In (and out of) the deep water: interview with Dave Mosley
One year after the floods in Thailand submerged the hard drive supply chain, Dave Mosley has pulled Seagate Technology out of the mud and back to a strong competitive position.
Mark Solomon joined DC VELOCITY as senior editor in August 2008, and was promoted to his current position on January 1, 2015. He has spent more than 30 years in the transportation, logistics and supply chain management fields as a journalist and public relations professional. From 1989 to 1994, he worked in Washington as a reporter for the Journal of Commerce, covering the aviation and trucking industries, the Department of Transportation, Congress and the U.S. Supreme Court. Prior to that, he worked for Traffic World for seven years in a similar role. From 1994 to 2008, Mr. Solomon ran Media-Based Solutions, a public relations firm based in Atlanta. He graduated in 1978 with a B.A. in journalism from The American University in Washington, D.C.
Running a supply chain to support a global information technology enterprise is a stressful job under the best of circumstances. It becomes a potential mind-blower when disasters—natural or man-made—intervene.
For Dave Mosley, head of operations and supply chain for Cupertino, Calif.-based disk drive giant Seagate Technology, 2011 was one of those mind-blowers.
First was the March 11 earthquake off the coast of Japan that triggered a devastating tsunami. Then the nightmare scenario: severe flooding in Thailand from July through October that literally put much of the world's hard disk drive (HDD) and component production under water.
Mosley spent most of 2011 handling two jobs. The first was to pull Seagate out of the proverbial deep muddy once the floodwaters receded. The second was to harden its supply chain so the company could be as prepared as possible for future disasters.
In his current role, Mosley oversees a global network that employs more than 50,000 people, manages $8 billion in assets in 11 factories, and brings in 30 million parts each day. The Seagate supply chain involves about 300 component suppliers, 900 shipping lanes, and numerous warehouses, distribution centers, logistics partners, and service supply chain collection points worldwide.
Mosley recently spoke with DC Velocity Senior Editor Mark B. Solomon about Seagate's ability to recover from the flooding, its impact on Seagate's long-term supply chain transformation initiative, and the lessons all logisticians need to learn from a disaster that resulted in $45 billion in losses and has been categorized as the worst flood in history.
Q: What kind of shape was Seagate's supply chain in prior to the flooding, and a year later, where does the recovery stand?
A: Seagate's supply chain already was flexible and resilient. We prepare for risks such as this with buffer stock and inventory, which we were able to draw on to meet demand. We had multiple levels of challenges, and Seagate forged through them incredibly well. We had a number of employees affected by the floods, and they, along with incoming parts, weren't getting to the factories. As a result, we had to quickly adjust our builds and delivery commitments. As component factories recover, the supply-demand balance is normalizing and inventory levels are returning to pre-flood levels. The HDD industry itself will emerge stronger and healthier, but it will take some time to fully recover.
Q: Did you anticipate the Thai floods would do such widespread damage to hard drive production and cause such disruptions to the supply chain? And was the IT supply chain caught ill-prepared for the damage that ensued? A: I think a lot of people outside the industry underestimated the impact of the floods on the business at first. Those inside the industry knew the serious ramifications of the supply disruption because so much of the component supply—along with final drives and assemblies—was concentrated in the area where the floods occurred. What happened is really a structural change to the industry. As a result of this event, the market is waking up to the fact that HDDs are not commodities, but complex, high-tech hardware solutions requiring sophisticated operations to design, make, and deliver them.
Seagate weathered the event very well compared to others because we had pre-planned to have supply, manufacturing, and assembly operations in diverse locations. Nonetheless, the event has created an opportunity to reassess our supply chain to make it even more agile and resilient to all kinds of risk, including natural disasters.
