Products, Distribution Channels, Sales Operations, and Supply Chain Management at Seagate Ming Chao,...

Products, Distribution Channels, Sales Operations, and

Supply Chain Management at Seagate

Ming Chao, Project Manager

Mike Ruggiero, Senior Sales Operation Analyst

Seagate Technology

April 29 2010

Agenda

• Seagate Corporate Overview

• Ming Chao: Distributor Management; Market Integrity Function

• Mike Ruggiero: Sales Operation, Supply Chain Management

Corporate OverviewApril 2010 2

Ming’s Bio

Undergraduate, UC Santa Cruz - Class of 2004

Information System Management

Graduate, Santa Clara Univ – Class of 2010

Master of Business Admin


Ming’s Bio Cont…

Career Path

2004-2006 Supply Chain

International Trade Analyst

2006-2008 Supply Chain

International Trade Sr. Supervisor

2008-Present Distributor Compliance

Market Integrity Program Manager


Seagate: Storage Leader

• Seagate is the world’s leading provider of storage devices.

– Q3 FY2010*: 50.3M drives shipped; revenue of $3.05B

• Provides storage devices for Enterprise, Desktop, Mobile Computing, Consumer Electronics and Retail Markets

– Builds Hard Disk Drives and Solid State Drives

– 31% overall market share

– Broadest product offering in the industry – largest customer base

• Ownership and vertical integration of critical technologies: heads and media

• 52,394** employees worldwide


* For third fiscal quarter ended April 2, 2010** Includes interns, contractors, and agency temps

Seagate Global Presence


Oklahoma City, OK Teparuk & Korat, Thailand

Paris, France

Longmont, CO

Springtown, N. Ireland

Wuxi, China

Shanghai, China

Tokyo, JapanBeijing, China

Delhi, India

Shrewsbury, MA

Suzhou, China

Taiwan

Amsterdam, Netherlands

Shakopee, MN

Bloomington, MN

Sunnyvale, CA

Santa Clara, CA

Fremont, CA

Scotts Valley, CA

Science Park, Singapore

Johor & Penang, Malaysia

Woodlands, Singapore

Ang Mo Kio, Singapore

HQs, Admin and/or Sales

Design

Customer Support

Drive & Component Mfg

Industry Trends


Storage: The Heart of the Content Ecosystem

Storage

Total Units Shipped


Source: Seagate Market & Competitive Intelligence

*

* includes all 3.5-inch ATA drives

Millions

Total GigaBytes Shipped



*

* includes all 3.5-inch ATA drives

Billions

Q3 FY2010

Q3 Financial Highlights


EPS $1.00

Revenue $3.05 billion

Net Income $518 million

Shipments 50.3 million

Margin 29.6%

GAAP numbers

13

Revenue By Channel

100%

80%

60%

40%

20%

0%

Q3FY09 Q4FY09 Q1FY10 Q2FY10 Q3FY10

23232929 2525

1010

69696161 6565

OEMs Distributors Retail

2424

88

6868

881010

2121

7272

77

Corporate OverviewApril 2010


Revenue By Geography

100%

80%

60%

40%

20%

0%

Q3FY09 Q4FY09 Q1FY09 Q2FY010

Americas Asia Pac EMEA

5050

2424

2626

4545

2828

2727

4848

2222

3030

5353

2323

2424

5151

2323

2626

Q3FY010

Market Share Estimates

Corporate Overview April 2010 15

Growth

Y/Y = 44%

Q/Q = 1%Q3 FY10

162.9M Units

Total Market – All Form Factors - Preliminary

Q2 FY10 160.5M Units


Product Update

Desktop Computing Products

• Barracuda XT – Industry’s first 2TB drive

with the blazing-fast SATA 6Gb/s interface

• High-performance PCs, entry-level

servers, PC gaming systems,

PC-based home media servers

• Barracuda 7200.12 – World’s first 2-platter

(500GB each) 1TB desktop hard drive

• Barracuda LP – Industry-leading ‘green’

low-power desktop hard drive

Barracuda®

17

Enterprise Products

News

• Constellation ES: Seagate Ships Industry’s First 2TB

6Gb/s SAS Enterprise Drive

• Savvio 10K.4: Seagate Ships World’s Highest-

Capacity, Most Reliable SFF Enterprise Drive

Review Awards and Accolades!

