Scott Theune "Leader in Highlight" - Part 1

I'm doing well, thanks Jackie.

Sure. So my name is Scott Tooney. I am the President of the Americas region for Plexus. We have three regions that we operate in: Europe, APAC, and the Americas side. The responsibility for the Americas region.

It's a great question, Jackie. So I actually started working in a different company that was going through some downsizing. So I surprisingly reached out to my financial advisor, looking for companies that were well positioned for growth over the next five to ten years. I wanted to be proactive in my career. As it turned out, the timing was perfect. The industry that we know was really transitioning from contract manufacturing, where our companies were being used really for surge capacity, to one that's now become much higher level partnership, which is now branded EMS or Electronic Manufacturing Services. So there's a real shift in how we were valued by customers. I started out early in my career with an engineering background. We were growing so fast that I advanced to be a general manager of one of our larger facilities at age 34. Then, as Plexus ventured outside the U.S., I got the opportunity to lead manufacturing and technology strategies on a global basis, with a fair amount of global travel. From there, I ended up moving into supply chain and progressed up to be the leader of our supply chain organization, ultimately became part of our executive leadership team. About three years ago, I had the opportunity to come full circle back into operations as President of the Americas region. Now I have responsibility for five sites in the U.S., two sites in Mexico, and just over a billion dollars in revenue.

Great point. I think it's extremely valuable, especially as you look at change management. How people adopt different strategies in different functions throughout the world. Organizational structures can be different also and play a different role in how you create the change. But when I look at global experience, if you're leading teams, it's also different. You need to provide the right leadership skills and style to retain people in a very competitive market. What I always say is, how do you get discretionary effort from people that don't work in the same building as you? So unless you really understand the different dynamics of different cultures throughout the world and what motivates them, it's very difficult to be a people leader without that experience.

Sure. So our vision, which really hasn't changed, is to help create the products that build a better world. We want to be the global leader in highly complex products demanding regulatory environments. We've been able to stay true to that in the 40 years that Plexus has been in business, and make sure we're adding value to our customers over time. I think another thing that makes us a little bit unique is that we provide full value stream services, including engineering, product development, supply chain, manufacturing, and aftermarket services for about 150 strategic customers within the healthcare, life sciences, industrial, and aerospace and defense industries. Our portfolio is about 40% healthcare, 40% industrial, and 20% aerospace and defense. So that's kind of what we set out to do. What I enjoy about it is that our mission and vision hasn't really changed in the time that I've been with Plexus.

Yeah, it was really interesting dynamics because obviously some of the products became much more in need in the COVID pandemic. One great example I would give you is that within the healthcare space, when the pandemic occurred, an OEM came to us looking for help on producing COVID testing machines because their current provider couldn't scale to what was needed and really ramp effectively. Within three months, Plexus was able to ramp to over 2,000 units a week of testing machines for COVID that really made possible millions of individual COVID tests. I personally was involved in a journey. I came in a weekend to help set up the line, make sure the stations that we were building at were safe from spreading COVID, to protect our employees, which was mission critical. We had to protect our employees to make sure we could build products that could provide the testing for the industry. So it was really a great team effort that really confirmed the culture and the reason I love being part of the Plexus team.

Sure. A few things. I would start out by saying that one of the pillars of our strategy is really focus and discipline. We're intentional on the customers that we select, where we know we can add value, staying true to our mission and vision. We're also not afraid to say no. We want to grow, but we're not afraid to say no if the opportunity really doesn't align with bringing products to market that are going to make a better world. So we don't get into a lot of consumer products. The things that we're going to be in are more regulatory. The second part of that really focuses on the need to have superior execution, focus on zero defects, perfect delivery, how we unite our values and leadership competencies through our teammates and to our customers. Ultimately, that's led to a disciplined financial model that has industry-leading financial performance as well as scores from our customers. We have the highest net promoter scores from our customer base.

A couple of things. First of all, financially, we're really excited. As we're delighting our customers, we were able to guide our first billion dollar quarter of revenue coming into the end of our fiscal year in fiscal '22. Our goals are to reach $5 billion in revenue and continue to have a strong operating profit and ROIC as we target going out to fiscal 2025 to be a $5 billion company. So the track is to continue to grow. I didn't mention this earlier, Jackie, but our growth has all been organic. We are not a company that goes out and acquires to grow. I think it's a really key point because if you grow organically, it gives you a much better opportunity to have common systems for our customers, not confuse our employees on what our mission and vision are, and be able to set the culture that we want through our organization. We're not fighting different cultures as we grow. We've got a very good brand, and I think our employees are really aligned to the values that we have within our organization.

Sure. We actually have a term internally that we call an execution dividend. So we feel if we can perform for our customers, shipping them products on time at a competitive price with zero defects, that we will grow our business and take share from our competition and open up different markets to them. So that's one avenue. The other avenue is going wider. So if we're just doing manufacturing today with an OEM, if they see where we can add more value on the engineering service side, if we can do aftermarket services, repair, rework for them, different parts of our supply chain solutions for them. So when we talk about organic growth, it's how do we take this core set of customers and go deeper with them, rather than trying to have 100 more customers to grow. We want to grow with the customers that we think really align to our mission and vision statement and where we can drive value into the organization.

You know, we probably collaborated more with our customers, Jackie, to be honest, than our competitors. We wanted to make sure that we were first and foremost aligned on employee safety. With our customers, we did a lot of communication on plants that were operating, if they were maybe operating at different efficiencies, different data on what the amount of absenteeism was, so that we could make commitments that we could hold to. So I think we shared probably more best practices with our customers on screening, masking, workstation design, all the things that would go into that, family member leave, absences like that. On the competitive side, we did some things, but they were probably more on the local level than a competitor level. So in the different cities that we would perform, we'd want to make sure we were in alignment with what the local companies were doing, so that we were first and foremost protecting the safety of our employees, but also figuring out how we could best optimize the output for our customers. We made some decisions similar to the example I gave earlier, where we might have put resources to a product that we knew was helping the pandemic over something else that maybe wasn't as mission critical, and still work with that customer to meet their needs. But yeah, there was a lot of collaboration throughout our EHS as well as our human resources to make sure that we were protecting our employees as well as satisfying our customers during the pandemic.

All right, thank you, Jackie.