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From natural disasters like hurricanes and earthquakes to pandemics, cyberattacks, and labor strikes, companies have to navigate so many complexities to get goods where they need to go.
What's their secret weapon to operating within the unknown?
It’s the people.
Welcome to Supply Chain Champions, the show that showcases the stories of those who keep supply chains running smoothly. We're here to highlight their untold stories and share lessons they’ve learned along the way.
Join us as we peel back the curtain on the people who make supply chains work and enhance your own career in the process.
Tune in. Get smart. Move forward.
Jackie Sturm [00:00:00]:
You don't have revenue if your supply chain hasn't adequately prepared itself to meet the expected requirements of your customers, as well as prepared itself for the unanticipated events that can undermine your ability to deliver. All of this has to be in place to support revenue. Supply chain is everywhere. The money is. And so we have a role to ensure that cash is king and we are ready to deliver it.
Eric Fullerton [00:00:33]:
Welcome to Supply Chain Champions, the show brought to you by project44, where we're talking to the people who make supply chains work. Hello, and welcome to Supply Chain Champions. I am your host, Eric Fullerton, and I am joined today by a true supply chain industry legend with the trophy cabinet to prove it, Jackie Sturm. She's the Corporate Vice President of Global Supply Chain Operations at Intel. Jackie, thank you so much for being here.
Jackie Sturm [00:01:07]:
Well, I'm delighted to be here. Thank you, Eric.
Eric Fullerton [00:01:10]:
So I wanted to start by talking a little bit about your career and the scope of your career and how you've seen supply chains change and evolve. So for those who don't know, you spent 32 years at Intel, an incredible career, you've seen a lot of things. So I wanted to kind of start in a general perspective, but in your time, how is supply chain changed and evolved and advanced, and are there also ways that it stayed the same?
Jackie Sturm [00:01:43]:
When I think about the supply chain of yesteryear, one of the things that is clear to me is that we lived in a simpler time. I reflect back 32 years ago and the world was just simpler. The trade restrictions, the other challenges that we see globally today, including climate, they just were not as complex. So as a result, I think the supply chains operated in a somewhat static fashion. The work tended to be more tactical. People were chasing data with limited time to analyze it before acting. And, you know, you had more rudimentary planning. And I think the supply chains had a relatively more narrow purview of responsibility.
Jackie Sturm [00:02:34]:
But today I see the profession as extremely sophisticated and nuanced. And most major supply chains are responsible for a much broader brief. And that I would include things like government engagement, where they have a major responsibility, regulatory adherence, where they have to respond almost instantly to changes in trade or other traceability restrictions, et cetera, et cetera. So many things are the responsibility of supply chains today. And the teams are facing really volatile world conditions, and they're doing so by leveraging predictive analytics and a very tech-savvy set of teams. The teams of the past maybe did not have the data analysis or some of the analytical skills that we expect out of our teams today. But at the same time, relative to how it stayed the same, the supply chain profession has remained deeply committed to its main mission. And that mission is to deliver on time and as expected, to customers.
Jackie Sturm [00:03:41]:
So although the methods have evolved, I'd say the mission is as strong as ever, and supply chains continue to exceed expectations in meeting customer needs.
Eric Fullerton [00:03:53]:
As much technology and tech advancement as we've seen, new tools, new solutions, all these things. Like, at its core, in many ways, it's still a people business with the same or very, very similar mission to what it's always been. So I think that's a great point. I wanted to ask a little bit about your career and I wanted to ask, when you look back, if there were some pivotal moments that have occurred that you can kind of look at and say that was really essential in being who you are today and the success that you've had in your role.
Jackie Sturm [00:04:33]:
Looking back, I think that most of the research says that at least historically, supply chain leaders didn't start out in the supply chain. You know, they might have backgrounds in engineering or operations or finance, and then they sort of come into supply chain, metaphorically, through the back door. And the same was really true for me. My background and most of my career were spent in finance, but the supply chain was always one of the areas that was under my financial management. And truthfully, I never considered leaving finance, and I really valued it as a career and it has been a great foundation for me. But one day, working at Intel, the CEO and the chairman came to me and said, Jackie, we'd like you to run our material supply chain and make it more strategic. And they added this little sweetener that they knew I was a finance girl, and they said, you know, cash is king there as well. And even though I hadn't been contemplating a move, I think we all know that when the chairman and the CEO suggest a new opportunity, the only reasonable answer is yes, right? So I joined the supply chain and it was a great decision.
