This document discusses Freescale Semiconductor's efforts to implement a "one version of the truth" approach to sales and operations planning (S&OP). Previously, Freescale had disconnected planning processes that resulted in multiple inconsistent versions of demand and supply plans. To address this, Freescale integrated their tactical planning systems into their S&OP process to create common inputs and planning tools. This improved consistency and reduced manual work. While benefits have been achieved, opportunities remain to further optimize areas like scenario planning, planning cycle times and executive-level S&OP meetings. The ultimate goal is to increase supply chain agility through more accurate, timely planning and decision making.

1. TM
Freescale, the Freescale logo, AltiVec, C-5, CodeTEST, CodeWarrior, ColdFire, C-Ware, mobileGT, PowerQUICC, StarCore, and Symphony are trademarks of Freescale Semiconductor, Inc.,
Reg. U.S. Pat. & Tm. Off. BeeKit, BeeStack, CoreNet, the Energy Efficient Solutions logo, Flexis, MXC, Platform in a Package, Processor Expert, QorIQ, QUICC Engine, SMARTMOS, TurboLink
and VortiQa are trademarks of Freescale Semiconductor, Inc. All other product or service names are the property of their respective owners. © 2011 Freescale Semiconductor, Inc.
One Version of the Truth
Driving S&OP from detailed planning tools
January 28, 2011
Thomas Matthews
Freescale Semiconductor

2. TM
Freescale, the Freescale logo, AltiVec, C-5, CodeTEST, CodeWarrior, ColdFire, C-Ware, mobileGT, PowerQUICC, StarCore, and Symphony are trademarks of Freescale Semiconductor, Inc.,
Reg. U.S. Pat. & Tm. Off. BeeKit, BeeStack, CoreNet, the Energy Efficient Solutions logo, Flexis, MXC, Platform in a Package, Processor Expert, QorIQ, QUICC Engine, SMARTMOS, TurboLink
and VortiQa are trademarks of Freescale Semiconductor, Inc. All other product or service names are the property of their respective owners. © 2011 Freescale Semiconductor, Inc. 1
Agenda
• Freescale Overview
• Supply Chain Complexity
• S&OP History
• Multiple Versions of the Truth
• One Version of the Truth
• Future S&OP Directions

3. TM
Freescale, the Freescale logo, AltiVec, C-5, CodeTEST, CodeWarrior, ColdFire, C-Ware, mobileGT, PowerQUICC, StarCore, and Symphony are trademarks of Freescale Semiconductor, Inc.,
Reg. U.S. Pat. & Tm. Off. BeeKit, BeeStack, CoreNet, the Energy Efficient Solutions logo, Flexis, MXC, Platform in a Package, Processor Expert, QorIQ, QUICC Engine, SMARTMOS, TurboLink
and VortiQa are trademarks of Freescale Semiconductor, Inc. All other product or service names are the property of their respective owners. © 2011 Freescale Semiconductor, Inc. 222
50+ years of innovation
Leadership in growth markets
Broad product & technology portfolio
Deep customer relationships
Flexible manufacturing strategy
Significant R&D investment
Talented, global workforce
Solid financial position
Freescale Semiconductor

4. TM
Freescale, the Freescale logo, AltiVec, C-5, CodeTEST, CodeWarrior, ColdFire, C-Ware, mobileGT, PowerQUICC, StarCore, and Symphony are trademarks of Freescale Semiconductor, Inc.,
Reg. U.S. Pat. & Tm. Off. BeeKit, BeeStack, CoreNet, the Energy Efficient Solutions logo, Flexis, MXC, Platform in a Package, Processor Expert, QorIQ, QUICC Engine, SMARTMOS, TurboLink
and VortiQa are trademarks of Freescale Semiconductor, Inc. All other product or service names are the property of their respective owners. © 2011 Freescale Semiconductor, Inc. 33
Portfolio Solutions
Driver
Infotainment
Chassis
& Safety
Powertrain
& Hybrid
Body &
Security
Security
Appliances
Base stations
& Controllers
Printers &
Gateways
Routers &
Switches
General
Embedded
Smart
Books
Sensors for
Phones &
Games
RF Remote
Controls
eBooks
Home Portable
Medical
Factory
Automation
& Drives
Smart Meters,
Smart Grids
Appliance
Control
General
Embedded

