Finally, there's lead time. Flextronics has enabled us to significantly improve our ability to react to customers' demands. We pride ourselves on the fact that we're able to deliver printed circuit cards in two to four weeks and mechanicals in four weeks, 90 percent of the time or better, and that's very important because being able to react to fluctuations in demand is crucial to our customers.
S&DCE: What is your process for reviewing and improving the relationship?
Weingarth: We have what we call WBRs, or weekly business reviews, and QBRs, which are quarterly business reviews. For the weekly business reviews, we meet with the different Flextronics entities that we use, whether that's design services, the logistics organization, the mechanical assembly organization in Guadalajara or the Shanghai facility where the printed circuit cards are being built. We review the details of our operations: How many cards were you supposed to build? What's the quality associated with those cards?
In the quarterly business reviews, we get all the functions together — engineering, development, logistics, all the functions within Flextronics, all the plant — and review a macro-level set of metrics, looking at where the supply chain is going, or where we think strategically the next facility or country is that Flextronics is going to open up. For example, if they decide to move into Vietnam, we look at the strategic sourcing issues there. We look at the tactical performance and how we performed over the last quarter, and we also look at strategies and where Calix is going over the next two to three years and how that lines up with where Flextronics is going.
Then, sometimes as part of the QBR and sometimes separately from the quarterly review, we have an annual all-day strategic planning session. This year Flextronics came with about 15 of their people from different areas throughout the world, and we had our engineering team as well our operations team. We talked about what Flextronics' capabilities are and what Calix's vision of the future is, and we talked about how we can leverage one another to improve both entities.
S&DCE: What technologies or systems do you use to enable the relationship with Flextronics?
Weingarth: First and foremost, the most important system we have is Agile, the product data management system. It enables us to put all our information into that system in terms of product number, suppliers, preferred alternatives, all that wonderful information and engineering data. Flextronics also has that system and there's a link between the two systems so that when we release a product that information is fed electronically into the Flextronics system.
Second, over time we have developed links between our systems and their systems. For example, from a shipment perspective, when they ship their product, they're actually doing transactions back in our systems or enabling us to do those transactions electronically. While this is still a work in progress and we have a few other pieces to link in, from an inventory movement perspective, that's another piece that we've been able to automate.
Third are the quality systems. We have a couple of packages, one being SigmaQuest, and Flextronics has multiple systems too, that enable all the quality data to be captured and then reported on a daily, weekly, biweekly and bimonthly basis. Those systems are very, very important to us. For example, it lets my engineers understand every day the yields in Shanghai by just looking at a screen. That is a very useful tool for us.
The other tool is just e-mail. If you go back as little as 10 years ago, this would have been a lot more challenging, especially when you think about working in China and the language barriers. With e-mail and the sophistication of the talent pool in China these days, you can communicate back and forth relatively easily on a daily basis and can get information constantly, even though we're offset by 10, 11 or 12 hours.
S&DCE: So communication and the ability to be able to understand what's going on within Flextronics are very important for Calix.