Jackie Sturm [00:05:44]:
But there were some key moments that really helped define my approach. You know, some of the pivotal lessons that I was lucky enough to experience is over my 40 year career, I've done what I call the tour of Silicon Valley. And in that, I had the opportunity to learn from multiple industry icons. And I started my career at Hewlett-Packard. And seeing how the founders operated to, you know, ensure predictable, strong business operations helped me understand the need to create customer loyalty. And then when I left that traditional safety of HP to join a startup, one of the first fabless design companies, I really internalized that point about cash is king. You know, that's true whether you're in a fledgling business or an established Fortune 50 giant.
Jackie Sturm [00:06:43]:
So making sure that I'm always playing my part to ensure the best cash position for the company has allowed the places that I've worked to have a cushion when bad times hit, as they inevitably do in business. And then in my seven years at Apple, I learned how powerful it was to have a clear mission focused on how you create value for your customers. And after nearly 32 years of ups and downs at Intel, I've had a chance to see firsthand that risk is everywhere and that companies who can execute through times of crisis, they're able to come out stronger in the long term. And all of these have served me and our shareholders well over the decades. But more specifically, I often hearken back to some of the great leadership lessons that some of my mentors have shared with me. One of the first is really understanding what problem are you trying to solve? And a corollary, who do you need to help you? I consider these almost all-purpose mental prompts when I'm facing challenges. So that context has always been part of my overall approach. Although I've been the leader of my supply chain organization since I came to it sort of later in my career, only about the past 15 years, many of my staff and my more senior team members have outstripped me in specific supply chain experience. So, you know, one important example was after the 9.0 Japan earthquake that happened a little over a decade ago.
Jackie Sturm [00:08:05]:
And we just couldn't get certain key items. And the qualification period for alternatives to some of our most critical materials was sometimes greater than a year if we could get engineering to work on it. As I said, I'd only been in the supply chain a relatively short time by then. So this triggered an intense crash course in the details, the options, the trade-offs, and some of the immovable obstacles that the teams faced. And although it was a terrible circumstance, I loved the immersion in really understanding the depths of our ecosystem. And at the same time, my team was trying to drive these ideas, but they couldn't get support from other groups who didn't feel the same urgency to address the issues. So I took that advice. What problem are you trying to solve? And I realized that the one I could most personally help was to enlist the broader organization to solve our collective problem.
Jackie Sturm [00:09:06]:
You know, I think we all know that a key part of leadership is to remove obstacles that get in the way of team success. So I focused on rallying the senior leaders of all the key organizations, educating them on the most pressing needs. And I asked for their help to creatively identify and then work on the actions to make those options successful. I also leveraged visibility by creating this high-visibility task force that the CEO was observing. And I led it daily until the situation started to stabilize. And that helped people feel like, you know, it was important to the company and the outcome was very successful. And so, you know, working with my team, listening to them to understand their ideas from their professional expertise, acting as a leader to remove obstacles for them, and immersing myself more in the data of how our supply chain actually work, you know, I would consider that a pretty critical space. That was a pivot point for me.
Eric Fullerton [00:10:15]:
So when you think about cash is king in supply chain, what is that? What does that mean?
Jackie Sturm [00:10:21]:
It means a number of things. As supply chains are everywhere, you know, we are pretty much everywhere. The money is trying to ensure that the business operates. And so when I think about it, I like to think about it from the standpoint of the P&L and the balance sheet, and from the P&L standpoint, you don't have revenue. If your supply chain hasn't adequately prepared itself to meet the expected requirements of your customers as well as prepared itself for the unanticipated events that can undermine your ability to deliver. So the ability to deliver revenue comes from providing the support that your customers need, kind of come hell or high water, because both of those things are going to happen when you least expect it. So supporting revenue, making sure that that is going to happen on time and it's going to be as expected and it's going to be predictable so that customers can trust you. That is a critical cash is king element for supply chain. Whether you're involved in logistics, whether you're involved in planning and understanding the nuances of potential seasonal or business shifts, whether you're involved in procurement, whether you're involved in the back office, all of this has to be in place to support revenue.
