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  1. 1. 12.0 0.0 8.9 12.0 Business Forecasting and Planning 7.18 6.80 summit 7.18 6.80 6.20 6.20 5.00 5.00 Challenges and innovative solutions of Business Forecasting and Planning Amsterdam, March 12th 2010 6.40 6.40 Hans Ehm 8.60 8.60 9.20 9.20
  2. 2. 12.0 0.0 8.9 12.0 7.18 Table of Contents 7.18 6.80 6.80 6.20 6.20   The semiconductor industry - the global production network is the 5.00 new “Fab” 5.00   Learning how to put a dollar sign next to S&OP projects to get upper management approval   Spending less time on data problem discussion and more on decision making   Implementing executive level S&OP education and change management training   Promoting the use of what-if scenario analysis to help manage risk and optimise decision making 6.40 6.40   Executive summary 8.60 8.60 9.20 Mar-15-10 Copyright © Infineon Technologies 2006. All rights reserved. Page 2 9.20
  3. 3. 12.0 0.0 8.9 12.0 7.18 Infineon – products – we produce chips 7.18 6.80 6.80 6.20 6.20 5.00 5.00 NO 6.40 6.40 Zero Calories and 100 Percent Innovation! 8.60 8.60 9.20 17.09.2009 Copyright © Infineon Technologies 2009. All rights reserved. Page 3 9.20
  4. 4. 12.0 0.0 8.9 12.0 7.18 Infineon at a Glance 7.18 6.80 6.80 6.20 6.20 The Company 5.00 5.00   Infineon provides semiconductor and system solutions, focusing on three central needs of our modern society: Energy efficiency, Communications and Security   Revenue in FY 2009: 3.027 billion EUR   Some 26,000 employees worldwide (as of Sept 2009)   Strong technology portfolio with about 22,900 patents and patent applications   More than 30 major R&D locations   Germany‘s largest semiconductor company 6.40 6.40 8.60 8.60 9.20 11/19/2009 17.09.2009 Copyright © Infineon Technologies 2009. 2009. All rights reserved. Copyright © Infineon Technologies All rights reserved. Page 4 9.20
  5. 5. Focus Areas and Target Markets Revenue Split by Focus Area FY 2009 revenue split Industrial & Multimarket Automotive Energy Efficiency: EUR 1744m Communications: Security: EUR 917m EUR 341m Wireless Chip Card Solutions & Security 11/19/2009 Mar-15-10 Copyright © Infineon Technologies 2009. All rights reserved. Page 5
  6. 6. 12.0 0.0 8.9 12.0 The Semiconductor Environment – an Industry Comparison 7.18 (not really serious … but easy to memorize) 7.18 6.80 6.80 6.20 6.20 5.00 5.00 If the automotive and aircraft industries developed at the same rates as semiconductors in the past 30 years:   a Rolls Royce would cost $2.75 and get 3 million miles a gallon   a Boeing 767 would cost $500 and circle the globe in 20 minutes on five gallons of gas. Source: Jeffrey Rayport, professor at Harvard Business School; Co-author of books on strategy in the network economy. 6.40 6.40 Why? 8.60 8.60 9.20 Mar-15-10 Version 1.1 Copyright © Infineon Technologies 2006. All rights reserved. Page 6 of 51 9.20
  7. 7. 12.0 0.0 8.9 12.0 Innovation of the First Transistor on Dec 23rd 1947. 7.18 The Starting Point of the Semiconductor Industry 7.18 6.80 6.80 6.20 5.00 Because and 6.20 5.00 6.40 6.40 Bell Labs 600 Mountain Ave. Murray Hill, NY, USA 8.60 8.60 9.20 Mar-15-10 Version 1.1 Copyright © Infineon Technologies 2006. All rights reserved. Page 7 of 51 9.20
  8. 8. 12.0 0.0 8.9 12.0 Enormous development of semiconductors – 7.18 costs per function decline 30% each year 7.18 6.80 6.80 6.20 6.20 Moore’s Law: 5.00 5.00 Doubling time is 18 months 512 Mbit " 109 minimum feature size [µm] 256 Mbit at microprocessor-chips " 108 ♦ 64 Mbit " 0,1 ♦ Pentium IV 16 Mbit " ♦ Pentium III 107 transistors / " ♦ Pentium II 4 Mbit ♦ 106 80286 " ♦ " ♦ 1 chip 105 Pentium ® ♦ 4004 80486 68000 ♦ 104 8086 80386 ♦ 8080 6.40 6.40 ♦ 10 103 1970 1975 1980 1985 1990 1995 2000 2005 2010 8.60 8.60 Copyright © Infineon Technologies 2009. All rights reserved. Mar- 9.20 Page 8 9.20
