Semi Conductor Webinar
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Transcript of Semi Conductor Webinar
LEARN THE INSIDE SECRETS OF THREE SEMICONDOCUTOR MANUFACTURING COMPANIES
Michael HartmanBristlecone, Field Marketing
Saroj Tripathi Bristlecone, Principal
Mark Schenecker SAP, High Tech Industry Principal
September 24, 2009
Introduction Semiconductor / Component Industry Overview
Inside SecretsGennum Silicon Labs Semico3
ClosingQ&A
Agenda
OEM EndCustomers
Engineering/NPI
Sales &Marketing
Front End(Wafer Fab/Sort)
Back-End(Assy/Test)
HQ
Complex Demand Management Volatile, unforeseen changes in demand Diverse mix of channels, contract
mfgs and OEMs High service level requirements through models such as VMI
Supply Chain Ops
Financial, Risk and Compliance Management SOX, SOD Reporting RoHS, WEEE environmental regs Global Trade compliance Manual consolidations and financial reporting
Lack of Visibility and Control of Global Supply Chain Inability to manage outsource options and gain flexibility Long, complex manufacturing processes, with varied outputs Infrastructure does not scale - manual efforts become an Issue Lack of manufacturing status & visibility for WIP, yield, costs…
Limited Ability to Execute Multi-Channel Sales and Service Strategy Conflicting direct, eComm and channel strategies Limited channel inventory visibility, Complex claims, ship & debit, rev rec, price protection Complex sales win processes Distributors & Retailers
Semiconductor Challenges Today
Distributors
EndCustomers
Sales &Marketing
Back-End(Chip Assy/Test) HQ
Integrated Multi - Channel Management Customer interaction, eService, eCommerce sales Channel inventory tracking, POS & reconciliation Ship & Debit claims automation, integrated revenue
recognition and price protection Design registration and opportunity management
Integrated Risk and Compliance Management SOX access & process controls Integrated RoHS, WEEE Global Trade compliance management Consolidations and flexible financial
reporting.
Engineering/NPI
Supply Chain Ops
Semi Objectives Uniquely Enabled by SAP
Front End(Wafer Fab/Sort)
Global Supply Chain Visibility and Control Intelligent manufacturing execution providing visibility to manufacturing status and data integration Lot tracking, genealogy, WIP, yield, and complex costing Spend Data & Visualization, outsource Manufacturing
Rapid Demand Response & Planning Real-time integrated CTP (Capable to Promise) and backlog management Unique binning & supply matching Demand driven VMI and fulfillment tracking capabilities
Distributors
EndCustomers
Sales &Marketing
Back-End(Chip Assy/Test) HQ
Integrated Multi - Channel Management Customer interaction, eService, eCommerce sales Channel inventory tracking, POS & reconciliation Ship & Debit claims automation, integrated revenue
recognition and price protection Design registration and opportunity management
Integrated Risk and Compliance Management SOX access & process controls Integrated RoHS, WEEE Global Trade compliance management Consolidations and flexible financial
reporting.
Engineering/NPI
Supply Chain Ops
Semi Objectives Uniquely Enabled by SAP
Front End(Wafer Fab/Sort)
Global Supply Chain Visibility and Control Intelligent manufacturing execution providing visibility to manufacturing status and data integration Lot tracking, genealogy, WIP, yield, and complex costing Spend Data & Visualization, outsource Manufacturing
Rapid Demand Response & Planning Real-time integrated CTP (Capable to Promise) and backlog management Unique binning & supply matching Demand driven VMI and fulfillment tracking capabilities
Rapid Demand ResponseLSI: Reduced lead times & planning cycles, Increased inventory turnsFreescale: Improved forecast accuracy by 10%, reduced order planning by 1 week
Corporate Performance &Compliance MgmtBroadcom: 2 Month implementation with significant results, cut forecasting cycle 5 to 2 daysTexas Instruments: Reduced global compliance data 70%, & Increased compliant shipments by 90%
Integrated Sales &Integrated Sales &Channel ManagementRenasas: Greatly enhanced distributor experience, full automation of channel sales trackingConexant: ROI in first 6 months with over 3 Million in savings through channel solution
Manufacturing Execution& VisibilityNVIDIA: Removed all manual spreadsheet processes, scaled growth through SAPSilicon Labs: Integrated all operational activities onto one solution
Certified, Pre-Configured Certified, Pre-Configured Semiconductor SolutionGennum: 10 month implementation of 117 business processes
Introduction Semiconductor / Component Industry Overview
Inside SecretsGennum Silicon Labs Semico3
ClosingQ&A
Agenda
7
The Need For Change
Changing business model, focus on: More and faster product development Globalization (Design, Sales, FAEs)Outsourced manufacturing (global supply chain)Inadequate supporting infrastructure: Lack of integration of key business systems (i.e. ERP, CRM, HRIS, Project Systems, Quality, Engineering) Lack of global deployment of business systems Analysis, reporting and exceptions handled outside of system Losing systems and key user knowledge over timeImpacting: Ability to make the best business decisions in a timely manner Overall productivity
“LEAD WITH SPEED”
Highlights from Annual ASUG 2009 Presentation by Gennum
8
The Proposed SolutionReplace ERP and most stand alone systems with a single fully integrated
ERP solution: SAPMinimize customization Adopt SAP best practices Target <20% Gennum workflow specificEngage implementation partners with semiconductor experience Phased implementation approach Phase 1: full business functionality Phase 2: advanced reporting and analyticsGET IT DONE: target 10 month implementation
Highlights from Annual ASUG 2009 Presentation by Gennum
9
Key Benefits and KPI’s
Effective and Efficient Decision Making Integration of information systems Single source of information Improved quality and accessibility of data Improved synthesis and reporting of information Better visibility of operational performanceScalability and ProductivityMany functions (transactions, data mining etc) require direct labor, impacts ability to scale Integration and automation through SAP enables scalabilityDirect positive impact on SG&A as we grow Enables redeployment of labor to higher value-add functionsFinancial Impact Expected expense/cash savings, e.g., reduced legacy systems licenses, reduced transportation costs
Highlights from Annual ASUG 2009 Presentation by Gennum
10
Key Learning Points on Rapid DeploymentSolution went live on time, with some significant team effort to do so. As a result of leveraging the Preconfigured Semiconductor Solution: Blueprinting is really a validation exercise versus the typical discovery/definition
exercise Should have invested more upfront in:
– Functional lead training on basic SAP– More robust data sets so validation of business fit could more easily occur
Only add “new processes” that have true business need Training and Change Management:
Ability to absorb change is directly attributable to level (frequency and duration) of exposure to new systems
Team Unity: Respect and reflect truly global team regardless of badges or nationality.
