critical IP, their cloud-managed WWAN portfolio of products are comprised of fixed wireless access and mobile broadband solutions which enable 5G applications, including private networks, industrial IoT (Internet of Things), and mobile edge computing. Additionally, Inseego's solutions support next-generation security protocols and advanced network segmentation for secure and reliable operations. Their 5G SD EDGE cloud solution for enterprise networking integrates enterprise IT functions to secure, automate, and orchestrate distributed networks. With a long history of wireless innovation, the company currently offers the industry’s broadest portfolio of 5G solutions that are optimized to deliver instant, secure, robust, and reliable connectivity for even the most challenging mission critical applications and environments.
From Inseego’s founding in 1996 to 2020, the electronics supply chain was largely stable. For the most part, vendors were plentiful and lead times and pricing were highly predictable and competitive, with room for some typical fluctuations in obtaining components for electronic devices.
When the pandemic hit, the massive increase in demand for electronic components and electronic products collided with lockdowns in China, creating unprecedented supply chain disruptions. Over a handful of weeks, semiconductor lead times shifted from a historically stable 16 to 20 weeks to 20, 25, and 30 weeks, and in many cases eclipsing 50 weeks.
When Doug Kahn came onboard in 2019 as EVP of operations and customer success, he took a hard look at Inseego’s structure in terms of the supply chain as well as the organization as a whole in anticipation of the global introduction of 5G. “There was a strong willingness across the entire organization for me to come in and make some changes that were going to improve the performance of the supply chain and it was very, very visible,” he said. “Culturally within Inseego, there’s a lot of support for change in general,” he added, noting that the San Diego-based company has a Silicon Valley mindset, very change-driven, high-performance oriented with high expectations.
Shortly before his arrival, the company changed contract manufacturers from a small China-based mom & pop to a Tier 1 CM, which, in his estimation, was a brilliant move. Tier 1 CMs, in addition to deep engineering and manufacturing support, resources, and systems, have strong leverage over the supply base, and Inseego had engaged one of the best: Foxconn. It’s no secret Foxconn has more buying power in electronics than anybody on the planet. They also added a second Tier 1 contractor, IAC. Both CMs are Taiwan-based to avoid the tariffs and trade instability that had begun to develop between the U.S. and China.
“I always like to have two Tier 1 contract manufacturers not only because of the quality and stability they offer, but because they compete with each other in some ways,” Kahn explained. When a single manufacturer provides a quote, the customer has little negotiating leverage. “If you have two credible Tier 1s, you have pricing competition, so you’re getting the best of all worlds when you structure this way.”
Another of the 30-year electronics supply chain veteran’s early moves was to rethink Inseego’s single-source supplier approach. His procurement team worked with the engineering team to find and qualify second and third sources for all the components and parts where possible.
“The third thing we did is something that I’ve felt strongly about throughout my career in supply chain and procurement, which is to establish very deep relationships, long-term relationships with our key suppliers,” he revealed. “We have connections up and down the entire organization for our key suppliers. Either myself, my head of procurement or our CEO can pick up the phone and call any of our key suppliers and talk to their CEO or other senior execs.”
Nearly every day from the minute he arrived at Inseego, Kahn received calls from Inseego sales reps asking for updates on order delivery status. Kahn soon realized that an essential aspect of supply chain management was completely absent at Inseego. “We didn’t measure anything, so we established a suite of industry-standard KPIs to gauge performance,” he said. Once in place, he discovered that delivery time performance was roughly 17%. With KPIs in place and numerous other process improvements within supply chain and procurement, the on-time delivery performance leveled off and has remained consistently at nearly 100%. The pandemic temporarily nudged those numbers down to about 70%, still a far cry from their dismal past performance.
“I don't ever want a salesperson to worry about supply chain,” he stressed. “I want them to focus on selling and trust that we'll deliver the goods on time as promised. And we needed to have the track record to support that.”
When the pandemic hit, Inseego was suddenly faced with exploding demand for their products that enable connectivity to support work-from-home, remote learning and remote health care among other use cases. The strong infrastructure built by Kahn and his teams during 2019 enabled Inseego to quickly scale their business and deal promptly and effectively with supply chain issues, in contrast to many suppliers in the space. “Very quickly we saw from all of our customers that the demand was monumental and changing day by day and minute by minute,” he said.
Their traditional monthly sales and operations planning process, in which expectations, goals, and schedules for build plans were aligned between Operations, Sales, and Finance, became weekly to keep pace with rapidly changing demand. By matching supply and demand, sales knew exactly what they could commit to their customers. “There was never any misalignment between what our customers expected and what we could deliver.”
Running parallel to the company’s efforts to prepare for an onslaught of 5G business was a complete overhaul of Inseego’s legacy systems that continued apace during the pandemic. “We completely ripped out all the unsupported legacy systems which, in some cases, were homegrown, and replaced them with NetSuite, Salesforce, and Microsoft Dynamics to meet industry standards for ERP and CRM,” he said.
“If you look at how we responded over the course of 2020 and into 2021, Inseego was the only OEM that was able to fulfill the spike in demand in our space,” Kahn noted. “There was no miscommunication with sales or customers in terms of what product would be delivered and when.” At Inseego, foresight and visionary leadership pushes the boundaries of performance with enviable results under any conditions. That’s a powerful competitive advantage as they make the world ready for the enormous changes promised by 5G technology.
Inseego Corp. (Nasdaq: INSG) is an industry pioneer in smart device-to-cloud solutions that extend the 5G network edge, enabling broader 5G coverage, multi-gigabit data speeds, low latency and strong security to deliver highly reliable internet access. Our innovative mobile broadband and fixed wireless access (FWA) solutions incorporate the most advanced technologies (including 5G, 4G LTE, Wi-Fi 6 and others) into a wide range of products that provide robust connectivity indoors, outdoors and in the harshest industrial environments. Designed and developed in the USA, Inseego products and SaaS solutions build on the company’s patented technologies to provide the highest quality 4G and 5G connectivity for service providers, enterprises, and government entities worldwide. www.inseego.com
9710 Scranton Rd.
San Diego, CA 92121
Phone Number: 800-683-4818
Homepage Link: https://inseego.com