• Constellation ES: 9/10 score, UMLan, February 2010

• Cheetah NS.2: 9.5/10 “Golden Bear Award,” Bjorn3D,

February 2010

• Cheetah 15K.7: “2009 Editor’s Choice Award,”

Benchmark Reviews, January 2010

• Savvio 10K.4: 9/10 “Golden Bear Award,” Bjorn3D,

April 2010

Cheetah®, Constellation™, Savvio®, Pulsar™


Mobile Computing Products

19

Momentus

• Market-leading technology

• Capacities up to 640GB and spin speeds up to 7200 RPM

• SATA 3Gb/s interface for fast data transfer

• Momentus Thin – World’s first 7mm-high 2.5-inch hard drive for netbooks and ultra-thin laptops

• Momentus® 5400 drive with full disk encryption (FDE) prevents unauthorized data access

• Free-fall protection for beefed-up laptop durability

Seagate FreeAgent® drives make your content available where and when you want it.

Save, Store, Simplify Store, Protect, Secure

Seagate BlackArmor® servers ensure mission- critical data security and availability.

Seagate Retail Solutions

One brand catering to two distinct audience needs

Small Business/Prosumers Looking

for Scalability, Continuity, Speed &

Protection

People Looking for

Convenience, Style &

Enjoyment

® ®

FreeAgent XTreme™: Access large amounts of your content with blazingly fast speed,

making music production, photo copying or editing a breeze

• Blazingly fast data transfer speeds with eSATA, USB 2.0 and FireWire 400 • Get up to 2TB to easily store all your large files and data. • Easily protect all your data with automatic file backup and software encryption.• Sleek, modern design that offers horizontal or vertical orientation • Save energy with environmentally smart utilities.

FreeAgent Go™: The smallest, thinnest portable device on the market, making it easy to

back up, protect and carry all your music, photos, data and memories

• Choose from a rainbow of attractive colors to reflect your style. • Access files with unprecedented convenience with a portable desktop dock. • Up to 1TB to take complete libraries of music, movies and photos with you• Synch content between home and other computers so you have most-recent version.

FreeAgent Desk™: The best place to gather and access all of your important photos,

games, movies, music and documents

• Keep your important files and folders private with powerful software encryption.• Synch content between your desktop and FreeAgent Go or other portable devices.• Sleek, modern design that offers horizontal or vertical orientation and up to 2TB of space • Experience fast data transfer via USB 2.0.

Seagate Retail Solutions (Continued)

21Corporate OverviewApril 2010

Seagate FreeAgent Go Dock+™: FreeAgent Go Dock+ connects directly to

your Mac OS X or Windows computer, allowing access to all the content stored on

a FreeAgent Go or FreeAgent Go for Mac external hard drive without fumbling

with cables.

• Features three additional powered USB ports so you can easily connect other USB devices

• Includes an ENERGY STAR-qualified power supply that can effortlessly power additional devices

Seagate Replica™: A revolutionary backup appliance that completely eliminates

the need to manually learn, manage or dedicate any time to the backup process

• Automatically and continuously stores up-to-date copies of everything on a PC, including installed applications, operating systems, e-mail, photos, etc.

• Integrates into Microsoft Windows, letting you work within a familiar environment should you need to recover a file

• Dock solution enables a one-time setup at your desk—no more fumbling with cords.

• Available in two configurations—either single PC or Multiple PC



The Seagate FreeAgent® for Mac suite of solutions is designed specifically for the Mac community and offers capabilities to meet the

unique performance needs of creative professionals.


The FreeAgent Go, FreeAgent Go Pro™ and FreeAgent Desk for Mac drives are

Mac-ready out of the box.