  9. 9. 12.0 0.0 8.9 12.0 Semiconductor Characteristics: Steep ramps, short life cycles and long Lead times 7.18 7.18 6.80 % of semiconductors of final product: 6.80 6.20 6.20 2% 12 % 30 % 35-40 % 5.00 5.00 1000 m TV color PC GSM 100 m VCR TV b&w   Steep Product Ramps 10 m   Short Lifecycle 1m Ipod 1950 1960 1970 1980 1990 2000 2010 Sources : Dataquest, ST shown at IEF 2005, Malta (some wording changed) ~ 3 months Suppliers Semiconductor Customer Custo Industry mer of our   Long Lead Time Custo mer & 6.40 Consu   Early in Value Chain 6.40 mer 8.60 ~ 4 months 8.60 9.20 Mar-15-10 For internal use only Copyright © Infineon Technologies 2006. All rights reserved. Page 9 9.20
  10. 10. 12.0 0.0 8.9 12.0 The challenge beyond managing steep ramps is to differentiate between booming products and those slower ramping as 7.18 forecasted - Infineon examples 7.18 6.80 6.80 6.20 6.20 5.00 5.00 40 m P1 ramped faster than forecasted  Risk of missing Business 30 m chance P1 20 m P2 – ramped slower than forecasted  10 m Risk of Stock; Scrap; & Idle Capacity 6.40 6.40 0 Mar 07 June 07 Sep 07 Dec 07 FC Actuals 8.60 8.60 9.20 Copyright © Infineon Technologies 2009. All rights reserved. Page 10 9.20
  11. 11. 12.0 0.0 8.9 12.0 The Main process acc. To SCOR in the Semiconductor Industry is Make “Produce and Test”. It is Grouped into 7.18 Front End and Back End Process Separated by a DieBank 7.18 6.80 6.80 6.20 6.20 5.00 5.00 Front End & Back End Front End (CT 40-100d) Back End (CT 5-20d) CT: Cycle Time FAB SORT DIEBANK ASSEMBLY TEST DC Furnace Sawing Up to 500 Implanting process Deposition Wafertest Die Bonding Chiptest 6.40 steps Stepper Wire Bonding (Burn In) 6.40 Etching Moulding Wetting Trim & Form 8.60 Stock Stock 8.60 9.20 17.09.2009 Copyright © Infineon Technologies 2009. All rights reserved. Page 11 9.20
  12. 12. 12.0 0.0 8.9 12.0 Front End Consists of a Series of Chemical and 7.18 Physical Processes - Basic Process Steps 7.18 6.80 6.80 6.20 6.20 5.00 5.00 Lithography Etching Chemo-Mechanical- Polishing (CMP) Doping (Ion Implantation and Layering: Physical Diffusion) Vapor Deposition Layering: (PVD) Layering: Oxidation Chemical Vapor Deposition 6.40 (CVD) 6.40 Cleaning and control 8.60 8.60 9.20 17.09.2009 Copyright © Infineon Technologies 2009. All rights reserved. Page 12 9.20
  13. 13. 12.0 0.0 8.9 12.0 Up to 35 Revolving Lithography Steps per Wafer 7.18 Transform the Design via Masks to the Wafer … 7.18 6.80 6.80 6.20 6.20 … generating a three dimensional" landscape on the wafer surface 5.00 5.00 Lithography method: one chip after 7 6 another is exposed 5 4 3 2 1 Other processes as etching, doping, layering can change the surface of the wafer permanently on the places that were exposed within Next exposure step – up to 35 revolving steps lithography. 6.40 6.40 Layering, Doping or Etching 8.60 8.60 9.20 17.09.2009 Copyright © Infineon Technologies 2009. All rights reserved. Page 13 9.20
  14. 14. 12.0 0.0 8.9 12.0 The Frontend SC consisting of 500 process steps+ (many are revolving). It runs at a Flow Factor of 2,5 to 3 times the 7.18 raw process time (base is 365 days a year 24 hours a day) 7.18 6.80 6.80 6.20 6.20 FURNACE - Oxid IMPLANT Defect Density DRY ETCHING PVD - Sputtering 5.00 5.00 START   CT: Cycle Time SORT   RPT: Raw Process Time 6.40 6.40 CMP WET METROLOGY * LITHOGRAPHY CVD * one test step after lithography 8.60 8.60 9.20 17.09.2009 Copyright © Infineon Technologies 2009. All rights reserved. Page 14 9.20
