Feature Story

Classic Guitars with a Digital Business Backbeat

Michael Spandau, Fender's SVP for Global Information Services

Fender sparked a musical revolution. The digital revolution keeps it rolling.

From a humble radio repair shop in Fullerton, Calif., Leo Fender changed the future of music.

His 1950 Telecaster-style guitar set the pace, followed by the Precision Bass, Stratocaster, and other timeless instruments. And the unique, chiming Fender tone would define artists from Buddy Holly and Merle Haggard to Jimi Hendrix and Kurt Cobain.

Michael Spandau, Fender Musical Instruments Michael Spandau, Fender's SVP for Global Information Services

“Touched by an angel,” Michael Spandau, senior vice president for global information services at Fender Musical Instruments, said of his founder’s innovative designs.

But getting high-quality guitars and amps to a vast, global customer base demands a new kind of innovation. Fender sales neared $500 million in 2016, and its supply chains span continents.

That’s where Spandau comes in.

Fender is a great example of a traditional manufacturer embracing digital transformation to ensure quality and efficiency.Fender still builds nearly all of Leo’s original models (in a dizzying array of variations). But it’s a great example of a traditional manufacturer embracing digital transformation to ensure quality and efficiency in an increasingly competitive global marketplace.

“Digital technologies are extremely important to us,” Spandau said from Fender’s headquarters in Scottsdale, Ariz. “We sell many products, a large amount of them overseas. And the IP network basically supports our business on a global level.”

IT Cranks the Volume

Under Spandau, the IT organization maintains the company’s complex operations, while driving new transformation.

“Keeping the lights on, I consider table stakes,” Spandau stressed. “The systems have to be stable, secure, and operational. We have a responsibility to thousands of shop floor workers who diligently produce the best guitars and amplifiers. And, of course, we have a responsibility towards our customers and our dealers.”

But Spandau continues to push the envelope, whether through new technologies or creative organizational techniques.

“We implement new projects that reduce costs or increase efficiencies,” Spandau said. “And we provide business intelligence to the organization.”

That tight alignment between IT and business is crucial to Spandau.

“We are totally integrated with the business,” he stresses. “I have an application team that works side-by-side with the business. They have the functional knowledge, and they have the technical knowledge to help the business on an operational level and on a strategic level.”

One way to build that is by encouraging IT workers to step out of the shadows.

“We are not an IT organization that operates behind a black curtain,” Spandau said. “As part of our yearly goals we spend a minimum of one day in any function but IT. That gives IT employees an appreciation for what’s happening within the other functions.”

It also helps to have an ample supply of top-notch guitar players in the IT organization. They know how demanding Fender’s customers — both young and old — can be.

After all, Leo Fender set a high standard with his innovations, and an early Strat or Tele fetches tens of thousands of dollars on the vintage guitar market.

The challenge for Spandau, as with tech leaders for other large manufacturers, is to maintain quality in a massively scaled operation. New technologies — such as cloud, machine learning, artificial intelligence, and Internet of Things — play an increasing role.

Wood, Plastic, and Paint — Plugged In

IoT systems, for example, monitor the integrity of Fender parts during the manufacturing process, and if a problem is detected, workers are alerted on easy-to-read dashboards. They also keep tabs on the plant floor, where wood and paint are vulnerable to environmental changes.

“We have deployed temperature and humidity sensors at certain key areas of our shop floor and our warehouse,” Spandau said. “They make a big difference, and they are used to monitor a particular area and send alerts if a particular threshold is being exceeded.”

Spandau envisions sharing IoT data throughout the company’s partner ecosystem, including the makers of industrial machines that carve and paint Fender guitar necks and bodies.

“We are having a lot of discussions with our manufacturing facilities about implementing additional IOT devices,” he said, “and we have plans to extend some of these sensors to our OEM manufacturers.”

Capturing the data from those sensors, Spandau stresses, is only part of the challenge.

First off, it has to be secure.

“We have multiple layers of cybersecurity,” he said. “And we do quite a lot in terms of employee training to manage security.”

Then the data must be distilled into actionable insights, easily accessed on a mobile device.

“It’s not providing them with more and more data and having them figure out which data to look at and act on,” Spandau added. “The trick is to alert or direct our employees or business partners to the information they really should be seeing. It’s exceptionally important.”

To that end, Spandau keeps a close eye on developments in machine learning and AI — particularly to predict industrial-machine problems or supply-chain complications.

“When you deal with supply chains,” he said, “one of the biggest challenges is when will the product arrive. We’re planning to use actual historical data combined with machine learning algorithms to provide us with more precise data.”

It’s these kinds of innovations that make Spandau’s job more fun than ever.

“We are living in a super exciting time here,” he concluded, “and I believe especially with machine learning and artificial intelligence we are going to be providing capabilities to the organization that haven’t existed before. I'm really looking forward to making that happen here at Fender.”

But for all Spandau’s talk of digital technology, one decidedly analog product remains his favorite.

“The Stratocaster,” he exclaimed. “It’s from the early 1950s, and still to this date, our best-selling guitar.”

Eric Clapton, Bonnie Raitt, and David Gilmour would no doubt agree.