Wherever, whenever, however you like it…

23

• Sleek design, with feet to complement consumers’ Mac desktop environments

• USB 2.0 FireWire 800 or 200

• Up to 2TB of storage

• Sleek design, with feet to complement consumers’ Mac desktop environments

• USB 2.0 FireWire 800 or 200

• Up to 2TB of storage

• Pre-formatted with HSF+ and TimeMachine Ready

• Offered in 5400 or 7200 RPMs for blazingly-fast performance

• Support for Apple power management for greater energy efficiency

• Pre-formatted with HSF+ and TimeMachine Ready

• Offered in 5400 or 7200 RPMs for blazingly-fast performance

• Support for Apple power management for greater energy efficiency



The new evolution of Seagate FreeAgent Theater+™ HD media player allows consumers to instantly and easily access and enjoy their digital media libraries and favorite Internet content on their home entertainment systems with 1080p HD with DTS 2.0 + Digital Out

and Dolby Digital sound.


FreeAgent Theater+ media player brings enjoyment of digital content

to the living room.

• 10/100 Ethernet port for media streaming and Internet access.

• Optional USB wireless adapter for 802.11n connectivity to home network

• Ability to access and stream content from Yahoo! Weather, Stocks Picasa and Flickr

• 10/100 Ethernet port for media streaming and Internet access.

• Optional USB wireless adapter for 802.11n connectivity to home network

• Ability to access and stream content from Yahoo! Weather, Stocks Picasa and Flickr

• DVD-like playback with surround sound

• Pair photo slideshows with music and array of transition effects.

• Intuitive, on-screen interface with easy-to-use remote

• 2 additional USB ports for accessories or additional USB devices

• DVD-like playback with surround sound

• Pair photo slideshows with music and array of transition effects.

• Intuitive, on-screen interface with easy-to-use remote

• 2 additional USB ports for accessories or additional USB devices

Stocks

http://us.ard.yahoo.com/SIG=15lkjob17/M=650008.12777166.13682554.2268219/D=wt/S=16335623:HEAD/Y=YAHOO/EXP=1256161622/L=3dqabEWTTv4S.raHSosR_R4HwDcUJErfZTYAB5Yc/B=E0DKCEWTSR4-/J=1256154422663212/K=lIq6zCKp4bCvPYRufMyjJw/A=5754027/R=13/SIG=10q80c6r6/*http:/weather.yahoo.com

http://picasa.google.com/

http://www.flickr.com/

http://www.vtuner.com/



FreeAgent DockStar™ is sharing made easy!

• Enables any PC in your home to see your FreeAgent Go drive as a folder on your network

• Access all your photos, movies and music from any PC inside or outside the home.

• Enables easy sharing with friends and family

• Access your content from any networked computer or iPhone.

Connect with your content!


The new Seagate BlackArmor family of storage solutions delivers:

• High-quality storage to centralize and expand digital content for SOHO and Small Businesses

• MANAGEMENT utility for easy accessibility and sharing of digital content over the network and secure online access (Web)

• Reliable and available network storage solution using RAID technology to protect digital content

• High data protection and availability using auto backup applications

• 3-year warranty

• Superior user experience

• Easiest to install and manage

• Highest level of protection

• Wide-variety of solutions

• Grows with your business

Protect Your Business


®

Consumer Electronics Products


Pipeline HD™ Family

Pipeline HD Mini:• World’s first 2.5-in. DVR hard drive; enables slim, sleek industrial

designs

• High-capacity with lower-power performance

• Slim form factor

• Available in 160GB, 250GB, 320GB and 500GB capacities

• Enhanced acoustics for near-silent operation, coupled with 24x7 operation capabilities

• Earth friendly and sustainable product

Pipeline HD.2: • One- and two-disk, cost-optimized solutions

• Available in 160GB, 250GB, 320GB, 500GB and 1TB capacities for content-hungry consumers

• Enhanced acoustics for near-silent operation, coupled with 24x7 operation capabilities

