© Electronics Production | March 06, 2012

Jabil's Scott Gebicke talks shop

Evertiq talked to Jabil Defense and Aerospace Services' new President, Scott Gebicke, about plans to expand the company's footprint, why the Pentagon's reduced budget is a double edged sword and the counterfeit problem.
Earlier this year Scott Gebicke joined Jabil Circuit as Vice President Global Business Units and President, Jabil Defense and Aerospace Services.

Before this Gebicke worked at McKinsey & Company’s Aerospace and Defense practice in London and San Francisco and, earlier, served seven years with the US Navy as a surface warfare and anti-terrorism officer.

Over the phone we discussed trends in the industry and plans for the Jabil Defense and Aerospace specifically.

What are your priorities in this new role, what do you hope to achieve?

It's clear we want to grow this business significantly, the Defense and Aerospace. I'd like to triple the size of our business in the next few years here.

The priorities for that is that we really have to get out in the market and stress this concept of affordability in defense and aerospace and help transform the defense and aerospace industry from purely vertical integrated to one that looks at manufacturers, such as ourselves, as key strategic allies to pull costs out of critical government programs.

How big a part of the wider group is Jabil Defense and Aerospace?

Right now we run up around 300 million dollars.

"I'd like to triple the size of our business in the next few years here."
Where do you do most of your business?

Right now the bulk of our business is in the western OEMs, so that's the US and Europe. We do a combination of commercial avionics for commercial aerospace as well as for the full spectrum of defense electronics for space, air, land and sea. But we also have business in Brazil, in Singapore, and we have capability in Shanghai to ramp up our airspace production. We have certifications out there.

You mentioned wanting to increase affordability. How are you going to achieve that?

The western defense budget is under severe pressure right now, so we buy as a company tens of billions of dollars of electronics components and that gives a tremendous amount of material scale. On top of that, 105,000 employees in sixty locations in twenty four countries gives us a labor efficiency and labor experience to reduce costs and just with those levers we think there is 10 to 20 percent savings we can take out of our customers on our electronic component and electronic assembly manufacture.

When those same OEMs are looking at low utilization, meaning they have factories that are underloaded, people that are underutilized, that number could go up to 30 – 35 percent. We're talking big numbers we can move the needle on programs.

The Pentagon's new budget will be significantly reduced, how much of a challenge is that for you as a company?

It's a double edged sword. On one hand if you are on a major program that gets canceled or gets cut you're in trouble, right? And so we have to constantly look at our portfolio and look at the programs that we are actually producing for and make sure that they don't get cancelled or what the risks are of those getting canceled by the government.

On the positive side a reduced budget means there is a lot more cost pressure on the OEMs to save money, and that's where we can help them. So actually net and net we see that as being a benefit to our business, it'll just take some time to develop that.

Are there some immediate changes that you are taking this year?

I think the first thing is to double down on our global footprint and leverage that a lot more than we are.

What does that mean in practical terms, are you looking to expand?

We already have the footprint. We're looking to expand in India as an offset supplier, as well as to scale our businesses in Brazil, Shanghai and Singapore both in commercial airspace for those markets and, especially Brazil and India, for defense.

The reason behind that is that's the message we're getting loud and clear from our core key customers in the West. They're looking at those markets to grow their business and for us to be a strategic partner in those places.

Do you have a time-frame for this?

Next six months -before we do the go, no go, break ground types of decisions.

Are their general industry trends that you are excited about or worried about for the company?

I think we have world leading capabilities at Jabil in design solutions, value added engineering and rapid prototyping and these are things that have been utilized by our commercial customers for a long time.

If you've looked at anything in the Pentagon's budget, that's what they talk about - rapid deployment, rapid proto time, designing costs out of programs - and I think we have a tremendous advantage in that area to help our customers in the design and new product introduction and prototyping realm.

The increasing prevalence of counterfeit parts in the market. That's something that I've been learning a lot about here at Jabil and Jabil has a tremendous world leading supply chain to be able to mitigate against that a lot of the OEMs don't have, just because of the size and scale.

That's something from a wider industry trend,  EMS providers need to be much more proactive in sharing that knowledge with their customer base and helping their customers protect their government and the country against counterfeit parts in defense equipment.
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