5. TM
Freescale, the Freescale logo, AltiVec, C-5, CodeTEST, CodeWarrior, ColdFire, C-Ware, mobileGT, PowerQUICC, StarCore, and Symphony are trademarks of Freescale Semiconductor, Inc.,
Reg. U.S. Pat. & Tm. Off. BeeKit, BeeStack, CoreNet, the Energy Efficient Solutions logo, Flexis, MXC, Platform in a Package, Processor Expert, QorIQ, QUICC Engine, SMARTMOS, TurboLink
and VortiQa are trademarks of Freescale Semiconductor, Inc. All other product or service names are the property of their respective owners. © 2011 Freescale Semiconductor, Inc. 4
Supply Chain Complexity
Internal
Fab
Internal
Probe
Internal
Assembly
Internal
Test
Source
& Procure
Customers
Suppliers
JITsExternal
Fab
External
Probe
External
Assembly
External
Test
Delivery
Assurance
Centers
Source: WSTS
BillionsofDollars

6. TM
Freescale, the Freescale logo, AltiVec, C-5, CodeTEST, CodeWarrior, ColdFire, C-Ware, mobileGT, PowerQUICC, StarCore, and Symphony are trademarks of Freescale Semiconductor, Inc.,
Reg. U.S. Pat. & Tm. Off. BeeKit, BeeStack, CoreNet, the Energy Efficient Solutions logo, Flexis, MXC, Platform in a Package, Processor Expert, QorIQ, QUICC Engine, SMARTMOS, TurboLink
and VortiQa are trademarks of Freescale Semiconductor, Inc. All other product or service names are the property of their respective owners. © 2011 Freescale Semiconductor, Inc. 55
Internal Worldwide Manufacturing
Asia Pacific/JapanEMEAAmericas
Freescale Chandler
Fab – 8”
Chandler, AZ
Freescale Oak Hill
Fab – 8”
Austin, TX
Freescale Austin
Technology & Mfg
Fab – 8”
Austin, TX
Freescale Toulouse
Fab – 6”
Toulouse, France
Freescale Kuala
Lumpur Final Mfg-
Kuala Lumpur,
Malaysia
Freescale Tianjin
Final Mfg
Tianjin, China
Freescale Sendai
Fab-6”
Sendai, Japan
Foundry / Subcontractor

7. TM
Freescale, the Freescale logo, AltiVec, C-5, CodeTEST, CodeWarrior, ColdFire, C-Ware, mobileGT, PowerQUICC, StarCore, and Symphony are trademarks of Freescale Semiconductor, Inc.,
Reg. U.S. Pat. & Tm. Off. BeeKit, BeeStack, CoreNet, the Energy Efficient Solutions logo, Flexis, MXC, Platform in a Package, Processor Expert, QorIQ, QUICC Engine, SMARTMOS, TurboLink
and VortiQa are trademarks of Freescale Semiconductor, Inc. All other product or service names are the property of their respective owners. © 2011 Freescale Semiconductor, Inc. 6
S&OP Timeline
Formal S&OP
process established
S&OP spreadsheet-
based
S&OP implemented in
SAP APO
Demand planning, tactical
supply – demand match
implemented in SAP APO
SAP R3
Implemented
S&OP process implemented
using internal software
Capacity feasible
planning implemented
Standardize & simplify
Simplify

8. TM
Freescale, the Freescale logo, AltiVec, C-5, CodeTEST, CodeWarrior, ColdFire, C-Ware, mobileGT, PowerQUICC, StarCore, and Symphony are trademarks of Freescale Semiconductor, Inc.,
Reg. U.S. Pat. & Tm. Off. BeeKit, BeeStack, CoreNet, the Energy Efficient Solutions logo, Flexis, MXC, Platform in a Package, Processor Expert, QorIQ, QUICC Engine, SMARTMOS, TurboLink
and VortiQa are trademarks of Freescale Semiconductor, Inc. All other product or service names are the property of their respective owners. © 2011 Freescale Semiconductor, Inc. 7
Disconnected Plans = Multiple Truths
Supply – Demand
Match
Supply Statements
Mid-term Plans
Supply – Demand
MatchSupply – Demand
MatchSupply – Demand
Match
Demand
Forecast
Capacity
Demand
Forecast
Capacity
S&OP
Supply – Demand
Match
Supply Statements
Tactical Plans
Capacity
Demand
Orders
Tactical Planning
Demand
Orders

