2010 State of Supply Chain performance in Semiconductor industry<br />Luc Kremers<br />Principal Supply Chain Consultant<b...
iCognitive, an Expert in Supply Chain Management<br />2<br />BENCHMARKING<br />CONSULTING<br />RESEARCH IN SUPPLY CHAIN<br...
Introduction<br />iCognitive organizes a public Supply Chain Benchmark study annually on behalf of Supply Chain Council:<b...
STUDY APPROACH AND POPULATION PROFILE<br />
Study approach<br />The 2010 State of supply chain performance study in Semiconductor industry was conducted with 52 compa...
Study population profileTotal of 52 respondents, with annual turnover exceeding USD 400 million<br />By geography<br />By ...
Study population profile65% from Middle Management<br />By seniority<br />Senior management, 35%<br />Incl. SCM director, ...
RESULTS OF THE STUDY<br />
Results of the studyTop Supply Chain Concerns<br />In a context of high demand volatility, the top 3 supply chain concerns...
Results of the studyBest Practices employed<br />The top 3 best practices that can improve the demand visibility and colla...
Results of the studySupply Chain Configuration<br />The trend in outsourcing shows the constant disintegration of the semi...
Results of the studyProcess and Organizational Enablers<br />Best-in-class companies have reshaped their organization in a...
Results of the studySupply Chain Knowledge and Human Performance<br />Most of the respondents recognize that their supply ...
Results of the studyTechnology Enablers<br />The top 3 IT tools used by the respondents were mentioned:<br />Forecasting t...
Results of the studySupply Chain Performance Benchmark [1/2]<br />To evaluate the supply chain performance, the participan...
Results of the studySupply Chain Performance Benchmark [2/2]<br />The excellent performance of the best-in-class companies...
Conclusions [1/2]<br />Managing the supply chain has become critical to maintaining a competitive edge in the semiconducto...
Conclusions [2/2]<br />This Study shows that there is a substantial gap between best-in-class performers and median compan...
Thank you<br />For more information please contact us at<br />info@icognitive.com or +65 6325 2810<br />
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2010 State of Supply Chain performance in Semiconductor industry

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2010 State of Supply Chain performance in Semiconductor industry

