Electronics Production | July 12, 2007

First part of Molex restructuring now implemented

Molex has launched a major program for making the business more efficient. Both manufacturing and sales operations are in the restructuring process right now.
The first part of Molex restructuring plan has now been implemented. The company announced in its 2006 annual report that it would "transition to a global organizational structure that consists of market-focussed divisions during the 2007 financial year".

Until now Molex has used a structure with regional presidents responsible for a combined manufacturing, sales and marketing but this has become more or less a barrier for the company as the businesses that involves two or more regions have become more and more common. These kinds of businesses have during the last five years risen from 36% to 70 % in proportion of the total sales.

Graham Brock, previously president of the European region, has become global president sales and marketing.

"Business dynamics have changed considerably in the last five or six years. Increasingly design is being done at multiple design centers," Graham Brock told in an interview.

"Eighteen months ago we started top debate internally how we could get a front end to our customers that we can execute quicker, we can provide more value and bring business opportunities in to our company quicker and more effectively. I was tasked with coming up with a new approach," he added.

The business has now been arranged in four core industry segments; mobile, consumer, datacom and automotive. Besides these a global EMS team has been set up for handling the six largest EMS providers.

"In sales and marketing we have become region and division agnostic. The sales force is now incentivized on selling all of our products. We also have introduced a new commission scheme that rewards them for any products sold, through any channels including distribution and EMS. Globally we have all the sales force on the same design registration system. A new global commission scheme completed its roll out last week and it has cost us over $1million to develop. This provides us with a tool for tracking global sales which enables use to reward a sales person in the U.K. even if the part if used in the Philippines. It also enables us to look and types of products and designs more efficiently on a global basis. This will help us with new products and concepts", he added.

Next week the company's separate manufacturing and sales divisions are to meet in Chicago to jointly discuss the company's key products as well as setting objectives for manufacturing capacity and new design for new products.

Molex will close its Irish Cork facility and transfer equipment from the Millstreet factory in Cork to its larger factory in Shannon. About 85 people will lose their jobs and the company will invest some €3 million in the Shannon factory. The Shannon facility currently employs around 450 and is one of 54 manufacturing facilities in 18 countries. Molex also has 27 development centers in 14 countries.


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