Jackie Sturm [00:11:45]:
Then I look at it from the standpoint of the profitability. What does the cost structure look like? Are we delivering all of our products on air shipment because we want to deliver to customers, but we're a little behind because we didn't have all of our operations running seamlessly? That's going to be very costly. How do I make sure that I'm delivering to customers in the most cost-effective way as well as timely? Then from a procurement standpoint, how are we making sure that the competitiveness of our cost structure is allowing us to create that cash cushion that will support us? Then if I look at the balance sheet, you know, as a company that runs factories around the world, we have a very big capital budget. And in order to ensure that we can meet customer needs, which will have peaks and valleys, we need to understand how to optimize our capital investment by, you know, understanding the engineering requirements, the business requirements, the seasonality of our business. Supply chains can help by figuring out how do we get to the optimum amount of capital investment or working capital that are required in inventory to be ready for those shifts. So I say, as I go back to my point, supply chain is everywhere, the money is. And so we have a role in almost all those aspects to ensure that cash is king and we are ready to deliver it.
Eric Fullerton [00:13:26]:
You said this today, and I think you've probably said it many times, but risk is everywhere. And there are many methods to managing and trying to mitigate risk. One of them is around supplier diversification. And I know that there are some initiatives going on today in light of some geopolitical risk that is occurring, and even it seems more common or more frequent than one would expect, makes it very difficult to deal with. So supply chain resilience is key. Supplier diversification is a part of that. How do you think about that process as it relates to the broader goals of you and your team?
Jackie Sturm [00:14:10]:
When I think about risk, I like to understand it from the standpoint of probability and exposure. Could this thing happen? If it were to happen, what is the impact on my business? So if something has a 1% probability but an amazing impact on my business, I have to prepare for it differently then I would prepare for something that has a 10% probability but a low impact. One of the efforts that we try to do is of course to follow all the traditional multi-sourcing supply chain principles. But beyond that, we take all of our major commodities and all of our suppliers and develop a risk register. And that register would look at multiple vectors that we assess the probability for and the Exposure from. And those things might look at geographic concentration, they might look at geopolitical risk in that environment, they might look at climate challenges. Are they on the ring of fire? Meaning are they subject to earthquake, tsunami, other kinds of volcanic issues? Are they chemically concentrated, in which case they might be subject to certain regulatory regimes? Are they a human rights potential concern? Are they something where there could be a scarce physical resource? Are the multisources physically close? You know, one thing that we found when the Russian and Ukrainian issues arose was that, you know, neon and palladium are coming largely from Russia, but we were multi sourced. And you know, what we found was the multisource being in Ukraine was not adequate.
Jackie Sturm [00:15:54]:
Fortunately, we had other multi-sourcing. But you know, when you look at physical proximity of your alternatives, they may be subject to many of the same issues that I've described, whether it's natural disaster, geopolitical issues, transportation concerns. All of those things need to be understood. So I think if you are going to adequately mitigate risk for your company, you need to think very big. You need to say, you know, if something were to occur to my supply chain, what alternatives do I have in place? And you start by rationalizing what are the challenges that could face your supply chain. And then you develop your working playbook that says, okay, say you're doing a paper flow, you know, you'll do a risk assessment. And we would do drills where we would have an unanticipated risk show up with our emergency team. They would conduct this paper study with us, and then we would all work on, you know, these are the actions that we have in place and how did they work? Were they effective? What were the gaps? We've also had the situation where a lot of those drills are live, unfortunately.
Jackie Sturm [00:17:10]:
And there's always an issue in the supply chain, whether it's a fire at a supplier or an issue with a route or a change in the chemical formulation or quality issue. You know, there's always something and they're not always, you know, Covid or a tsunami. They're the small things that say, your supplier is bankrupt. Am I ready to deal with it? So we would conduct those live drills after the issue was resolved. We'd conduct an after action review and say, what did work? What should we do? More of what didn't work? How would we do that differently? So you're constantly refining, but the biggest thing is that you're thinking about it in advance. You've developed a muscle memory for your team that says, you know, we will keep working. Failure is not an option. You also collaborate with your peers to make sure that you're learning from them.
