Customer: Silicon Operations (Microsoft
Home and Entertainment Division)
Web Site: www.microsoft.com
Country or Region: United States
Industry: High-tech and electronics manufacturing
Partner: Kineticsware
Partner: Sonata Software
Customer Profile
Part of the Microsoft Home and
Entertainment Division, the Silicon
Operations (SiOps) group contributes to the research, design, and production of the graphics processor unit chip that drives the
Xbox 360
®
video game and home entertainment system.
Software and Services
 Microsoft Dynamics™
− Microsoft Dynamics AX 4.0
 Microsoft
®
Office
− Microsoft Office SharePoint
®
Server
2007
 Microsoft Servers
− Microsoft SQL Server
®
2005
 Technologies
− Microsoft SQL Server 2005 Reporting
Services
For more information about other Microsoft customer successes, please visit: www.microsoft.com/casestudies
Larry Hamlin, Supply Chain Manager, Silicon Operations
The Silicon Operations (SiOps) group at
Microsoft Corporation manufactures the central processing unit and graphics processor unit chips that drive the Xbox
360
®
video game and home entertainment system. The SiOps group operates as a virtual manufacturer, with outsourced partners performing actual manufacturing and assembly.
Operating an efficient virtual manufacturing business for a product as sophisticated as the Xbox 360 carries unique challenges. The
SiOps group is responsible for complex bills of materials, including both the firstgeneration and second-generation chips, which are delivered to two assembly houses and contract manufacturers around the world. Volatile demand and long lead times from suppliers further complicate supply chain management.
The SiOps group originally deployed
Microsoft Dynamics™ AX 3.0 to manage its complex processes and supply chain. The initial deployment integrated Microsoft
Dynamics AX 3.0 with the SAP R/3 manufacturing system and received EDI transactions directly from vendors through
Microsoft
®
BizTalk
®
Server.
While Microsoft Dynamics AX 3.0 provided significant gains in both quality and time-todelivery, the group understood that upgrading to Microsoft Dynamics AX 4.0 could introduce additional efficiencies. In particular, the group recognized that alerting features and enhanced reporting would provide more detailed management of the supply chain and financial aspects of the operation. Microsoft Dynamics AX 4.0 would also simplify the inclusion of new vendors and suppliers into the extended supply chain, enabling the group to onboard new vendors without writing custom integration code. Although an upgrade offered significant potential benefits, the SiOps group could not afford to interrupt production during the transition.
The SiOps group turned to Microsoft Certified
Partner Kineticsware to manage the upgrade project and help support a seamless transition to Microsoft Dynamics AX 4.0. The group also relied on Microsoft Gold Certified
Partner Sonata Software to perform application development and testing at its offshore facilities.

Rigorous Testing and Deployment
Methodology
Because Kineticsware and Sonata Software are located in different geographies and time zones, they used the Microsoft Dynamics Sure
Step Methodology to enforce a consistent approach to solution development and deployment, and to facilitate teamwork between the organizations. Kineticsware program managers and solution architects shared the same Microsoft Dynamics Sure
Step Methodology processes, tools, and templates, enabling both teams to synchronize their efforts.
The SiOps group and its partners took advantage of the upgrade and migration tools included in Microsoft Dynamics AX 4.0 to seamlessly transfer numerous customizations and integrations without rewriting any code.
Ric Antush, Senior Program Manager for
Microsoft, explains, “The automated prescan process was critical to a smooth deployment.
We had literally hundreds of thousands of lines of code. It would have taken forever to identify issues through a manual process.”
Enhanced Reporting and Notifications
Microsoft Dynamics AX 4.0 enables the SiOps group to enhance reporting. This makes it easier to extract and present information from the manufacturing system and for analysts to work with data in the tool most appropriate to the task. The prebuilt Web services that ship with Microsoft Dynamics AX 4.0 enable the team to publish reports directly to Microsoft
Office SharePoint
®
Server 2007, or to pull data into Microsoft Office Excel
®
for simple analysis. For more sophisticated analysis, integration with Microsoft SQL Server
®
2005
Reporting Services enables analysts to prepare financial and performance reports using information from Microsoft Dynamics AX
4.0. “Integration with Microsoft SQL Server
2005 helps our users do the custom reporting that gives them the analytical ability they need,” says Antush.
After Microsoft Dynamics AX 4.0 is fully deployed, the SiOps group plans to make use of new alerting and reporting features to provide even greater visibility into supply chain performance. Alerts will enable the group’s analysts and program managers to monitor specific elements of the supply chain, identifying and responding to problems before they impact production schedules. Individual users can configure custom alerts based on events or conditions, such as deliveries or inventory levels, and have notifications delivered to Microsoft
Office Outlook
®
.
Familiar Interface
The SiOps group also found that the user interface of Microsoft Dynamics AX improved efficiency. Because Microsoft Dynamics business management software works with and like applications in the Microsoft Office system, Microsoft Dynamics AX is immediately familiar and comfortable to use.
Since upgrading to Microsoft Dynamics AX
4.0, the SiOps group has realized significant benefits.
Complete Supply Chain Visibility
Inventory visibility and a view into their supply chain were significant improvements for the SiOps group. “Microsoft Dynamics AX lets us view inventory by product and location,” says Doug Godinez, Senior
Program Manager for Microsoft. “We now have full visibility of work in progress at our vendors and our assembly houses, so we can react if issues arise that would otherwise slow down progress.”
The native reporting capabilities of Microsoft
Dynamics AX 4.0 have helped the team manage its inventory, shipping, and deliveries smoothly while keeping costs down and quality up. “We have saved hours of time and troubleshooting, which allows us to optimally manage high-dollar inventory and manufacturing cost among multiple assembly houses,” says Larry Hamlin, Supply
Chain Manager for the SiOps group.
Intuitive User Experience
The new user interface in Microsoft
Dynamics AX 4.0 has contributed to rapid adoption and uptake. The SiOps group was happy to note that users quickly became productive on the new system and required minimal training time. According to Hamlin,
“The familiar Microsoft interface greatly reduced our downtime for education and enables quicker contribution to the supply chain from new hires or temporary staff during times of peak production.”
Fast, Cost-Effective Implementation
The Microsoft Dynamics Sure Step
Methodology and tools enabled both partners on the project, Kineticsware and
Sonata Software, to speed development of customizations and keep project costs to a minimum. By standardizing on proven processes and tools, the partners could better take advantage of time zone differences by working on the project around-the-clock. At the same time, the
Microsoft Dynamics Sure Step Methodology reduced the risk of miscommunication.
Flexibility to Support an Extended Supply
Chain
With Microsoft Dynamics AX, bringing new vendors or suppliers on board is a simple process, reduced from four months to only a few days. “The systems are designed to be very scalable and efficient,” explains
Godinez. “We have an extremely agile supply chain that can efficiently support any other businesses that require an outsourced manufacturing model.”
This case study is for informational purposes only. MICROSOFT MAKES NO WARRANTIES, EXPRESS OR IMPLIED, IN THIS SUMMARY.
Document published January 2008