  15. 15. 12.0 0.0 8.9 12.0 Backend Process: 7.18 From Chip at Die Bank to Finished Good 7.18 6.80 6.80 6.20 6.20 5.00 5.00 Wafer & Material Die Wire Trim Mark Tube Saw Mold Plate Singl Test Pack Attach Bond Form Scan ASSEMBLY PROCESS TESTING PROCESS Tray Tape 6.40 6.40 Finished Goods 8.60 8.60 9.20 Mar-15-10 Copyright © Infineon Technologies 2006. All rights reserved. Page 15 9.20
  16. 16. 12.0 0.0 8.9 12.0 IFX today has a global production network comprising Frontend, Backend, Sifos and Subcons 7.18 7.18 6.80 6.80 6.20 6.20 5.00 Malacca 5.00 Wuxi ALTIS SMIC Nantong ASE AMKOR Zarlink UMC Dresden Kulim Batam Triquint TSMC Singapore Regensburg Warstein Cegléd Villach PSI IBM STATSChipPAC Unisem CHRT Carsem UTAC 6.40 6.40 SIFO SUBCON FE 8.60 8.60 BE 9.20 17.09.2009 Copyright © Infineon Technologies 2009. All rights reserved. Page 16 9.20
  17. 17. 12.0 0.0 8.9 12.0 Fast product ramps in the past required mainly to manage internal Frontend SC fast and cost efficient 7.18 7.18 6.80 6.80 6.20 6.20 FURNACE IMPLANT Defect Density ETCHING PVD 5.00 5.00 Fab Dresden - GE START SORT 6.40 6.40 CMP WET METROLOGY * LITHOGRAPHY CVD 8.60 * test step according to lithography 8.60 9.20 17.09.2009 Copyright © Infineon Technologies 2009. All rights reserved. Page 17 9.20
  18. 18. 12.0 0.0 8.9 12.0 Today’s ramps benefit from a global production flexibility – The global SC is our new “Fab” 7.18 7.18 6.80 6.80 May08 additionalchain wasSORT(ASE) ~(sort at WOPW 6000 out Aug07:(Plan): otherfabcapa ~(sort at subcon 000 SIN)WOPW via July07: ", additional assy and Test(ASE)Assy9000 Wafer Sep07: Flex:technical possiblestep inWafer 200winWOPWout WOPW April07:flexbumpingASE (Altis)~ DDWaferproductive out Mar07: only 2ndbumping &2nd(UMC8D) WaferAMKOR and July07: and additional Fab flexibilityis June07:additional routes + 3600 & Bump alternative Fab Each new supplyFE test subconbump SIN 103100 customers 6.20 Feb07:Wafer out assy capaa 1600forwardout 10 SC July07: additional with this ~ 170 Wafer ~ to out 000 Wafer Aug07: aditionnaltest + subcon 5300 ~ out 2800 June07:", and other routes first (AMKOR) out ~ Wafer ~ Jan08: ASE … WOPW ALTIS) delivering (Unitive was the bottleneck) ~ 300 ~ 7500 established ALTIS 6.20 capa increase in less than one year 5.00 5.00 Fab Germany Fab Bumping B) Taiwan Assy Philipines SORT after Assy SIN Ship from SIN Taiwan Bump Altis - FR Start DCA DCU DCE 6.40 Bumping A) SORT after SORT after Assy Final Test SIN) 6.40 Fab France Taiwan Bump Germany Bump SIN Stock DCx Taiwan IFX Asset Fab Test (SORT&FinalTest) Not shown is Final Test Flex Bumping Assembly within 8.60 Subcon or SiFo 8.60 Singapore 9.20 Mar-15-10 Version 1.1 Copyright © Infineon Technologies 2006. All rights reserved. Page 18 of 51 9.20
  19. 19. 12.0 0.0 8.9 12.0 A Top to Bottom S&OP Process is a key enabler to 7.18 master this complexity, flexibility and speed requirements 7.18 6.80 6.80 Actuals (Billings, 6.20 6.20 Orders, Reservations) Customer -Target: unconstrained FC Unconstrained Forecasts 1) S&OP Demand Marketing -Horizon: 12m Planning Marketing 5.00 Sales Planning Forecasts -Gran: m/Rroduct (=Requests) (PPOS) 5.00 PLANNING Sales Forecasts (VRFC) (Actual & Past) -Target: constrained FC committed capa. -Horizon: 12m -Gran: w/FPOS/PL Sales Forecasts of next Volume & Capacity 3) S&OP CAPACITY -Target: supply plan for order commit month & Constrained Planning (VRFC) Forecasts PLANNING -Horizon:Constrained 26w, >26w infinite Forecasts Forecasts & -Gran: d,w/FP (=Promises) Capacity Allocation Allocations <= Today / GIT (d/FP) <= BE FF (w/FP) &Orders Process Reservations <= FE FF (w/FP based on Die Rep) Operational Planning 26w (w/FP based on FPOS) -Target: order <= Requests confirmation