Eric Fullerton [00:18:02]:
Yeah, I think it's a great point. You actually, it reminded me of another guest we've actually had on the podcast and he runs the Belt Railway in Chicago. He said you have to break your plan on paper. Right. Because when you can break your plan on paper, when the actual live thing happens, you're much more prepared. And it's funny, the commonalities, even different parts of the industry, different focus points, there's these common threads that come through all of this.
Jackie Sturm [00:19:50]:
You have to be ready to be disrupted and you have to be comfortable responding to disruption. And I think that's what breaking your paper plan does for you.
Eric Fullerton [00:18:43]:
Yeah, exactly. So on the topic of suppliers, I wanted to bring up another topic and I kind of wanted to flash back a little bit to 2015. And there was a CEO of Intel at the time announced a goal of spending a billion dollars with diverse suppliers. And you were spending, I think, just a very small fraction of it at that time. In many ways, this is put on your and your team's plate and I'll spoil it for our listeners, but the plan was to do that in five years. So the business exceeded that 1.2 billion of spending with women and minority-owned suppliers by 2020. And then of course, as it so often is, the goalposts were, I don't know if I want to say moved, but certainly extended. And then it was, we need to double that in 10 years.
Eric Fullerton [00:19:38]:
So 2 billion by 2030 and you hit that goal about eight years early. I've done some research on this and I was really curious because you talked a lot about the importance of having a playbook to do that and then the focus on being able to make those decisions based on merit as well. So I was hoping you could talk to us a little bit about that.
Jackie Sturm [00:20:01]:
It's important to understand that a supplier diversity program is one way of bringing innovative new suppliers into your ecosystem. It is true. In 2015, we were essentially at a standing start from a diverse supplier spending level. And the CEO stepped up in public and said, in five years time we will spend a billion dollars. Well, we did it in four years time because of the playbook I'll talk about. So that was 2019, when we hit the billion. In 2022, we hit 2.2 billion. That was slated for 2030.
Jackie Sturm [00:20:38]:
It stemmed from quite a number of activities first of all, we needed to scan the environment to see who were diverse suppliers. And we wanted to make sure that they were qualified to meet the government parameters of what constitutes a diverse supplier. What we found is there were many who were diverse, but they hadn't gone through the registration process. So it's a little more difficult to confirm that they are woman-owned or underrepresented, minority-owned. And so we identified those suppliers and we talked to them and said, you know, we'll help you get registered, just work with us. And we did a white glove service to help people fill out the forms, do the government registration. At the same time, those who were already registered, we worked with them to understand, okay, what do you do? We don't want to simply do marketing or somebody who is going to make business cards for us.
Jackie Sturm [00:21:36]:
We want them to span our overall supply base. And so we started looking for who were the great construction companies, who were those companies that could really provide tremendous IT support, which were the logistics or warehousing companies that could provide those capabilities. And then we facilitated the bids. We told our teams that we wanted at least one diverse supplier in every one of their bids. And we would measure them, of course, against the standard of excellence that we required for all of our suppliers. But in the cases where they didn't meet the expectation, we'd go back with them and coach them, give them much more insight on what it would have taken for them to get to that next level. And then we continue that coaching and mentoring. And for those who did make it, we applied our normal supplier support supplier scorecard process to measure their performance consistent with all of our suppliers.
Jackie Sturm [00:22:36]:
Because, you know, we think it's important to give opportunity to new players. And we found that those new players are also quite hungry to show what they can do. But we need to measure it. We need to make sure that this isn't just charity. We're a business for profit. And so after a five-year period of measuring diverse suppliers and their category competitors, the results tell a really great story. 80% of our diverse supplier scorecards are outperforming their category competitors. And the remaining 20% were performing essentially at par. You know, I think it's wonderful to provide opportunities to underserved communities, but I mentioned that cash is king and, you know, making sure that those suppliers can support our critical business initiatives in the most competitive fashion has also yielded great results that has enabled new suppliers to thrive, to create new competition for others in their category and deliver better results for our shareholders.