  1. 1. 2010 State of Supply Chain performance in Semiconductor industry<br />Luc Kremers<br />Principal Supply Chain Consultant<br />
  2. 2. iCognitive, an Expert in Supply Chain Management<br />2<br />BENCHMARKING<br />CONSULTING<br />RESEARCH IN SUPPLY CHAIN<br />TRAINING<br />TECHNOLOGY<br />
  3. 3. Introduction<br />iCognitive organizes a public Supply Chain Benchmark study annually on behalf of Supply Chain Council:<br />Southeast Asia (last 11 years)<br />China (last 6 years)<br />Europe (last 6 years)<br />In addition, each year we focus on a specific industry sector<br />In 2010 this was the Semiconductor Industry<br />
  4. 4. STUDY APPROACH AND POPULATION PROFILE<br />
  5. 5. Study approach<br />The 2010 State of supply chain performance study in Semiconductor industry was conducted with 52 companies with annual turnover exceeding USD 400 million<br />The study was conducted from September to November 2010 by iCognitiveconsultants<br />The Study used the same standard online questionnaire in all countries<br />In addition, telephone interviews were carried out for verification of online results and additional qualitative data<br />
  6. 6. Study population profileTotal of 52 respondents, with annual turnover exceeding USD 400 million<br />By geography<br />By industry segment<br />Assemble/Test/<br />Mark/Pack, 65%<br />
  7. 7. Study population profile65% from Middle Management<br />By seniority<br />Senior management, 35%<br />Incl. SCM director, VP Supply Chain, Operations Director, Head of SCM department etc.<br />Middle management, 65%<br />Incl. SCM manager, (Demand) Planning manager, Logistics Manager, Manager Business Optimization, IT manager etc.<br />
  8. 8. RESULTS OF THE STUDY<br />
  9. 9. Results of the studyTop Supply Chain Concerns<br />In a context of high demand volatility, the top 3 supply chain concerns expressed by the respondents are: <br />Improving the demand forecasting (96%)<br />Increasing the delivery reliability (88%)<br />Reducing the inventory levels (78.5%)<br />“Paradoxically, while the introduction of new product is facing tremendous pressures for the lead time to become as short as possible, the growing outsourcing trend in the semiconductor supply chain is considerably stretching the production and logistics cycle times…”<br />
  10. 10. Results of the studyBest Practices employed<br />The top 3 best practices that can improve the demand visibility and collaboration with supply chain partners are:<br />Supplier’s collaboration (95%)<br />Sales and Operations Planning Process (92%)<br />End-to-end supply chain visibility tool (74.5%)<br />“For the past 40 years, innovation and improvements in the semiconductor industry have been driven by technology, in order to increase the number of chips on wafers for instance, but now there is a clear shift in people mindset about the importance of the supply chain management”<br />
  11. 11. Results of the studySupply Chain Configuration<br />The trend in outsourcing shows the constant disintegration of the semiconductor supply chain for the past 10 years with the emergence of contract services such as design, foundry, assembly & test<br />“In this highly outsourced environment, the discipline of supply chain management has become complex yet critical to control costs and to reduce lead-times within a chain composed of many players: Fabs, tester /assemblers, distribution etc…”<br />Warehousing, 40%<br />Manufacturing, 40%<br />
  12. 12. Results of the studyProcess and Organizational Enablers<br />Best-in-class companies have reshaped their organization in a more customer-centric supply chain supported by master processes such as ‘Customer fulfillment, planning and logistics’ or ‘Customer value chain’, rather than in functions<br />“We can see that the maturity level in this industry is relatively high, especially regarding the collaboration aspect between supply chain partners. One of these large scale initiatives was the RosettaNet project. Even though most of the expectations have not been completely met, it shows the trend… ”<br />
  13. 13. Results of the studySupply Chain Knowledge and Human Performance<br />Most of the respondents recognize that their supply chain organization has an average level with basic knowledge on supply chain<br />Best-in-class companies provide training above 10 times a year generally supported with customized e-learning portal and in-house workshops<br />
  14. 14. Results of the studyTechnology Enablers<br />The top 3 IT tools used by the respondents were mentioned:<br />Forecasting tools (86%)<br />Supplier management portal (75%)<br />Performance measurement (60%)<br />Which technology are you using to support your supply chain operations?<br />“The 3 key components, ie. Investment, Innovation and Information, are all critical but Information is probably the most overlooked yet the most important for collaboration and visibility along the supply chain” <br />
  15. 15. Results of the studySupply Chain Performance Benchmark [1/2]<br />To evaluate the supply chain performance, the participants were asked to describe the performance levels of their supply chain, in terms of reliability, responsiveness, costs and asset management.<br />SCOR level 1 metrics were used to make the results comparable between companies<br />
  16. 16. Results of the studySupply Chain Performance Benchmark [2/2]<br />The excellent performance of the best-in-class companies is due to their end-to-end supply chain which integrates processes and systems with suppliers, customers and partners<br />Note that level 1 SCOR metric ‘total scm cost’ can be further broken down into six components:<br />• SCM IT related cost<br />• SCM Finance related cost<br />• SCM Planning related cost<br />• Inventory carrying cost<br />• Material acquisition cost<br />• Order management cost<br />Benchmark results on these 6 components were also available for the participants<br />
  17. 17. Conclusions [1/2]<br />Managing the supply chain has become critical to maintaining a competitive edge in the semiconductor supply chain<br />Top Supply chain Concerns in Semiconductor industry <br />The top 3 concerns (Improving demand forecasting, Increasing delivery reliability, Reducing inventory levels) are all the direct consequences of the lack of visibility of the demand signal. <br />Inaccurate forecasts generally lead to higher inventory levels and a significant decrease in the service level, due to the inability of the company to plan and align its resources accordingly.<br />Best practices employed<br />The top 3 best practices (Supplier’s collaboration, Sales and Operations Planning Process, End-to-end supply chain visibility tool) are mainly those that can improve the demand visibility and the collaboration with the supply chain partners<br />
  18. 18. Conclusions [2/2]<br />This Study shows that there is a substantial gap between best-in-class performers and median companies when it comes to supply chain management<br />The Study provides practical insights that allows your company to compare itself with others in the industry and identify potential opportunities for improvement<br />By drawing on the broad experience of the participants, the Study provides a perspective that can help your company strengthen its ability to use the supply chain as a key driver of high performance<br />
  19. 19. Thank you<br />For more information please contact us at<br />info@icognitive.com or +65 6325 2810<br />

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