to Promises Production Delivery customer Requests Promises -Horizon: 52w 4) S&OP SUPPLY from plants -Gran: d/SP PLANNING -Target: min & max target SAP FEST Sub- BEST Sub- stocks Process Process Module SD -Horizon: a) 12m; b) 12w -Gran: a) m/FPOS; b) w/FP 6.40 -Work-In-Progress Master Master Orders &5) ORDER Reservations Confirmations 6.40 -Actual DB/DC Stocks Plan FE Plan BE 2) S&OP PRODUCTION -Min/Max Stock Targets MANAGEMENT MANAGEMENT & INVENTORY Frontend HANDLING Backend 8.60 8.60 9.20 Mar-15-10 Copyright © Infineon Technologies 2006. All rights reserved. Page 19 9.20
  20. 20. 12.0 0.0 8.9 12.0 7.18 Table of Contents 7.18 6.80 6.80 6.20 6.20   The semiconductor industry - the global production network is the 5.00 new “Fab” 5.00   Learning how to put a dollar sign next to S&OP projects to get upper management approval   Spending less time on data problem discussion and more on decision making   Implementing executive level S&OP education and change management training   Promoting the use of what-if scenario analysis to help manage risk and optimise decision making 6.40 6.40   Executive summary 8.60 8.60 9.20 Mar-15-10 Version 1.1 Copyright © Infineon Technologies 2006. All rights reserved. Page 20 of 51 9.20
  21. 21. 12.0 0.0 8.9 12.0 Improved F/C Accuracy is the target of S&OP and by far the cheapest way to handle Uncertainty 7.18 1) A $ Sign of missing forecast accuracy 7.18 6.80 6.80 6.20 6.20 Time horizon 1-3 months 4-6 months 7-12 months 5.00 5.00 Wrong product mix: Backend capacity: Frontend capacity: -  increased stocks - underutilization - underutilization Mechanism -  scrap - subcontractor cost - foundry cost adder -  missed adder opportunities Cost vs 100% FC accuracy ~xb’ € ~ yb’ € ~ zb’ € Cost Vs 100% FC 6.40 accuracy 6.40 ~xxb’ € 8.60 8.60 9.20 17.09.2009 Copyright © Infineon Technologies 2009. All rights reserved. Page 21 9.20
  22. 22. 12.0 0.0 8.9 12.0 Improved F/C Accuracy is the target of S&OP and by far the cheapest way to handle Uncertainty 7.18 2) Measure Forecast Accuracy 7.18 6.80 6.80 6.20   FC accuracy is the deviation of the Sales FC vs actual billings. 6.20 5.00   Symmetric Mean Absolute Percentage Error (SMAPE): 5.00   Example: 1.) Calculation of positive & negative balance 2.) Summation of Forecast, Billings 4.) F/C Accuracy acc. and Balance is 100% minus absolute of positive and negative Percentage 6.40 3.) Percentage of 6.40 Balance to Sum of Forecast & Billings 8.60 8.60 9.20 17.09.2009 Copyright © Infineon Technologies 2009. All rights reserved. Page 22 9.20
  23. 23. 12.0 0.0 8.9 12.0 Improved F/C Accuracy is the target of S&OP and by far the cheapest way to handle Uncertainty - a $ sign helps 7.18 3) Set up a process – an example 7.18 6.80 6.80 6.20 6.20 1.  Analyze historical data per division, region, sales planner and 5.00 customer. 5.00 2.  Set target based on experience/best engineering judgment (e.g. 30% of sales planner achieve 80% accuracy, why not the rest?) 3.  Calculate the potential Euro savings if target is achieved per division, region, sales planner and customer. 4.  Monthly reporting (performance, potential Euro savings and rough analysis per customer and per sales planner) 5.  Monthly alignment Division/Sales/Supply Chain and definition of major action items. 6.40 6.40 8.60 8.60 9.20 17.09.2009 Copyright © Infineon Technologies 2009. All rights reserved. Page 23 9.20
  24. 24. 12.0 0.0 8.9 12.0 Improved F/C Accuracy is the target of S&OP and by far the cheapest way to handle Uncertainty – a$ sign helps 7.18 4) Implement process and reporting 7.18 6.80 6.80 6.20 6.20 5.00 5.00 FC – accuracy FC – accuracy per DIVISION per REGION Target Potential per Sales Planner in region AP Over-planning Target Potential 6.40 per DIVISION per SALES PLANNER 6.40 8.60 8.60 9.20 17.09.2009 Copyright © Infineon Technologies 2009. All rights reserved. Page 24 9.20