• Earth friendly and sustainable product

Ming’s Job at Seagate


Seagate WW Distributor Presence


ARGENTINA CROATIA GUATEMALA LATVIA PAKISTAN SOUTH AFRICA

AUSTRALIA CYPRUS HONG KONG LEBANON PANAMA SPAIN

AUSTRIA CZECH REPUBLIC HUNGARY LITHUANIA PERU SWEDEN

BAHRAIN DENMARK INDIA LUXEMBOURG PHILIPPINES SWITZERLAND

BELARUS ECUADOR INDONESIA MALAYSIA POLAND TAIWAN

BELGIUM EGYPT IRELAND MEXICO PORTUGAL THAILAND

BRAZIL EL SALVADOR ISRAEL MOLDOVA QATAR TURKEY

BRUNEI ESTONIA ITALY MOROCCO ROMANIA UKRAINE

BULGARIA FINLAND JAMAICA NETHERLANDS RUSSIAN FEDERATION UNITED ARAB EMIRATES

CANADA FRANCE JAPAN NEW ZEALAND SAUDI ARABIA UNITED KINGDOM

CHILE GEORGIA JORDAN NORWAY SINGAPORE UNITED STATES

CHINA GERMANY KAZAKSTAN KOREA, REPUBLIC OF SLOVAKIA URUGUAY

COSTA RICA GREECE KUWAIT OMAN SLOVENIA VIETNAM


Market Integrity Function

Market Integrity Function

Ethics, Policies & Procedures

• Provides training to key stakeholders

• Includes GM policy

Grey Market PolicyEstablishes and identifies a policy for monitoring & managing risks related to the Grey Market and incentives including:

• Developing a grey market and incentives audit approach policy including consequence management

• Obtaining executive management buy-in

• Communicating the policy through series of planned road shows for all relevant regions

POS Support & Analysis Establishes a consistent method/process for analyzing POS data to identify “red flags” for follow up; often prior to incentives being paid

Partner & Deal QualificationEstablishes a consistent process for partner selection and deal qualification to ensure they meet Seagate requirements (e.g. SI’s)

Channel Controls Enhancement Review leading practices and establish processes, systems & controls for managing various channel programs

Proactive Reactive

Grey Market Buys &

Investigations

Risk AnalysisEstablishes a robust risk ranking process to enhance Seagate's channel partner compliance program, including:

• Analyzing internal quarterly data (e.g. POS, inventory, incentive program data) to provide a risk ranking of channel partners for review consideration Using other information (e.g. sales intelligence)

Channel Partner Reviews

Consequence Management(see slide # 6)

Feedback Loop

Sales Operations - Supply ChainProcess Automation

By Mike Ruggiero

Product Production Scenario Planning

32© Seagate Confidential

Model Highlights

© Seagate Confidential

The application was developed to enable scenario planning for next quarter Glass Media and Effective Test Time* constraints

Developed models to maximize profit for both 2.5” products (glass media supply constraint) and 3.5” products (test time constraint)

• Demand Plan input: Rev Plan from Dec/Jan Outlook/Manu forecast• Pricing input: Rev Plan from Dec/Jan Outlook• Cost input: CMC Update from PLM• Media and Effective Test time constraint data from Factory POR (Plan of Record)• Customer Priority from PLM• ESG uses dedicated Gemini while NSG and PSG share the remaining Gemini resource

Goal: Work with PLM to analyze different fulfillment opportunities for customer-product-linearity decisions that maximize profit

• Ability to rapidly alternate between different cost (Std/CMC/TVC/MLB) and pricing measures (ASP/AUP)• Quickly alter customer and product attribute priorities

* Effective test time = Test Time / Yield

33


Scenario Modeling Application

Supply Constraints


Objective: Max ProfitStandard Margin*Allocation Qty

Manipulate Variables

Scenario Modeling Application

Constraints

Manu Forecast Model Results


Manu forecast is higher than previous outlooks• OL1: 3.4M• OL2: 4.5M• Cur FW Manu: 7.9M

2.5” Glass media was constrained for the quarter• Supply for ESG and NSG = 1.2M discs• Demand for ESG and NSG =1.25M discs• Baseline Scenario (Retail = 100% ; all others filled based on profit margins)

ESG fulfilled 100%, NSG Wyatt XXXgb was unfulfilled due to lower margins• Min customer fulfill scenario (Priority = 100%, Opportunistic = 85%, Others = 50%)

Minimum requirements exceeded supply

3.5” Test time was constrained for the quarter for NSG/PSG

• ESG test times were unconstrained in all months• NSG/PSG were constrained in all months. By June was constrained by 10% of total demand

