Demand Chain Management
TI’s Partner Integration Strategies
Catherine Carey
B2B Sales Strategy Manager
Texas Instruments
Microsoft Supply Chain Summit
San Jose, California
October 25, 2007
Demand Chain Management
Supply Chain Evolution
Complexity Has Grown
Early 1990s
Supplier
Customer
TI
TI
Materials
Equipment
TI Owned Factories
OEMs
Disty
’97 –’00
Supplier
Materials
Equipment
Customer
TI
TI Owned Factories
Foundries, Subcons
OEMs, EMSI’s,
Disty, ODMs
’00-Present
Supplier
Materials
Equipment
External / TI Make
Multi-factory
Flows
TI Owned Factories
Foundries, Subcons
Customer
Hubs, EDI,
Consignment
OEMs, EMSI’s
Disty, ODMs
Demand Chain Management
We have grown as a company…
Wafer
Fab
Product
Distribution
Center
Assembly
Test
1999
2006
# of TI Fabs & Foundries
14 (0)
60 (45)
# of TI AT’s & Subcontractors
10 (0)
51 (30)
18
85
# of Line items shipped
1.1 Mu
2.7 Mu
# of Units shipped
6.2 Bu
14.3 Bu
Revenue
$7.3B
$13.5 B
# of PDC’s & Hubs
Demand Chain Management
…and complexity has increased
Early 1990s
Supplier
Materials
Equipment
Customer
TI
TI
TI Owned Factories
•
•
•
TI
•
TI Owned Factories •
Foundries, Subcons
•
’97 –’00
Supplier
Materials
Equipment
OEMs
Disty
...over 55,000 products,
150,000 orders / month,
50,000 end customers, … Customer
>1K of Shipping lanes
OEMs, EMSI’s
>1M Line items shipped
Disty, ODMs
>14 BU Units shipped
’00-06
Supplier
•
Customer
Diverse
Products: Custom,
Catalog,
Mass Market,
Source,
Analog,
Logic
Materials
Multi-factory
TI Owned
Factories Sole
Hubs,
EDI, DSP,
OEMs,
EMSI’s
Equipment
•
External / TI Make
Flows
Foundries, Subcons
Consignment
Many Businesses: 25+ WW P&Ls, Many Strategic Customers, ….
Disty, ODMs
Demand Chain Management
TI’s Customer B2B Processes Portfolio
Technical Prod
Info
Inbound
Export
Compliance
Product Master
(AVL) Mgmt
Material Comp.
/ RoHS
Pre - Win
Outbound
Price List Mgmt
Technical Prod
Info Response
Technical Prod
Info – Push
Marketing Data
PLC
Pre - Order
Material Comp.
/ RoHS
Quote
Export
Compliance
Market Lead times
Inventory
Orders
Consumption
Notification
Self-Billing Invoice
Change Order /
Cancellations
Tactical Forecast
Open Order
Book Mgmt
Shipment
Authorization
Shipment
Status
EFT
Inv. Mgmt
Logistics
Finance
Forecast
Response
Planned
Shipments
Shipment
Notification
Invoice
Order Mgmt
Open Order
Book Mgmt
Price List Mgmt
Product Master
(AVL) Mgmt
Capacity Forecast
Change / Cancel
Response
Orders Response
Quote Response
Inventory – Free
Avail. Stock Only
Receipt Advice
Shipping
Documentation
Distributor Avail.
Inventory
WIP – Custom
Products Only
1D & 2D Barcode
Alert Management
B2B only
Web only
B2B & Web
Remittance
Demand Chain Management
What is EZconnect?
– Definition: TI-developed software solution designed to
make it easy for our Customers to connect with TI
– Goal: To accommodate the ‘real life’ business
processes and provide back end integration regardless
of Customer capability to generate or accept electronic
messages
Demand Chain Management
A Business Case for EZConnect
• Customer Purchasing system generates P.O.’s but MRP system
generates proposed changes.
– Procurement system has to execute changes to the PO to generate a
change order.
– No or limited capability to process actual supplier response
– Proliferation of spreadsheets (generated from MRP system as
‘proposed changes) available on web portals for supplier response
• Fundamental issue: Poor PO to Sales Order backlog
synchronization between Customer and Supplier.
Result – Automated Order Entry declined to 64%
Demand Chain Management
Where have the Standards not met the business
need?
•
Many 850/ORDER customers cannot accept 855/ORDRSP
– How does the buyer know in their own application what is hard backlog?
– What value has EDI provided?
•
Standards moving to ‘chatty’ exchanges
– Example RosettaNet two-way conversations (3A4 with 3A4 response AND potentially
multiple 3A7 Supplier responses), without considering the actual business process.
– This is not how the trading community actually conducts business.
•
This is also reflected in some companies’ decision to de-emphasis or even
cease EDI exchanges.
– Even worse, companies with good EDI capability still want web portal entries or
spreadsheet updates
Demand Chain Management
Role of Web Portals
The portals serve a real need for Buyers to understand their supplier
backlog
– Updates are more timely and more accurate
– Downside is the manual effort required by suppliers to provide the
manual updates.
– Manual Effort = Human Error and Cost (resource costs plus
correction of errors (COGS)
Demand Chain Management
What has TI done?
Warehousing
System
– Extracts from Customer applications as tab delimited or .csv
files sent to TI
– Assessed capability of Customers’ MRP or other
applications to send machine generated files via email.
– TI receives the email with attachment and treats it just like
any other B2B exchange (EDI or RosettaNet)
New Orders, Forecast,
PO Changes
Invoices, ASNs,
Forecast
Response, Export
Data, PO
Confirmations
Financial
System
Customer
e-mail
B2B Gateway
Internet
TI’s
Systems
Texas Instruments
Demand Chain Management
Example of an EZconnect Forecast Response Email
Data
Attached
Demand Chain Management
Example of an EZconnect Forecast
Response Attachment
Demand Chain Management
Texas Instruments
EZconnect Programs
Resale / POS,
Remittance Advise,
STIR – Financial Invoice and
Inventory,
Customs Documents
Automated Backlog
provisioning,
Response to Forecast
PO
Response
Forecast
2003
2004
Order,
Order Change
Shipping Notification
Automated Backlog Change
Full Forecast Response
2005
2006
2007
Demand Chain Management
EZconnect Deliverables
–
–
–
–
–
–
–
–
–
Automated PO increased to 93% in 2006 – Savings of $4.3M WCC annually
Chinese Customs Clearance reduced by 2 – 3 days – Direct impact to DSO metrics
58% Asia remittance items automatically applied vs. manual processing
TI response to Customer portal requests – no additional Customer Service headcount
1000+ customers WW
100,000+ manual entries eliminated/ month
Excellent market reception – Customer Vendor Scorecards
Full Audit traceability for email exchanges
Set of Core business processes available for rapid customer integration
EZconnect is a TI development, but not TI technology.
Demand Chain Management
EZconnect Summary
• EZconnect solutions mirror equivalent EDI and RosettaNet
standard transactions. All solutions use generic templates which
can be easily customized.
• EZconnect is a low cost– high value solution to speed up business
process handling.
• No additional infrastructure costs are required to implement.
• Implementation time is short with rapid results.
– Onboarding new account:
24 Hours
– Onborarding new message type: 48 Hours