  25. 25. 12.0 0.0 8.9 12.0 Improved F/C Accuracy is the target of S&OP and by far the cheapest way to handle Uncertainty – a$ sign helps 7.18 5) Get achievements and … 7.18 6.80 6.80 6.20   FC accuracy improved by ~10% within 15 months 6.20 5.00   The improved FC accuracy leads to a saving of XY’ Euro 5.00 Time horizon 1-3 months 4-6 months 7-12 months ~ xa‘ € ~xb‘ ya‘ ~ yb‘ € ~ za‘ € ~ zb Cost Impact after impact Improvement reference 6.40 xxb‘ € xxa‘ 6.40 * gross stock value DB+DC @ 15% capital cost 8.60 8.60 9.20 17.09.2009 Copyright © Infineon Technologies 2009. All rights reserved. Page 25 9.20
  26. 26. 12.0 0.0 8.9 12.0 7.18 Table of Contents 7.18 6.80 6.80 6.20 6.20   The semiconductor industry - the global production network is the 5.00 new “Fab” 5.00   Learning how to put a dollar sign next to S&OP projects to get upper management approval   Spending less time on data problem discussion and more on decision making   Implementing executive level S&OP education and change management training   Promoting the use of what-if scenario analysis to help manage risk and optimise decision making 6.40 6.40   Executive summary 8.60 8.60 9.20 Mar-15-10 Version 1.1 Copyright © Infineon Technologies 2006. All rights reserved. Page 26 of 51 9.20
  27. 27. 12.0 0.0 8.9 12.0 One responsibility to manage the whole supply chain. S&OP within the SCC SCORE process is within Plan 7.18 7.18 6.80 6.80 6.20 Plan 6.20 Source Make Deliver 5.00 5.00 Return Return Customers Wafer stock FAB SORT DIE BANK ASSEMBLY TEST DC Consi Furnace Sawing Implanting Deposition Wafertest Die Bonding Chiptest Stepper Sawing Wire Bonding (Burn In) Etching Molding Wetting Trim & Form Buffer / Up to 500 process Buffer / Buffer / Buffer / steps Stock Stock Stock Stock Infineon Supplier Operations: Market:   Efficient use of resources   diversification of product types   Capital cost reduction idle costs/excess inventory   small batches 6.40   no scrap, damage & relocation   fast time-to-customer/market 6.40 ONE RESPONSIBILITY 8.60 8.60 9.20 Mar-15-10 Version 1.1 Copyright © Infineon Technologies 2006. All rights reserved. Page 27 of 51 9.20
  28. 28. 12.0 0.0 8.9 12.0 Integrated Master Data Elements is a Key enabler for efficiency between S&OP and Production 7.18 7.18 6.80 6.80 6.20 Production View 6.20 Planning Item PPOS 5.00 aggregated identifier Manufacturing Item 5.00 that reflects capacity product & manufacturing route, and demand planning used in for capacity planning requirements FPOS Die-Representative FREP Aggreg. supply RFP element; diversification RFP Product not yet decided planning product being DREP not capacity relevant SP Sales Product can be ordered by a customer FP Finished Product independent of DC-BNR storage location 6.40 DC BNR finished product 6.40 S&OP View by storage location 8.60 8.60 9.20 17.09.2009 Copyright © Infineon Technologies 2009. All rights reserved. Page 28 9.20
  29. 29. 12.0 0.0 8.9 12.0 7.18 Table of Contents 7.18 6.80 6.80 6.20 6.20   The semiconductor industry - the global production network ist 5.00 the new “Fab” 5.00   Learning how to put a dollar sign next to S&OP projects to get upper management approval   Spending less time on data problem discussion and more on decision making   Implementing executive level S&OP education and change management training   Promoting the use of what-if scenario analysis to help manage risk and optimise decision making 6.40 6.40   Executive summary 8.60 8.60 9.20 17.09.2009 Copyright © Infineon Technologies 2009. All rights reserved. Page 29 9.20
