Driving Improvements Through Supply Chain Optimization.
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Kehat Shahar - Vice President of Supply Chain Planning at SanDisk While most people have supply chain planning and inventory optimization technologies, they struggle to define customer-centric strategies. Listen to the SanDisk story to understand how inventory strategies define customer-centricity. A presentation from the 2015 Supply Chain Insights Global Summit
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Driving Improvements Through Supply Chain Optimization.
- 1. 9/14/2015 September 2015, p.1Supply Chain Insights Global Summit #ImagineSC Supply Chain Optimization Kehat Shahar Vice President, Supply Chain Planning SanDisk Corporation
- 2. 9/14/2015 September 2015, p.2Supply Chain Insights Global Summit #ImagineSC Forward Looking Statements During our meeting today, we may make forward-looking statements. Any statement that refers to expectations, projections or other characterizations of future events or circumstances is a forward-looking statement, including those relating to market position, market growth, product sales, industry trends, supply chain, future memory technology, production capacity, production costs, technology transitions, construction schedules, production starts, and future products. This presentation contains information from third parties, which reflect their projections as of the date of issuance. Actual results may differ materially from those expressed in these forward- looking statements due to factors detailed under the caption “Risk Factors” and elsewhere in the documents we file from time to time with the SEC, including our annual and quarterly reports. We undertake no obligation to update these forward-looking statements, which speak only as of the date hereof or the date of issuance by a third party, as the case may be.
- 3. 9/14/2015 September 2015, p.3Supply Chain Insights Global Summit #ImagineSC Agenda SanDisk Overview Supply Chain Optimization - Supply Chain Segmentation & Policy Q & A
- 4. 9/14/2015 September 2015, p.4Supply Chain Insights Global Summit #ImagineSC We Enable Innovation in Four Mega Markets Mobile and Connected Devices ConsumerData Center Client Computing
- 5. 9/14/2015 September 2015, p.5Supply Chain Insights Global Summit #ImagineSC Financial Strength Trailing 4 Quarter Financials* • $6.1B Revenue • 61% commercial; 39% retail • $1.5B Net Cash • $.9B R&D Investment Fortune 500 5 * Financials as of Q2’15. Net Cash = (Cash + cash equivalents + short-term and long-term marketable securities) less (debt at maturity value) as of end of Q2’15
- 6. 9/14/2015 September 2015, p.6Supply Chain Insights Global Summit #ImagineSC Supply Chain Footprint SanDisk with Mfg partner Toshiba Silicon Suppliers SanDisk Storage Shanghai Factory SanDisk Storage Malaysia Factory (Target production in 1H-2015) Contract Manufacturers (CM) CM CM SanDisk Retail Fulfillment Regional Fulfillment Local Warehouse VMI Hub 300,000+ Store Fronts Distributors System Integrators Wafer Memory Packaging & Test Card and Solid State Drive Assembly & Test Vertically Integrated, scale and flexible supply chain Shipping almost 2 million units daily Packaging and Fulfillment Channel CM CM
- 7. 9/14/2015 September 2015, p.7Supply Chain Insights Global Summit #ImagineSC DP DM SCP FP MEIOSAP Agile BI Tablea u Advanced Planning Systems GATP Advanced Planning Solutions L1 Independent Forecasting L2 - Consensus Forecasting L3 Supply Planning L4 Adjust Demand &Supply Plan L5 Distribute Sup Plan Week/Monthly Process Daily/Weekly Process S&OP Process Analytics Simu latio n Optimi zation Analytics COE Supply Chain R&D SC Policy Inv. Models Fcst Algorithm … Plan Recommendation Decisions
- 8. 9/14/2015 September 2015, p.8Supply Chain Insights Global Summit #ImagineSC Supply Chain Optimization
- 9. 9/14/2015 September 2015, p.9Supply Chain Insights Global Summit #ImagineSC Postpone Inventory while meeting customer service level requirements Delay Product Differentiation without adding significant cycle time or cost Understand/Measure · Buffer · Reduce Variability σ SKUWafer Memory Package Card and Drive Mem Pkg Test Supply Chain Policy to Maximize $/GB & effectively balance Service level & Inventory Reduce Cycle Time without compromising on flexibility Supply Chain Optimization
- 10. 9/14/2015 September 2015, p.10Supply Chain Insights Global Summit #ImagineSC Supply Chain Segmentation (Postpone inventory while meeting customer service level requirements)
- 11. 9/14/2015 September 2015, p.11Supply Chain Insights Global Summit #ImagineSC Supply Chain SegmentationSupplychainsegmentation Started with one size fits all approach (FY 2008 and prior) - Build to forecast with 6- 8 weeks manufacturing frozen fence - Changed from Build to forecast to Build to targets (still one size fits all) - Key drivers for this change is to reverse trend of high inventory and low service level Die Bank Tested Memory Pkg Tested Card or Drive Generic Card or Drive SKU Factory/Contract Manufacturer Fulfillment Build To Forecast Order Build To Targets Order High Margin Builds Excess Build PlanKey changes • Multi stage inventory • Reduce frozen fence (from weeks to days) to increase response to demand changes • Demand priority visibility and actions across supply chain Implementation approach • Top management buy in • Think tank team of functional expert is set up to architect solution • Think tank team led change management Build To Targets
