Interview with Michael Massetti, Corporate Vice President, Advanced Micro Devices, Inc. (AMD)

Shannon CrespinMichael Massetti is Corporate Vice President, Integrated Supply Chain, at AMD with responsibility for global supply planning, inventory management and control, customer operations, order management, fulfilment, and the supply chain management infrastructure program.
Before joining AMD in 2008, Massetti was Vice President, Global Procurement & Quality at Tekelec. In that role, he led a centralized global team covering all spend categories and managed all contract manufacturing, OEM hardware, and software that enabled the transformation of procurement from transactional to an advance sourcing function.
Massetti’s nine years of supply chain leadership have featured an extensive record of cost reduction, innovative supply chain solutions, and organizational transformation. He led the implementation of a new postponement model in AMD’s manufacturing process that reduced inventory and improved factory utilization.
Earlier in his career, Massetti held several leadership positions in supply and program management at Lucent Technologies, Dell and IBM.
Massetti holds a Bachelor of Science in Electrical Engineering from the University of Notre Dame. He also holds his MSEE and MBA from the University of Vermont. He was recognized by Global Supply Chain Review as one of the Top 25 Supply Chain Executives in 2009 and by Supply & Demand Chain Executive as a 2010 Pro to Know.
Massetti lives in Austin, Texas, where he resides with his wife and two daughters.
How important is Supply Chain Management to AMD's overall business strategy?
AMD serves a global marketplace including computer and electronic gaming manufacturers, distributors, and retail channel partners. Each of them may have unique requirements on the supply chain, but all require high levels of service. Excellence in SCM is essential to AMD’s long-term success – the ability to consistently and dependably deliver our products to customers is required for AMD to continue winning new market opportunities.

What primary areas of focus (or key initiatives) is AMD looking at for Supply Chain Management?
AMD continues on our supply chain journey focused on higher levels of customer service, reduced levels of inventory, more flexible manufacturing,and globalization. Developing a competitive edge with a world-class supply chain is essential to continue driving customer satisfaction. An initiative AMD started in 2010 between the manufacturing, demand planning, and supply chain teams focused on improving responsiveness to customers while reducing finished goods inventory and improving factory linearity through a statistical demand model. The results were excellent. We reduced inventory by nearly 50% and improved linearity by about the same. The cross-functional collaboration effort paid dividends in both the income statement and the balance sheet.

How is AMD addressing the market's increasing focus on 'green' supply chains and reducing a company’s carbon footprint?

AMD has published its annual Global Climate Protection Plan, which presents our strategy, goals, and commitment to continually reduce greenhouse gas emissions and contribute to global climate protection efforts. This effort spans our products, operations, and collaborative initiatives with our industry, suppliers, customers, government partners, and employees. Our strategy, quite simply, is to make energy conscious, smart choices in our operations and to leverage the collaborative bond with our customer and technology partners, positively impacting our products and supply chain. After achieving previously set climate protection goals, we set new goals in our recently released plan and are committed to continuous improvement. The interdependency of the impact of climate on supply chain is expected to present both challenges to and opportunities for progress for years to come.

What do you think the key Supply Chain Management priority for the coming 2-3 years is for AMD?
AMD must continue to drive supply chain improvements to ensure excellent delivery performance, responsiveness and agility, and, most of all, total customer satisfaction. We want customers to know they can rely on AMD to work with our supply chain partners to develop, deliver, and support world-class technology solutions. One of the more critical elements of this is talent management. We’ve increased our efforts on talent identification, supply chain skills development, rotational and leadership programs, and global awareness. If we are to compete effectively, our people must be sufficiently armed with the right skills.

What do you think the key Supply Chain Management priority for the coming 5-10 years is for AMD?

AMD’s long-term strategies and focus are similar to our priorities for the shorter horizon: cost competitiveness, responsiveness and flexibility, supply risk reduction, and agility. As our customers’ markets change and evolve, we need to have a supply chain that anticipates and supports the dynamics in the markets.

What are the biggest INTERNAL challenges for manufacturers to achieve supply chain excellence?

I like to say that supply chains are the most visible when they are very unpopular. It is easy for a supply chain to be noticed when deliveries are poor, when costs are out of control, when there is minimal supply flexibility, and when it is not responsive. Establishing and maintaining organizational credibility through excellent performance on all of the attributes we discussed earlier are critical. Our internal stakeholders cannot worry that the supply chain will not be able to support the customers once they decide to buy, or buy more, from AMD.