36

HeatMap – DSI Allocation Tool

Hub Inventory & Buffer Targets


Granularity: per Customer, per tab number (9-digit)

Correlate Future Forecast (either Manu or Judged DS) to Build Plan (BP) data

Determine the anticipated Ending Hub Inventory on a weekly basis

Calculate the DOI (Days of Inventory) Delta, in units, available to the customer

Short term projection (13 weeks)

HeatMap – Objective


HeatMap – User Views & Interfaces

Drilldown

Configure Pivot DataMain Pivot Table

Limit Query DataConfigure Pivot Table

1

2

3


Take away this wks demand & what’s left is ending inventory.

Begin with the build from the week before last & add-in last wk’s ending inventory

Take away this wk’s demand & what’s left is ending inventory

This wk’s inventory begins with On-Hand & In Transit from COB the previous Friday

Begin with what was at the factory (to be shipped) from COB the week before last & add-in last wk’s ending inventory

Take away this weeks demand (FC) and what’s left is ending inventory

As well as Future Demand & Supply

Estimates

The remaining wks are calculated the same as wk-3

Now lets calculate the wk-to-wk Ending

Inventory

Begin with

Known Dedicate

d Product

HeatMap – Hub Inventory (CM-Customer Math)

OnH Last Wk (100)InT Last Wk (100)AtF Last Wk (100)

COB Last Wk (Wk 0)

BeginningInv (200)

+

FC ThisWk (100)

-

Ending Inv (100)=

AtF Last Wk (100)+

Beginning Inv (100)+

FC NextWk (150)-

End Inv (50)=

End Inv (50)=

BP This Wk (200)+

Begin Inv (50)+

FC 2nd

Wk (200)-

FC ThisWk (100)

BP This Wk (200)

FC NextWk (150)

BP Next Wk (150)

FC 2nd

Wk (200)

BP 2nd

Wk (100)

Current Wk(Wk 1)

Next Wk(Wk 2)

Wk After Next (Wk 3)

. . .

. . .

OnH: On-handInT: In-transitAtF: At-FactoryFC: ForecastBP: Build Plan

Hub Inventory


HeatMap – Hub Inventory (Seagate Math)


COB Last Wk (Wk 0)

BeginningInv (300)+

FC ThisWk (100)

BP This Wk (200)

FC NextWk (150)

BP Next Wk (150)

Current Wk (Wk 1)

Next Wk (Wk 2)

. . .

. . .


Hub Inventory

BP This Wk (200)+

FC ThisWk (100)-

Ending Inv (400)

=

+

+

FC NextWk (150)-

BP Next Wk (150)

Beginning Inv (400)

Ending Inv (400)

=

Start with all of WWFGI from previous week

Add this weeks build

Subtract this weeks forecast, what’s left is ending inventory

Start with last week’s ending inventory Add this week’s build, Subtract this week’s forecast


Add last week’s build to last wk’s ending inventory, subtract this week’s forecast and … you get the picture

First week’s inventory begins with everything in WWFGI from previous Friday’s COB

HeatMap – Hub Inventory (IM-Intermediate Math)


COB Last Wk (Wk 0)

BeginningInv (200)

+

FC ThisWk (100)

-

Ending Inv (100)=

FC ThisWk (100)

BP This Wk (200)

FC NextWk (150)

BP Next Wk (150)

FC 2nd

Wk (200)

BP 2nd

Wk (100)

Current Wk(Wk 1)

Next Wk(Wk 2)

Wk After Next (Wk 3)

. . .

. . .