  30. 30. 12.0 0.0 8.9 12.0 7.18 6.80 6.20 Supply Chain Academy 7.18 6.80 6.20 5.00 5.00 The next generation of learning, teaching and knowledge gaining:   Training modules for the needed Know How for all personnel   Globally same Processes, Tools and Know How   Common understanding of S&OP and the entire Supply Chain 6.40 6.40 8.60 8.60 9.20 9.20
  31. 31. 12.0 0.0 8.9 12.0 7.18 Basic Set Up of IFX SC Academy 7.18 6.80 6.80 6.20   Highest level Structure is according to Demand to Cash = SCOR 6.20 5.00 Model – the international Standard for Supply Chains: 5.00 Plan - Source - Make - Deliver – Return – Enabler   Most detailed level is usually an intranet based e-learning module – called the Training module (TM):   “intranet session” (about 20 min) with voice and animation.   Training Modules are pushed via an e-Learning Tool to the employees. There are checks, if the target of training was achieved via review questions.   Each TM is owned by an expert. He defines the target of each TM, usually produces it and defines the review questions. 6.40 6.40   Group of training modules will be supplemented via a class room training including serious games 8.60 8.60 9.20 Mar-15-10 For internal use only Copyright © Infineon Technologies 2006. All rights reserved. Page 31 9.20
  32. 32. 12.0 0.0 8.9 12.0 Each Classroom training includes a „Serious Game“ Most often the Beer Game for the Bullwhip effect 7.18 http://davinci.tamu.edu/beergame/v2/ 7.18 6.80 6.80 6.20 6.20 5.00 5.00 6.40 6.40 8.60 8.60 9.20 Mar-15-10 For internal use only Copyright © Infineon Technologies 2006. All rights reserved. Page 32 9.20
  33. 33. 12.0 0.0 8.9 12.0 Supply Chain Academy embedded in a Partnership Concept ensures executive level attention and trust in 7.18 necessary changes 7.18 6.80 6.80 6.20   The SC Academy uses internationally available training modules for 6.20 5.00 Supply Chain (incl. S&OP) for semiconductor and operations research. 5.00 Input from the Network Output to the Network Training sessions; Consulting Set standards; be part of academic education   The SC Academy works on integrating the courses into academic programs with the target to extend the internal appraisals (Career development) to external academic recognition – for a contribution 6.40 to a bachelor’s, master’s, or Ph.D. degree. (ECTS – European Credit 6.40 Transfer and Accumulation System).   Bachelor of SC from University of Limerick starting April 12 8.60 8.60 9.20 Mar-15-10 For internal use only Copyright © Infineon Technologies 2006. All rights reserved. Page 33 9.20
  34. 34. 12.0 0.0 8.9 12.0 Get executives to conferences to exchange 7.18 ideas Trust in standards is increasing 7.18 6.80 6.80 6.20 6.20   is just great 5.00 5.00   Supply Chain Council – the SCOR standard Key note from Prof Hau Lee – 6.40 Stanford: 6.40 His paper: “Information Distortion in a Supply Chain: The Bullwhip Effect” voted as one of the most important papers in business 8.60 science ever 8.60 9.20 Mar-15-10 For internal use only Copyright © Infineon Technologies 2006. All rights reserved. Page 34 9.20
  35. 35. 12.0 0.0 8.9 12.0 7.18 Table of Contents 7.18 6.80 6.80 6.20 6.20   The semiconductor industry - the global production network ist 5.00 the new “Fab” 5.00   Learning how to put a dollar sign next to S&OP projects to get upper management approval   Spending less time on data problem discussion and more on decision making   Implementing executive level S&OP education and change management training   Promoting the use of what-if scenario analysis to help manage risk and optimise decision making 6.40 6.40   Executive summary 8.60 8.60 9.20 Mar-15-10 Copyright © Infineon Technologies 2006. All rights reserved. Page 35 9.20