Highlights from Annual ASUG 2009 Presentation by Gennum
Introduction Semiconductor / Component Industry Overview
Inside SecretsGennum Silicon Labs Semico3
ClosingQ&A
Agenda
12
Case for Change
Acquisition pushed current infrastructure past its capabilities: Lack of flexibility Inability to scaleNeeded platform for the future: Better support:
Future acquisitions/divestitures Changing business models
Audit concerns for excel based financial processesCost of integration in best of breed approachPlan was to implement a core ERP platform of SAP to handle all financial and business transactions in a typical project approach of blueprinting, etc with one major exception: Simultaneous rollout of all functionality versus phasing it in.
13
Return on Investment (Benefits Achieved)
Consolidation on a single platform:Retired 4 legacy applicationsReduced custom software footprint Improved integration between logistics and financial applications Simplified financial close Improved security and controls infrastructure Established platform for future growthImproved application coverage:Cost accounting is no longer based on spreadsheetsWorkflow-enabled purchase requisition approvalDenied party screening Improved channel management processing
14
Best Practices: Things We Did Well
Commitment from all levels of managementCompany wide communicationHired SAP-skilled IT resourcesProvided training for the project teamExtensive training program for end-users2 conversion dry-runs prior to actual conversionWent live at the beginning of a financial quarter
15
Lessons Learned
Prepare the management team for turbulence at go-live Engage all levels of management throughout
Turn super users into superheroes Choose the business reps carefully Staff project team in accordance with the project scope Don’t house the project off-campus
Live with an 80% fit to keep the project within timeline and budgetDo something to ensure that end users attend training
Certification program
Introduction Semiconductor / Component Industry Overview
Inside SecretsGennum Silicon Labs Semico3
ClosingQ&A
Agenda
Case for Change
Need to improve Time to Market for a growing company. Witnessed erosion in market share due to its inability to launch new products at
regular intervalsThe company made a strategic business decision to outsource
manufacturing.Challenge to align the company to a new “mind set” Better coordination with outsourcing partnersOperational challenges were the traditional ones:Different groups running with “their” numbersCommon terminology, uncommon meaningsHigh demand fluctuations with shortening product lifecycles Supplier base complexity increasing
SEMICO3
Plan of Action
Selected SAP suite of applications to improve time to market and supplier collaboration:
Key criteria: Depth and flexibility of SAP applications to support semiconductor industry challenges
Focus on enabling supply chain capabilities: SAP Advanced Planning and Optimization (APO)Closely followed with streamlining supplier collaboration: SAP Supplier Network Collaboration (SNC)Many sessions conducted across the organization to generate buy-in to the
“new” systems: Level of solution validation high also based on company’s depth of SAP expertiseHelp align the systems with the new business processes
SEMICO3
Results
The company achieved full production levels within a week of go-live.The company was able to transition successfully to an outsourced
manufacturing model.A key characteristic of the successful effort: Strong company business lead to work collaboratively with a very experienced
deployment team.Points to consider for your own effort: Picking a direction is more important than consensus.Replicating current functionality in a new system is NOT a benefit. Introducing scope changes, no matter how small, ALWAYS has unintended
consequences.
SEMICO3
Introduction Semiconductor / Component Industry Overview
Inside SecretsGennum Silicon Labs Semico3
ClosingQ&A
Agenda
Summary
There are common elements that were the inside secret to their success: Integrating business owners early and continuously Configuring the solution, not customizing for a complete ‘no workaround’ solution
Validate fit and applicability of the preconfigured processes Inherent, out-of-the box integrated business processes
Q & A
For more information…. Or come see us next week at Booth 109….www.sap.com/usa/semiconductor
Michael HartmanBristlecone, Field [email protected]
Saroj TripathiBristlecone, [email protected]
Mark Schenecker SAP, High Tech Industry Principal [email protected]
© SAP 2007 / Page 22
EMERGING OPPORTUNITIES EXPO & CONFERENCEDATE: October 1, 2009LOCATION: Santa Clara, CA, US