Jackie Sturm [00:23:42]:
Many success stories, and I'd love to go into them at a later date. And we could do a whole podcast on that.
Eric Fullerton [00:23:49]:
Yeah, I could probably do about 10 podcasts with you. So I wanted to shift on and talk about another initiative and I want to talk sustainability. Intel has such a critical role to play here. In many ways, it's a supply chain within a supply chain and has, I think, taken some leadership positions and stances. But I think when you zoom out across the broader global economy, sustainability is often a term that is something that can be fluffy, it can lack specificity. There aren't necessarily real results for a lot of companies, I think that you have done and Intel has done a pretty good job like putting teeth behind it. It seems like your executive team, 100% renewable energy sourcing by 2030, makes these claims really holding teams accountable
Eric Fullerton [00:24:43]:
You joined the adopted United Nations Global Compact. You adopted that. How do you take that fuzzy thing and actually action against it in a real way that can be impactful and beneficial to the environment?
Jackie Sturm [00:24:56]:
The most important thing is trying to understand how sustainability can add value to your business. You know, if you think about a bolt on a nice thing that you can do for the environment, that's not the whole story. You know, I'm always trying to figure out how do I differentiate my company for our customers. I want to drive greater business success and I want to do good things for the world as well. But one of the things, you know, that's most important is how does sustainability helps support the business? How does it meet the needs of our customers? And so one of the things I am hearing as I post customers more frequently than ever before is that they do care about ESG.
Jackie Sturm [00:25:42]
So my customers need Intel to perform as a responsible, sustainable source, uh, that is using energy in a responsible way. Um, so if I look at environmental, social, and governance, let me go through a few examples of how I think this is not fluffy and how you ensure that it takes root in your company in the environmental space. If I just think about our factories, they're in places like Arizona, New Mexico, and Israel,
Jackie Sturm [00:26:10]:
And the thing they have in common is those are all deserts. I think most of you know that investing in water recycling and water reclamation is not cheap, while water itself is relatively cheap. Nonetheless, we have made the commitment to invest in recycling millions of gallons in each of our factories so that we can maintain the local watersheds and support the communities that we operate in. What we view these as are key levers that help us retain our license to operate and support business continuity. As access to fresh water is increasingly challenged in all of those areas, you can think about it as business insurance that allows you to avoid downtime, which is very measurable in terms of its cost, and maintain customer deliveries. And if you're not able to do those things, the downtime costs you money in terms of wasted labor and fallow equipment. And the lack of customer deliveries is obviously cutting short your revenue and your profitability. So working with the business to help them understand those parameters is helpful.
Jackie Sturm [00:27:23]:
And then if you think about it from a social perspective, what we find is, you know, based on a great baseline of efficiency studies, the right human rights in your suppliers and your sub-suppliers are crucial. 60-hour work week with one day off, which is in seven, which is fundamental to the United Nations Human Rights Compact that is proven to be the most productive work week for employees. And having the right working conditions, housing, et cetera for workers also ensures worker retention by which you avoid the need to go hire new workers, train them, suffer their lack of efficiency, and then from a governance standpoint, the supply chain again. Everywhere the money is, we have to operate in positions of trust. So making sure that your visible ethics, your audits and your after-action reviews help ensure that as a company you can be viewed as an ethical party to do business with. And for us, that's been proven out by third-party ratings from well known groups like Ethisphere, Just Capital and others. So these things all contribute to the bottom line. And I love the phrase you can do well by doing good.
Jackie Sturm [00:28:49]:
And I think essentially responsible business is just plain old good business and differentiates your company in the eyes of your customer while also delivering tangible P&L benefits.
Eric Fullerton [00:29:01]:
Awesome. That was great. Super detailed, as I would expect. And I think the specificity and like I said, I think there's a lot of teeth and proof. And when you think through which I think is the mantra of this episode, cash is king. You can flow all of these initiatives through that. I think it makes a lot of sense, the supply chain industry as a whole when it comes to talent attraction. Specifically the importance of having very talented women leaders in supply chain now and in the future. And I think the industry has made progress, but I would not say we're there yet.
Eric Fullerton [00:29:43]:
And I just wanted to kind of open-ended question comment to see what your perspective is on that.