  36. 36. 12.0 0.0 8.9 12.0 What – If scenario Could have a significant scrap be reduced based on 7.18 available information?  No, people did a good job 7.18 6.80 Example of real and simulated inventory of one product with a sudden 6.80 drop of demand - simulated based on available Forecast and a given 6.20 6.20 5.00 leadtime of 16 weeks  Despite best out of the given situation XY’0 5.00 € needed to be scrapped Real Stock Development (16w FE+BE leadtime) Simul stock development (16w FE+BE leadtime) € Scrap of >XY‘0 € 6.40 6.40 Time 8.60 8.60 9.20 22.05.2007 Page 36 9.20
  37. 37. 12.0 0.0 8.9 12.0 What – If scenario but a significant scrap could have been reduced if we 7.18 were faster  Start a speed program 7.18 6.80 6.80 6.20 Inventory development – real/simulated of 16 weeks 6.20 compared to 8 weeks one product  80% less scrap 5.00 5.00 Real Stock Development Simul. stock development (16w FE+BE leadtime) (8w FE+BE leadtime) Simul. stock development (16w FE+BE leadtime) € >80% less Scrap if 8 weeks faster  2 weeks 6.40 faster ~ Z‘0 € 6.40 for scrap Time 8.60 8.60 9.20 22.05.2007 Page 37 9.20
  38. 38. 12.0 0.0 8.9 12.0 Speed program - Strategy is to increase our speed to 7.18 customer and reduce FG inventory levels (postponement) 7.18 6.80 6.80 6.20 6.20 „All mistakes in forecasting end up in an inventory problem - 5.00 either lack of products (allocation) in an upturn or excess 5.00 inventory in a downturn“   ~50% value add in Backend   Reduce Finished Wafer stock FAB SORT DIE BANK ASSY TEST DC Goods inventory Buffer/ Buffer/ Buffer/ levels. Stock Stock Stock   Further increase Build to Forecast Make to Order speed from Diebank to customer. Inc. SPEED from DIEBANK   Reduce overall CT Frontend: 2-3 Months CT Backend: 3-5 Weeks leadtime. 6.40 6.40 Diversification is taking place during Backend Production! 8.60 Diebank (Semi 8.60 finished Goods Finished Goods 9.20 22.05.2007 Page 38 9.20
  39. 39. 12.0 0.0 8.9 12.0 7.18 Table of Contents 7.18 6.80 6.80 6.20 6.20   The semiconductor industry - the global production network is the 5.00 new “Fab” 5.00   Learning how to put a dollar sign next to S&OP projects to get upper management approval   Spending less time on data problem discussion and more on decision making   Implementing executive level S&OP education and change management training   Promoting the use of what-if scenario analysis to help manage risk and optimise decision making 6.40 6.40   Executive summary 8.60 8.60 9.20 Mar-15-10 Copyright © Infineon Technologies 2006. All rights reserved. Page 39 9.20
  40. 40. 12.0 0.0 8.9 12.0 7.18 Executive summary 7.18 6.80 6.80 6.20   The (semiconductor) innovation race extends further to global 6.20 5.00 collaborative supply chains; Past challenges amplified and became 5.00 future ones (Globalization, Flexibility, Speed)   Improved S&O Forecast is by far the cheapest way (a$ sign helps!) to save costs and increase revenue – significant improvements are possible via systematic measurement, root cause analysis and operational excellence - solved data and process problems improves decision quality   Education, simulation and serious games are key enablers to bring theoretical possible improvements into business success 6.40 6.40 8.60 8.60 9.20 Mar-15-10 Copyright © Infineon Technologies 2006. All rights reserved. Page 40 9.20
  41. 41. 12.0 0.0 8.9 12.0 7.18 7.18 6.80 6.80 6.20 6.20 5.00 5.00 Questions ? 6.40 6.40 8.60 8.60 9.20 Mar-15-10 Copyright © Infineon Technologies 2006. All rights reserved. Page 41 9.20

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