Applied Materials builds specialized manufacturing equipment containing over 2,000 components sourced from 400 global suppliers. They sought a solution to improve inbound delivery accuracy, reduce inventory costs, and handle over 30,000 purchase order changes weekly. TAKE developed a tailored supply chain collaboration solution integrating demand planning, procurement, shipping, and vendor managed inventory. This provided real-time visibility and control from initial order through just-in-time delivery, reducing costs by $22 million with a nearly 500% ROI.

1. Customer Focus
Applied Materials builds large, highly-specialized silicon wafer and solar film
manufacturing equipment for leading semiconductor companies. Customer
order fulfillment is predicated on short lead times, and each final assembly is a
unique build with an average bill of materials (BOM) containing more than
2000 components. Approximately 75% of BOM parts are directly sourced from
multiple suppliers.
Procuring the parts to manufacture this complex equipment can involve as
many as 25,000 purchase orders in process at any time. Updates to
manufacturing requirements planning (MRP) can drive over 30,000 changes to
the suggested date and quantity on open purchase order lines per week. All
order and order change information must be seamlessly communicated to a
global supply chain of more than 400 OEM suppliers and contract
manufacturers with diverse technology integration capabilities.
Applied Materials sought a solution that would deliver improved accuracy of
inbound deliveries in key areas of time, freight levels, quality and quantity,
while reducing inventory levels and costs throughout the direct spend
procurement process.
Applied Materials Challenge
$22M in savings, and
counting–global manufacturer
recoginized as industry leader for
innovative supply chain processes
and controls.
Success Summary
Company Overview
For more than 40 years, Applied
Materials has provided innovative
equipment, services and software
to enable the manufacture of
advanced semiconductor, flat panel
display and solar photovoltaic
products. Applied’s technologies
help make innovations like
smartphones, flat screen TVs and
solar panels more affordable and
accessible to consumers and
businesses around the world.
Applied Materials turns today’s
innovations into the industries of
tomorrow. Applied Materials has
deployed TAKE Solutions’products
since 1998.
“The speed, cost and quality of information moving between customers
and suppliers is critical to meeting the demands of our end customer.”
– Wendy Reyes, Materials Project Manager, Worldwide Operations, Applied
Materials
Reduction in
order and
change
processing
time.
60%

2. Results
Awards
About TAKE Supply Chain
As a result of implementing TAKE’s tailored supply chain collaboration
solution, Applied Materials has realized $22 million in savings with an
ROI of nearly 500% and $2.5 million in recurring annualized savings.
Integration throughout demand planning, shipments and supply, and
product engineering enabled saving across the enterprise.
2011 PM100 Progressive Manufacturing Award
High Achiever - Supply Network Mastery
10-15% increase in on-time delivery.
30% reduction in premium freight costs.
25-30% reduction in receiving discrepancies.
15-25% increase in warehouse efficiency.
33% reduction in warehouse space.
20-40% reduction in inventory.
Approaching 100% quality control
compliance.
For more than a decade, TAKE Supply Chain has been selected by
leading companies across the globe for solutions that deliver
increased accuracy, visibility and responsiveness across their supply
chains. We offer robust collaboration and data collection solutions
that leverage existing and emerging technology to support the
increased challenges of expanding global supply chains. Together
with our customers, we are regular recipients of supply chain industry
awards for technology, value and innovation.
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TAKE’s Solution
TAKE developed a tailored supply chain collaboration
solution for Applied Materials that delivered accurate,
real-time information and enhanced controls from the
initial order to just-in-time parts delivery for consumption
on the manufacturing shop floor. Xtended Process Control
(X.PC), part of TAKE’s OneSCM® Collaboration Suite, was
selected for its demand planning, procurement, shipping
control and vendor managed inventory functionality. In
addition, X.PC provided for tight integration with Applied
Materials’ERP data–retaining a single system of record as
well as allowing for Applied Materials’business rules to be
extended further into the supply base.
Demand Collaborator was installed to enable agile strategic
sourcing. The module provides 12-month forecast
visibility and collaboration with suppliers, including
supplier WIP and inventory visibility, to identify and adjust
for potential shortages months before they occur.
Purchase Order Collaborator was installed to increase the
visibility of purchasing data and make it more actionable
throughout the procurement process. Applied Materials is
able to release and approve purchase orders, review
supplier acknowledgements, apply rule-based MRP
changes to open orders, approve supplier changes and
collaborate on delivery dates, freight service levels and
pricing.
Shipping Controls were implemented to ensure supplier
conformance to shipping requirements into the Vendor
Managed Inventory Depot (VMID). Suppliers are
restricted from printing the order’s barcoded label with a
Package Tracking Number (PTN) until it meets the correct
date window, passes First Article Inspection, and uses an
approved freight level.
Vendor Managed Inventory Depot and Release was
installed to support on-demand materials delivery. A
manufacturing demand pulse is sent to VMID that
triggers order fulfillment through a third-party logistics
provider who delivers parts just-in-time based on daily
assembly line scheduling.