9. TM
Freescale, the Freescale logo, AltiVec, C-5, CodeTEST, CodeWarrior, ColdFire, C-Ware, mobileGT, PowerQUICC, StarCore, and Symphony are trademarks of Freescale Semiconductor, Inc.,
Reg. U.S. Pat. & Tm. Off. BeeKit, BeeStack, CoreNet, the Energy Efficient Solutions logo, Flexis, MXC, Platform in a Package, Processor Expert, QorIQ, QUICC Engine, SMARTMOS, TurboLink
and VortiQa are trademarks of Freescale Semiconductor, Inc. All other product or service names are the property of their respective owners. © 2011 Freescale Semiconductor, Inc. 8
Motivation for Change
Disconnected planning approaches = multiple versions of the truth
Tactical Planning
• Demand statement = orders,
rules, management direction
• Demand manually constrained
• SAP APO for supply demand
match
• Demand is iterative process
• Manually intensive
S&OP
• Demand statement = forecast
• Demand unconstrained
• Internal tool for supply demand
match
• Supply manually constrained
• Supply demand match is iterative
process
• Manually intensive

10. TM
Freescale, the Freescale logo, AltiVec, C-5, CodeTEST, CodeWarrior, ColdFire, C-Ware, mobileGT, PowerQUICC, StarCore, and Symphony are trademarks of Freescale Semiconductor, Inc.,
Reg. U.S. Pat. & Tm. Off. BeeKit, BeeStack, CoreNet, the Energy Efficient Solutions logo, Flexis, MXC, Platform in a Package, Processor Expert, QorIQ, QUICC Engine, SMARTMOS, TurboLink
and VortiQa are trademarks of Freescale Semiconductor, Inc. All other product or service names are the property of their respective owners. © 2011 Freescale Semiconductor, Inc. 9
Opportunity
2007 – 2008 re-engineering of Freescale’s core systems
• Mantra of “One Version of the Truth”
• Base S&OP processes off tactical planning systems

11. TM
Freescale, the Freescale logo, AltiVec, C-5, CodeTEST, CodeWarrior, ColdFire, C-Ware, mobileGT, PowerQUICC, StarCore, and Symphony are trademarks of Freescale Semiconductor, Inc.,
Reg. U.S. Pat. & Tm. Off. BeeKit, BeeStack, CoreNet, the Energy Efficient Solutions logo, Flexis, MXC, Platform in a Package, Processor Expert, QorIQ, QUICC Engine, SMARTMOS, TurboLink
and VortiQa are trademarks of Freescale Semiconductor, Inc. All other product or service names are the property of their respective owners. © 2011 Freescale Semiconductor, Inc. 10
Current Process – One Version of the Truth
Demand
Orders
Forecast
Internal
Requirements
Prioritization
Supply
Work in Progress
Capacity Statements
Planning Parameters
Supply – Demand
Match
Supply Statements
Weekly Factory Schedules
Monthly S&OP
Monthly Excess Inventory
Annual Operating Plan
Weekly Scenarios

12. TM
Freescale, the Freescale logo, AltiVec, C-5, CodeTEST, CodeWarrior, ColdFire, C-Ware, mobileGT, PowerQUICC, StarCore, and Symphony are trademarks of Freescale Semiconductor, Inc.,
Reg. U.S. Pat. & Tm. Off. BeeKit, BeeStack, CoreNet, the Energy Efficient Solutions logo, Flexis, MXC, Platform in a Package, Processor Expert, QorIQ, QUICC Engine, SMARTMOS, TurboLink
and VortiQa are trademarks of Freescale Semiconductor, Inc. All other product or service names are the property of their respective owners. © 2011 Freescale Semiconductor, Inc. 11
Current Process – Planning Systems
Demand
Backlog
Forecast
Internal
Requirements
Prioritization
Supply
Work in Progress
Capacity Statements
Planning Parameters
Supply – Demand
Match
Supply Statements
Weekly Factory Starts
Monthly S&OP
Monthly Excess Inventory
Annual Operating Plan
Weekly Scenarios

13. TM
Freescale, the Freescale logo, AltiVec, C-5, CodeTEST, CodeWarrior, ColdFire, C-Ware, mobileGT, PowerQUICC, StarCore, and Symphony are trademarks of Freescale Semiconductor, Inc.,
Reg. U.S. Pat. & Tm. Off. BeeKit, BeeStack, CoreNet, the Energy Efficient Solutions logo, Flexis, MXC, Platform in a Package, Processor Expert, QorIQ, QUICC Engine, SMARTMOS, TurboLink
and VortiQa are trademarks of Freescale Semiconductor, Inc. All other product or service names are the property of their respective owners. © 2011 Freescale Semiconductor, Inc. 12
State of S&OP
Benefits
• Common inputs
• Common planning tools
• Consistent reporting
• Tie between tactical – S&OP
• Robust scenario planning
• Reengineered roles
Opportunities
• Best-in-class planning data
accuracy
• Complexity
– supply – demand match
– scenario process
• S&OP calendar / cycle time
• Executive S&OP
• System run time
• Manual intervention