Jackie Sturm [00:29:51]:
Well, I think it's important to nurture women as leaders. I think they are an important talent pool. And in a world where talent is going to be particularly challenged, I think it is wise to access the broadest population. I think building a pipeline of women leaders is extremely important. Over my years in the supply chain, I've sponsored multiple programs to develop women as leaders and to bring them through the early stages of their career into middle management, into director levels and as executives. The way you do that is in a combination of efforts. First you target what are the gaps that exist. And sometimes, I think it is somewhat of a reticence that women may have to put themselves forward. And I had a great mentor who started me on this path years and years ago.
Jackie Sturm [00:33:59]:
And he said, Jackie, it's like baseball. If you want to get a hit, you got to step up to bat. And so my focus as I've tried to develop women in the supply chain is to help them become more comfortable stepping up to bat. And so I would advise people, if you are trying to propel women to their next level, one of the most important things you can do is stretch them beyond what either you or they think they are ready for while providing systematic coaching to help them through their stages of growth. You need to invest in them. And that investment is personal, kind. Share your principles, put them in tough assignments and, you know, help them feel like they're ready for it. Move them around, test them on their strategic perspectives and whether they're able to influence others who aren't in their chains of command. You also need to let them know how much you value them.
Jackie Sturm [00:31:51]:
And you do that by giving them chances to make you proud and publicly acknowledging their good work. Women tend to think they're not ready for things. You know, they might be 90% ready, but they want to be 100% ready. So challenge them to continuously grow their professional skills. Help them work on their business acumen. Help them recognize human dynamics and how they need to enlist others to achieve big things together. So I think the cream will rise in the right environment, but you have to give it the chance. And part of that is by catalyzing women to feel like they are capable and they are ready to move over to those next steps.
Jackie Sturm [00:32:34]:
But beyond that, you need to put them in operations roles. I see that traditionally women have succeeded in roles like human resources or finance or some of the staff positions. They need to own the P and L. They need to be responsible to deliver revenue or to deliver production or to deliver something that is critically required for the company. And as women become more engaged in those roles, I think they will just naturally fill out the pipeline of employees and workforce in the supply chain. And if you then combine it with stretching them to bigger and better things, you will have a really robust and powerful part of your workforce.
Eric Fullerton [00:33:22]:
That was great. I wanted to close out with just a couple questions. And when you look back on your career, you've obviously had an incredibly successful career. I was looking at the list of awards that you've received Intel under your leadership has received most recently 2024 Leader in supply chain. There was too many to list, but I wanted to ask you kind of a question about if you were able to flash back to the beginning of your career and give yourself one piece of advice. What would that be?
Jackie Sturm [00:34:01]:
It would be to recognize the power and the value of a strong network and to build those trusting relationships even earlier. I found over time that those relationships I've built had been my most important resource and support as I've had to face bigger and tougher situations. And I've been able to rely on tremendous people who have helped me through a lot of learning and personal growth.
Eric Fullerton [00:34:30]:
So usually we close the podcast, we ask all the guests about one question. What is your hot take on the supply chain industry today?
Jackie Sturm [00:34:39]:
The importance of the supply chain is only going to increase. The regulatory, political and risk environment I think are going to challenge us like never before. And I am confident that the supply chain industry is going to step up and deliver amazing solutions. I'm going to quote one of my favorite guys, Kevin O'Mara, who spearheaded the Gartner Top 25 supply chain program over 25 years ago. And I'm going to say, supply chain will save the world. So go get it, guys.
Eric Fullerton [00:35:12]:
Jackie, thank you so much for spending some time with us today. I personally learned a lot. I know that everyone who listens will too. And I think you took such big topics and added specificity and teeth and detail to them in such a structured way. I can see you have a finance background and mindset in so many ways. Thank you for spending time with us. Thank you for being a supply chain champion. Really appreciate you being on.
Jackie Sturm [00:35:40]:
Thank you for having me.
Eric Fullerton [00:35:44]:
Thank you for listening to Supply Chain Champions. To get connected and learn more, visit project44.com and click the link in the comments. To subscribe to project44's newsletter, tune in, get smart and move forward.