Q: Seagate is undergoing an enterprisewide supply chain transformation. What are the major components of this strategy, how far along are you, and was this initiative triggered by the floods and their aftermath? A: The current operation has served Seagate and its customers well for the past 30 years. With optimistic growth projections for the storage industry, combined with relentless pressure on product prices and innovation in new markets such as the cloud and mobile devices, it's imperative that our supply chain adjust to these changing demands. The Thailand floods accelerated already-planned initiatives to make Seagate's supply chain more flexible, robust, resilient, and responsive to change.
Q: Following the floods, Seagate reduced the number of just-in-time (JIT) hubs its customers operate near their own delivery points. This enabled Seagate to "bypass" the JIT process and ship directly to OEM customers. While this would obviously reduce JIT hub costs, wouldn't it also cause supply disruptions if an event—natural or man-made—affected your factories? A: No, quite the reverse. Reducing the number of JIT hubs, and consolidating them into fewer regionalized locations, gives us much greater flexibility, capability, and capacity to adjust to sudden shifts in demand. We can become more responsive by having the fuller capabilities to ship directly from our factories or from more strategically regionalized hubs that are closer to the point of consumption as well as through traditional JIT hubs.
Q: A number of big companies, such as IBM, P&G, Ford, Boeing, and Dell, have created "control towers" that allow their supply chain folks to oversee the flow of parts and products and make adjustments in times of crisis. Is this something Seagate is doing? A: We are increasingly participating with our customers and our suppliers to have greater end-to-end visibility of their orders, from component supplies and finished products to final delivery. We're doing this through greater communication, co-planning, and collaborative execution software tools. We're also entering into more long-term service agreements with our major customers, which enable us to plan better for the future as a partner rather than just a vendor.
Q: One takeaway from the Thai floods and the Japanese earthquake/tsunami is the need for companies to have multi-tier suppliers strategically positioned to pick up the production slack in the event a location gets knocked out of commission. Is that commonplace throughout the supply chain? If not, should it be? A: Supply chain leaders are recognizing the importance of balancing multi-tier supplier relationships with fewer core and trusted suppliers that consistently produce quality products. We look for suppliers that have a global footprint but also regionalized capabilities with value-added services, which allows us to be more flexible if supply or demand quickly shifts from one location to another.
Q: We live and work in a global "village" that can be capricious and perilous. What advice can you give your fellow supply chain professionals—regardless of their vertical—on how to protect their product flow, and fulfill their customers' needs, when disaster strikes? A: Three things: Strong, trusted, and deep relationships with suppliers and customers; alignment around common objectives that benefit all parties; and end-to-end, aligned metrics for investors, customers, and employees. If supply chains can concentrate on these three priorities, everything else should fall into place in good times and bad.
As the Trump Administration threatens new steps in a growing trade war, U.S. manufacturers and retailers are calling for a ceasefire, saying the crossfire caused by the new tax hikes on American businesses will raise prices for consumers and possibly trigger rising inflation.
Tariffs are taxes charged by a country on its own businesses that import goods from other nations. Until they can invest in long-term alternatives like building new factories or finding new trading partners, companies must either take those additional tax duties out of their profit margins or pass them on to consumers as higher prices.
The Trump Administration on Thursday announced it may impose “reciprocal tariffs” on any country that currently holds tariffs on the import of U.S. goods. That step followed earlier threats to apply tariffs on the import of steel and aluminum beginning March 12, another plan to charge tariffs on the import of materials from Canada and Mexico—now postponed until early March—and new round of tariffs on imports from China including a 10% blanket increase and the elimination of the “de minimis” exception for individual items under a value of $800 each.
Various industry groups say that while the Administration may have legitimate goals in ramping up a trade war—such as lowering foreign tariff and non-tariff trade barriers—applying a strategy of hiking tariffs on imports coming into America would inflict economic harm on U.S. businesses and consumers.