- 12. 9/14/2015 September 2015, p.12Supply Chain Insights Global Summit #ImagineSC BTT Supply chain segmentationSupplychainsegmentation Supply chain segmentation by customer and product Retail - Build to targets (BTT) - CPFR customers - Emerging markets - eTail customers (enhanced BTT model with integrated information and physical flow) Die Bank Tested Memory Pkg Tested Card or Drive Generic Card or Drive SKU Factory/Contract Manufacturer Fulfillment Build To Targets OrderBuild To Targets CPFRCustomer Targets (SS) Order Targets (SS) Commits Driver: CPFR team request to meet CPFR customer requirements Key changes: Provide commits to CPFR customers accurately and consistently meet commits SKU Whse Emerging Markets Build To Targets Build To Targets Targets Driver: Retail BU focus on strategic growth in emerging markets Key changes: same day pick up, regional whse, value stream map & improvements
- 13. 9/14/2015 September 2015, p.13Supply Chain Insights Global Summit #ImagineSC Supply chain segmentationSupplychainsegmentation Supply chain segmentation by customer and product OEM - Build to forecast - Build to targets - Build to order - Virtual hub - VMI/Customer hubs Die Bank Tested Memory Pkg Tested Card or Drive SKU SKU Factory/Contract Manufacturer VMI Hub Build To Forecast Order Build To Targets Order BTO Build To Order Driver: Excess inventory of custom products Key changes: improving end to end cycle time, material and capacity planning VHub Build To Commits & Days of Inv Virtual Hub Pulls Driver: stg customer request to set up hub for all mfg locations around the world Key changes: Factory as hub, Expanded CPFR commits process for OEM customer VM I Build To Commits & Days of Inv Pulls Driver: Customer request
- 14. 9/14/2015 September 2015, p.15Supply Chain Insights Global Summit #ImagineSC Supply Chain Segmentation and Next StepsSupplychainsegmentation Started with One size fits all supply chain Proactively understanding key customer and product needs and segment supply chain Achieve effective trade off between • Customer service lvl • Inventory/cost • Replenish’t lead time Delayproduct differentiation Generic products delay differentiation Custom products delay differentiation (common platform) Design for delay product differentiation Configure to order Costtoserve Trade-offs – Cost, Repln LT, Service level Cost to serve for on boarding new customers Provide ongoing visibility to BU and sales (in progress) Tracking supply chain operating cost by segment (in progress) Valueaddedservice Identify value added service opportunities through competitive analysis Capturing value to price ratio by segment (in progress) Integrate in cost to serve model (in progress)
- 15. 9/14/2015 September 2015, p.16Supply Chain Insights Global Summit #ImagineSC Key lessons Think tank team of functional leads helps in architecting solution and managing change Internal sales and customer collaboration teams are good source of customer requirements and competitive landscape information Advanced planning systems is key enabler of segmentation Take incremental re-engineering as opposed to big bang approach to segmentation Increased effort in re-design existing products for delay differentiation Getting management buy-in for cost-to-serve is easy, implementation is complex
- 16. 9/14/2015 September 2015, p.17Supply Chain Insights Global Summit #ImagineSC Q & A
- 17. 9/14/2015 September 2015, p.18Supply Chain Insights Global Summit #ImagineSC Postpone Inventory while meeting customer service level requirements Delay Product Differentiation without adding significant cycle time or cost Understand/Measure · Buffer · Reduce Variability σ SKUWafer Memory Package Card and Drive Mem Pkg Test Advance Planning System Architecture System recommends User review and update plan System respect user updates and re-plan Supply Chain Policy to Maximize $/GB and effectively balance Service level & Inventory Reduce Cycle Time without compromising on flexibility Supply Chain Optimization Recap and Q &A
Editor's Notes
- Speakers note: this oral statement to be read before each presentation. But, instead of reading the entire content on this slide, the speaker may recite the following statement: “Today's presentation includes forward-looking statements concerning future events, trends and projections. Actual results may materially differ from these forward-looking statements. We refer you to our most recent forms 10-K and 10-Q, filed with the SEC, for a discussion of factors that could cause our results to differ.”
- We essentially serve four very large markets and customer segments. Data centers, from enterprises to government to cloud service providers, are using flash to get more value out of their infrastructure and create new services. Manufacturers of servers, desktop and laptops, who are all turning to flash to increase performance and save energy. Manufacturers of mobile and connected devices. The Internet of Things will be propelled by flash. Consumers. These markets are also increasingly interrelated. A large number of consumer and commercial devices will be continually linked to the cloud. Your car navigation system will deliver traffic and accident information in real time, for example, or tell you about available parking spaces. The demands of users will up the bar for data centers and in turn the new level of performance will lead to new services. Flash is only technology that can deliver the performance necessary for this to happen. Analysts expect that this broad-based demand will cause flash bit shipments to grow at approximately 35% per year.
- Explain our supply chain footprint – many are not familiar with Semi Conductor supply chain
- Talk about analytics and systems strongly embedded into our planning processes
- Talk about the principles of how we manage our supply chain and what we try to drive, top to bottom My presentation will focus on the postponement inventory model and our supply chain policies
- This slide focuses on the move from BTF to BTT
- While previous slide was one fits all, this slide is about how we segmented our supply chain to different needs and fine tuned our supply chain models
- In This slide talk about some of the other things we implemented to further balance between supply chain excellence and cost and value