14. TM
Freescale, the Freescale logo, AltiVec, C-5, CodeTEST, CodeWarrior, ColdFire, C-Ware, mobileGT, PowerQUICC, StarCore, and Symphony are trademarks of Freescale Semiconductor, Inc.,
Reg. U.S. Pat. & Tm. Off. BeeKit, BeeStack, CoreNet, the Energy Efficient Solutions logo, Flexis, MXC, Platform in a Package, Processor Expert, QorIQ, QUICC Engine, SMARTMOS, TurboLink
and VortiQa are trademarks of Freescale Semiconductor, Inc. All other product or service names are the property of their respective owners. © 2011 Freescale Semiconductor, Inc. 13
Scenario Capabilities
What is Scenario Planning?
• Scenario Planning is “what-if” analysis
The two categories of scenarios
• Demand and/or capacity scenarios
• Event Driven scenario with supply changes
Two planning horizons
• Tactical
• Midterm (S&OP)
Flexible constraining
• Standard constraining options
• Flexible constraining options

15. TM
Freescale, the Freescale logo, AltiVec, C-5, CodeTEST, CodeWarrior, ColdFire, C-Ware, mobileGT, PowerQUICC, StarCore, and Symphony are trademarks of Freescale Semiconductor, Inc.,
Reg. U.S. Pat. & Tm. Off. BeeKit, BeeStack, CoreNet, the Energy Efficient Solutions logo, Flexis, MXC, Platform in a Package, Processor Expert, QorIQ, QUICC Engine, SMARTMOS, TurboLink
and VortiQa are trademarks of Freescale Semiconductor, Inc. All other product or service names are the property of their respective owners. © 2011 Freescale Semiconductor, Inc. 14
S&OP Calendar
Saturday Sunday Monday Tuesday Wednesday Thursday Friday
Week-1Week1Week2Week3Week4
Manufacturing
Requirements
Statement
Production PlanSupply – Demand Match Processing
Supply – Demand
Match Processing
Order Plan
Supply – Demand
Match Processing
Supply – Demand
Match Processing
Tactical
Plans
Tactical
Plans
Tactical
Plans
Tactical
Plans
Scenario Opportunity
Scenario Opportunity
Scenario Opportunity
Demand Forecast
Lock
Demand Forecast
Lock
Demand Forecast
Lock
Demand Forecast
Lock
Demand Forecast
Lock
S&OP Meeting

16. TM
Freescale, the Freescale logo, AltiVec, C-5, CodeTEST, CodeWarrior, ColdFire, C-Ware, mobileGT, PowerQUICC, StarCore, and Symphony are trademarks of Freescale Semiconductor, Inc.,
Reg. U.S. Pat. & Tm. Off. BeeKit, BeeStack, CoreNet, the Energy Efficient Solutions logo, Flexis, MXC, Platform in a Package, Processor Expert, QorIQ, QUICC Engine, SMARTMOS, TurboLink
and VortiQa are trademarks of Freescale Semiconductor, Inc. All other product or service names are the property of their respective owners. © 2011 Freescale Semiconductor, Inc. 15
Measuring Success – Supply Chain Agility
• Anticipate – scenario runs complete successfully and are acted
upon
• Tie Out – disconnect resolution plans are quickly created and
agreed upon
• Be Aggressive – the time to resolve the disconnects meet
management targets
• Execute – disconnect resolution plans / milestones are completed
per schedule
• Make Timely Decisions – decision carryover

17. TM
Freescale, the Freescale logo, AltiVec, C-5, CodeTEST, CodeWarrior, ColdFire, C-Ware, mobileGT, PowerQUICC, StarCore, and Symphony are trademarks of Freescale Semiconductor, Inc.,
Reg. U.S. Pat. & Tm. Off. BeeKit, BeeStack, CoreNet, the Energy Efficient Solutions logo, Flexis, MXC, Platform in a Package, Processor Expert, QorIQ, QUICC Engine, SMARTMOS, TurboLink
and VortiQa are trademarks of Freescale Semiconductor, Inc. All other product or service names are the property of their respective owners. © 2011 Freescale Semiconductor, Inc. 16
2011 Opportunities
• Extend S&OP process; weekly – monthly – quarterly process
• Improve rules / data accuracy
• Reduce manual intervention
• Improve speed of decision making
• Get results faster
• Enhance scenario capabilities

18. TM