Hub Inventory

Beginning Inv (100)+

FC NextWk (150)-

End Inv (50)=

+ BP Last Wk (200)

+

End Inv (50)=

Begin Inv (50)+

FCWk (200)-

BP Last Wk (150)

Take away this week’s forecast, what’s left is ending inventory


HeatMap – Database

3_DS_Grpd_Cols 3_FC_Grpd_Cols3_BP_Grpd_Cols

0_FYFW_Period_All

4_BDFI_Union_Cols

3A_BDFI_Union_Cols

5_BP_Merge5_FC_Merge5_DS_Merge

BuildDelta_PivotData

2_DS_wCustRename 2_BP_wCustRename2_FC_wCustRename

3_DS_Grpd_Cols_MT 3_BP_Grpd_Cols_MT3_FC_Grpd_Cols_MT

5_DS_Merge_MT 5_FC_Merge_MT 5_BP_Merge_MT

SMADBA_Product_Attributes

SVP_CUSTNAME_UNION

4A_BP_FGI_Merge

3_FGI_Grpd_Cols

4_BDFI_Union_Cols_MT

2_FGI_wCustRename

1_BP_NameChg_FWfilt

0_Manu_Planner_FC_FWfilt

1_FGI_NameChg_AVfilt

0_DS_ESG_FWfilt

1_DS_byMS_Union

0_DS_NSG_FWfilt

0_DS_PSG_FWfilt

FC-DS_ESG

FC-DS_NSG

FC-DS_PSG

0_FYFW_31Short_Num

PLANNER_DEMAND_FOR_JUDGED_V

WWWFGI_COB_ PivotData


DFAT – Disti Forecasting Analysis Tool



Objectives

• Analysis of distribution forecasts with respect to business goals, backlog and supply

• Entry of distribution forecast and opportunity data into the Manugistics (Manu) data repository

• Analysis and entry are performed for all region sub-groups across all market segments

• Analysis updates must be completed within one day for both current quarter and next quarter


Tool Components

• User Instrument Correlates FCST and Opportunity with Supply and Backlog

Facilitates entry of forecast quantities

Creates CSV file for use with the loader

• SMC Loader Provides mechanism for batch loading Manu data

Quantities loaded by Sub-group, PSP, PN and Fiscal week


DFAT- Goals

• Incorporate current, company supported data

• Improve analysis of forecast data, including supply component

• Simplify the build of the user instrument

• Provide rapid and accurate updating of forecast and opportunity values

• Provide integrated end-to-end process including report generation of results


DFAT - Improve forecast analysis

• Assemble all relevant data sets in one place

• Ability to compare forecasts to available supply and identify opportunities for revenue improvement

• Ability to rapidly identify gaps between forecast and backlog

• Built-in linearity analysis, by week and month

• Automated algorithms for roll-forward of weekly forecast misses


DFAT - Rapid and accurate analysis


DFAT –Single Build, Wham-whams


DFAT - Time, Accuracy, Output Improvement

Accuracy• Able to match regional forecast to supply/backlog on a weekly basis

• Includes Opportunity complexity not in original process

• Initially possible once or twice a quarter and took 2-days to complete


Logistics Freight Estimator

• Goal: Ability to estimate freight cost per drive by customer and product


Logistics Freight Estimator - Shipment Summary by Carrier Code

Freight Carrier Code Total Gross UnitsShipment %

UPSSCS (CONSOLIDATION) 9,562,079 54%DHL DANZAS (CONSOLIDATION) 3,735,278 21%Feili-TL-Ground 1,955,757 11%UPSSCS (DEFERRED) 730,440 4%DHL DANZAS (DEFERRED) 687,609 4%BIFORST LOGISTICS 448,911 3%UPSSCS (OCEAN) 180,000 1%UPS FWDG-LTL-GROUND 177,480 1%CTS 95,810 1%KWEI 77,306 0%UPS CVEN-FTL-GROUND 26,360 0%UPS CRPS-FTL-GROUND 10,000 0%JIT PULL 8,425 0%UPS FWDG-AIR-2 DAY 2,960 0%UPS EXPRESS 1,963 0%UPS FWDG-FTL-GROUND 900 0%INTEGRATED SHUN HING LOGISTICS 880 0%SHANGHAI LONG DISTANCE Ground 780 0%UPSSCS (EXPRESS) 540 0%UPS CNWY-LTL-GROUND 310 0%UPS 2DAY PM 240 0%DHL DANZAS (OCEAN) 250 0%DHL DANZAS (EXPRESS) 396 0%Others (17) 2,633 0%Total Q2 17,707,307 100%

Inclusion Q2 17,302,037 98%

Products, Distribution Channels, Sales Operations, and Supply Chain Management at Seagate Ming Chao,...

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