“This tariff-heavy approach continues to gamble with our economic prosperity and is based on incomplete thinking about the vital role ethical and fairly traded imports play in the prosperity,” Steve Lamar, president and CEO of The American Apparel & Footwear Association (AAFA) said in a release. “Putting America first means ensuring predictability for American businesses that create U.S. jobs; affordable options for American consumers who power our economy; opportunities for farmers who feed our families; and support for tens of millions of U.S. workers whose trade dependent jobs make our factories, our stores, our warehouses, and our offices function. Sweeping new tariffs — a possible outcome of this exercise — instead puts America last, raising costs for American manufacturers for critical inputs and materials, closing key markets for American farmers, and raising prices for hardworking American families.”
A similar message came from the National Retail Federation (NRF), whose executive vice president of government relations, David French, said: “While we support the president’s efforts to reduce trade barriers and imbalances, this scale of undertaking is massive and will be extremely disruptive to our supply chains. It will likely result in higher prices for hardworking American families and will erode household spending power. We encourage the president to seek coordination and collaboration with our trading partners and bring stability to our supply chains and family budgets.”
The logistics tech firm Körber Supply Chain Software has a common position. "The imposition of new tariffs, or the suspension of tariffs, introduces substantial challenges for businesses dependent on international supply chains. Industries such as automotive and electronics, which rely heavily on cross-border trade with Mexico and Canada, are particularly vulnerable,” Steve Blough, Chief Strategist at Körber Supply Chain Software, said in an emailed statement. “Supply chains that are doing low-value ecommerce deliveries will have their business model thrown into complete disarray. The increased costs due to tariffs, or the increased costs in processing time due to suspensions, may lead to higher consumer prices and processing times.”
And further opposition to the strategy came from the California-based IT consulting firm Bristlecone. “Tariffs or the potential for tariffs increase uncertainty throughout the supply chain, potentially stalling deals, impacting the sourcing of raw materials, and prompting higher prices for consumers,” Jen Chew, Bristlecone’s VP of Solutions & Consulting, said in a statement. “Tariffs and other protectionist economic policies reflect an overarching trend away from global sourcing and toward local sourcing and production. However, despite the perceived benefits of local operations, some resources and capabilities may simply not be available locally, prompting manufacturers to continue operations overseas, even if it means paying steep tariffs.”
The Google-backed humanoid robot maker Apptronik on Thursday announced it had raised $350 million in venture funding to fuel the deployment of its “Apollo” model and to scale up operations, accelerate innovation, and hire more staff.
That innovation push will be specifically aimed at expanding Apollo’s capabilities, enabling it to address a wide range of applications in industries like logistics and manufacturing, as well as eldercare and healthcare.
Texas-based Apptronik is also scaling up manufacturing of Apollo units to fulfill growing orders across priority verticals—including automotive, electronics manufacturing, third-party logistics providers (3PLs), beverage bottling and fulfillment, and consumer packaged goods.
The “series A” venture round was co-led by B Capital and Capital Factory, with participation from Google. It follows $28 million in previous funding. Apprtronik was founded in 2016 at the University of Texas at Austin’s Human Centered Robotics Lab.
“With Apptronik, we see a world in which humanoid robots play a vital role in addressing societal challenges—from assisting with disaster relief and elder care to supporting space exploration and medical advancements. Industry leaders like Mercedes-Benz and GXO Logistics are already seeing the real-world impact of Apptronik's technology,” said Howard Morgan, chair and general partner of B Capital.
Warehouse automation orders declined by 3% in 2024, according to a February report from market research firm Interact Analysis. The company said the decline was due to economic, political, and market-specific challenges, including persistently high interest rates in many regions and the residual effects of an oversupply of warehouses built during the Covid-19 pandemic.
The research also found that increasing competition from Chinese vendors is expected to drive down prices and slow revenue growth over the report’s forecast period to 2030.
Global macro-economic factors such as high interest rates, political uncertainty around elections, and the Chinese real estate crisis have “significantly impacted sales cycles, slowing the pace of orders,” according to the report.
