Laura L. Dionne, Senior Director of Global Planning (Retiring) at Qorvo (TriQuint) Semiconductor, discusses similarities between the semiconductor and pharmaceutical industries. Both industries face demand variability, long research and development cycles, product expiration, and increasing margin pressures. Dionne advocates for data-driven inventory management, collaborative forecasting, and continuous planning to improve forecast accuracy and better coordinate supply and demand. Under Dionne's leadership, TriQuint transitioned to a faster, more integrated planning process that improved delivery performance, inventory turns, and capital efficiency.

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A Healthy Dose of Chips
Laura L. Dionne
Senior Director of Global Planning (Retiring)
Qorvo (TriQuint) Semiconductor
Pharmaceutical Innovation in Manufacturing Summit 2015
London, UK

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A Language Lesson
Chips
U.K.
U.S.
Today’s
Topic

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A Language Lesson
Chips and Drugs
Drugs
Chips

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Why Chips and Drugs?
Lesson to be learned from Semiconductors
Solving these problems at TriQuint
Agenda

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Demand Variability
Semiconductor & Pharmaceuticals
Commonalities
Inverted BOM
FinishedGoods
Packaging
Drug
Product
Bulk/
ActiveProd
Ingredient
FinishedGoods
Packaging
Untested
Die
Wafer
(Silicon,etc)
Long Cycle Times: R&D & Mfg)
Pharm: 12 – 18 months
Semi: 4 – 6 months
Expiration / Obsolescence
Pharm: 12 – 18 months (Patents, Generics, Shelf Life)
Semi: 12 – 18 months (Phone, PC, Tablet)
Pharm: Years
Semi: Years
Pharm: Int’l Demand, Disti Models, Variations, Packaging
Semi: Competitors, Consumer patterns, integration
Margin Pressure Increasing
Cost Price
Competition Loyalty
Supplier Power Flexibility
Quality  Market & Price

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So What Do “WE” Need To Do?

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A Healthy Dose of Chips
Data Is Key to all analysis and decisions
• Clean
• Timely
• Integrated
Active and Proactive Inventory Management
• Goals Driven by Data
• Manufacturing and Demand Variability
• Customer Needs
-Sole Source, Customer Priority, Impact of SO
• Clean and Readily Accessible Actuals
• On Hand, Projected
• Units, Cost, Location

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Forecast Accuracy: Measure & Improve
• Degree of Error (How much)
• Directional Bias (Under or Over)
• Impact of Error (Size of Revenue)
• Focus where impact is greatest
Collaborative Demand Planning
• Semiconductors can see demand forecasting increase to > 70%
• Requires commitment, engagement and accountability from:
• R&D
• Sales
• Marketing
• Manufacturing
• Finance
A Healthy Dose of Chips….
One Plan to Rule Them All
Customer Impact
Expedites
Lost Revenue
Excess Inventory
Underutilized Capacity
Material Shortages

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Scenario / Range Planning
• Directionally Correct vs. “Accurate”
• All future data is variable
• Focus on:
• Potential & Risks
• “What if” and Action Plans
• Variance for Demand, Supply &
Interaction of both
• History contributes to potential variance
Scenario Planning to Determine Action Plans
• Hope for the best…… Plan for everything else!
• Understand ramification and needed actions BEFORE they occur
A Healthy Dose of Chips….

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Continuous S&OP
• Range Planning
• Scenario Planning
• Trade Off & Risk Analysis
• Decision Orchestration
– Across Organization & Geography
• Event Driven vs. Scheduled
– Assumption capture & evaluate
– Sensing of plan deviation
– Alerting (Monitor & Respond)
Know sooner, Act Faster
A Healthy Dose of Chips….

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Merger
Support
Demand Management
Forecast Accuracy
Collaborative Forecast
Inventory
Capacity
S&OP Improvement
10 day process
Merger
Support
Revenue
Mgnt
Dash
Boards
Scenario
Planning
Reporting
& Alerting
RapidResponse
By Kinaxis
Results:
• Delivery Performance: 90% 97% Consistently since 2012
• Inventory Turns: 3.0  4.5 (without Strategic Inventory Builds)
• Capital Avoidance: > $20 annually (~ 20% total Capital Budget)
• Planning Headcount Avoidance: 25% improvement in Efficiency
• S&OP Speed (Sales Forecast  Exec Decision): 6 weeks  10 calendar days
Scheduling  Planning  Analysis  Managing the Business
TriQuint’s Journey
Data Cleanup
H2’2010 2011 2012 2013 2014 2015
Delivery
Performance
Analyze Current
Methods
Tools
Merger
Support
What IF / Scenario
Proactive Line Mgnt
Analytics
Learning
Curve
Analytic
Skill set
ProcessPeople
New Metric
Alignment
Center of Excellence
“Global Planning

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Questions?

13. Thank You
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