What are the biggest EXTERNAL challenges in achieving supply chain excellence?

Similar to the internal focus, it is absolutely critical that customers have total confidence in their decision to buy from AMD. We run a very high volume supply chain that produces tens of millions of parts a year. To be considered excellent means that we have highly integrated processes with all of our suppliers and manufacturing partners. This includes forecasting, inventory management and visibility, high quality execution, and a focus on customer service.

Who is responsible for planning your company's business continuity when facing natural disasters, major disruptions or other geopolitical issues?

AMD’s global supply management team, the supply chain planning team, and corporate financial planning all work to ensure we follow our business continuity plan during supply disruptions. We all got tested in 2011 with the terrible earthquake and tsunami that hit Japan. We were fortunate to have both solid supplier relationships and sound multi-source practices that minimized the impact to us. We continue to focus on extending the current state of our continuity program now that we have yet another data point for issues that challenge us.

Tell us more about your career in high technology and supply chain.

If you had asked me 25 years ago about supply chain, I probably would have responded in a very perplexed manner – I was not involved in supply or operations at that point in my career. I progressed through several levels of engineering and engineering management before moving into technical program management. For me, the leap into the world of supply chain occurred in 2002 when I joined Lucent Technologies. Their needs and my experience intersected at the right time and I began what is nearing 10 years in supply chain. Of course, when I speak to supply chain or MBA students, I tell them that looking backwards, I can paint a very compelling story of how every move in my career has been orchestrated to reach the point I am at today. That is quite the stretch. I am very fortunate to have benefited from being part of many excellent organizations with great leaders that have afforded me opportunities to contribute and succeed. At this point in my career, my main focus is doing the same for our developing talent.

What are the main skills and personal attributes that have helped you reach your current position?
Supply chain management is a very broad field. It encompasses managing suppliers, logistics, planning, total cost of management, systems and tools, inventory planning and management, and considerable interaction with people, internal and external to the company. The breadth of my cross-functional experience first enabled me to enter SCM. Since then, the opportunities presented to me allowed my technical skills, business experience, communications, and interpersonal skills to continue to grow. The best part of what I do is interact with my colleagues, our suppliers, and our customers.

Given the dynamics of the technology and semiconductor markets, how do you keep your entire organization motivated?

The one thing about being in supply chain is that you can clearly see your impact on the business. We set aggressive performance and improvement targets every year and have made solid progress every year. With our key performance indicators and overall supply chain metrics, we can show the team the progress they’ve made. It’s all about instilling confidence in the team, keeping the challenges real and achievable, and stopping to appreciate the accomplishments along the way and thanking them for the efforts.

Who do you rely on for advice?

I have worked hard to establish and nurture a network of former colleagues and professional associates through professional networking venues like LinkedIn. I share questions and challenges with the people who I have worked closely with and whose opinions and experience I value. Of course, my boss, John Docherty, is the visionary behind AMD’s supply chain and operations strategy, and he has plenty of advice for me.

What have you learned as Corporate Vice President, Supply Chain that has surprised you or changed the way you do business?

Probably the biggest positive surprise for me is how committed and dedicated my colleagues at AMD are. I’m proud to be part of a team that understands the challenges and comes to work each and every day driving to make us better. We focused extensively on supporting and developing our global team. I am very pleased with how we’ve stuck together through the vagaries of our market.

Turbulent times should be the best time to implement changes. However, companies tend to paralyze due to uncertainty in the market or their human capital. What is your advice to maximize the opportunities to implement changes during tough times?
You must have a long-term strategy and plans, constantly review those, but most importantly, do not stray too far from the vision of the organization and the company. Albeit, you may have to make course corrections along the way like varying the adoption rate of SC technology investments, changing priorities and schedules, moving faster to out-source or in-source, and so on. To me, the most important element is the focus on the people in the organization and to ensure they fully comprehend the plan and have the skills and tools to be successful. They need to see, hear, and feel the commitment of the SC leaders to help deal with turbulence and know they are on a path to success
November 2011
See the recipients of the 2009 Top 25 Supply Chain Executives Award.