Despite the decline, analysts said growth is expected to pick up from 2025, which they said they anticipate will mark a year of slow recovery for the sector. Pre-pandemic growth levels are expected to return in 2026, with long-term expansion projected at a compound annual growth rate (CAGR) of 8% between 2024 and 2030.
The analysis also found two market segments that are bucking the trend: durable manufacturing and food & beverage industries continued to spend on automation during the downturn. Warehouse automation revenues in food & beverage, in particular, were bolstered by cold-chain automation, as well as by large-scale projects from consumer-packaged goods (CPG) manufacturers. The sectors registered the highest growth in warehouse automation revenues between 2022 and 2024, with increases of 11% (durable manufacturing) and 10% (food & beverage), according to the research.
The Swedish supply chain software company Kodiak Hub is expanding into the U.S. market, backed by a $6 million venture capital boost for its supplier relationship management (SRM) platform.
The Stockholm-based company says its move could help U.S. companies build resilient, sustainable supply chains amid growing pressure from regulatory changes, emerging tariffs, and increasing demands for supply chain transparency.
According to the company, its platform gives procurement teams a 360-degree view of supplier risk, resiliency, and performance, helping them to make smarter decisions faster. Kodiak Hub says its artificial intelligence (AI) based tech has helped users to reduce supplier onboarding times by 80%, improve supplier engagement by 90%, achieve 7-10% cost savings on total spend, and save approximately 10 hours per week by automating certain SRM tasks.
The Swedish venture capital firm Oxx had a similar message when it announced in November that it would back Kodiak Hub with new funding. Oxx says that Kodiak Hub is a better tool for chief procurement officers (CPOs) and strategic sourcing managers than existing software platforms like Excel sheets, enterprise resource planning (ERP) systems, or Procure-to-Pay suites.
“As demand for transparency and fair-trade practices grows, organizations must strengthen their supply chains to protect their reputation, profitability, and long-term trust,” Malin Schmidt, founder & CEO of Kodiak Hub, said in a release. “By embedding AI-driven insights directly into procurement workflows, our platform helps procurement teams anticipate these risks and unlock major opportunities for growth.”
Here's our monthly roundup of some of the charitable works and donations by companies in the material handling and logistics space.
For the sixth consecutive year, dedicated contract carriage and freight management services provider Transervice Logistics Inc. collected books, CDs, DVDs, and magazines for Book Fairies, a nonprofit book donation organization in the New York Tri-State area. Transervice employees broke their own in-house record last year by donating 13 boxes of print and video assets to children in under-resourced communities on Long Island and the five boroughs of New York City.
Logistics real estate investment and development firm Dermody Properties has recognized eight community organizations in markets where it operates with its 2024 Annual Thanksgiving Capstone awards. The organizations, which included food banks and disaster relief agencies, received a combined $85,000 in awards ranging from $5,000 to $25,000.
Prime Inc. truck driver Dee Sova has donated $5,000 to Harmony House, an organization that provides shelter and support services to domestic violence survivors in Springfield, Missouri. The donation follows Sova's selection as the 2024 recipient of the Trucking Cares Foundation's John Lex Premier Achievement Award, which was accompanied by a $5,000 check to be given in her name to a charity of her choice.
Employees of dedicated contract carrier Lily Transportation donated dog food and supplies to a local animal shelter at a holiday event held at the company's Fort Worth, Texas, location. The event, which benefited City of Saginaw (Texas) Animal Services, was coordinated by "Lily Paws," a dedicated committee within Lily Transportation that focuses on improving the lives of shelter dogs nationwide.
Freight transportation conglomerate Averitt has continued its support of military service members by participating in the "10,000 for the Troops" card collection program organized by radio station New Country 96.3 KSCS in Dallas/Fort Worth. In 2024, Averitt associates collected and shipped more than 18,000 holiday cards to troops overseas. Contributions included cards from 17 different Averitt facilities, primarily in Texas, along with 4,000 cards from the company's corporate office in Cookeville, Tennessee.