View
182
Download
0
Category
Tags:
Preview:
Citation preview
Turning Supply Chain Disruptions
into a Competitive Advantage
Alberto Della Chiesa
Group Vice President
Company Supply Chain Management
Who we are
Supply Chain Excellence Award APICS Feb 2015
• A global semiconductor leader
• The largest European semiconductor company
• 2014 revenues of $7.40B
• Approximately 43,600 employees worldwide
• Approximately 8,700 people working in R&D
• 11 manufacturing sites
• Listed on New York Stock Exchange, Euronext Paris
and Borsa Italiana, Milano
Who we are
As of December 31, 2014
Supply Chain Excellence Award APICS Feb 2015
3
Where you find us
Our MEMS & Sensors
are augmenting
the consumer experience
Our automotive products
are making driving safer,
greener and more
entertaining
Our smart power products
are allowing our mobile products to operate longer
and making more of our energy resources
Our Microcontrollers
are everywhere
making everything smarter
and more secure
Our digital consumer products
are powering the augmented
digital lifestyle
Supply Chain Excellence Award APICS Feb 2015
4
Global Presence
Americas
15%
29%
EMEA
26%
37%
Asia
59%
34%
2014 revenue by geography
% by location of order shipment
% by customer origin
Supply Chain Excellence Award APICS Feb 2015
5
Semi Supply Chain
and Challenges
Supply Chain Excellence Award APICS Feb 2015
Unprecedented Stress Test Recovery from dramatic declines have taken multiple years in the past
5 years
1 year
Supply Chain Excellence Award APICS Feb 2015
7
Technology Adoption Rates Acceleration
Source: Charlie Catlett, Argonne Nat'l Laboratory
Supply Chain Excellence Award APICS Feb 2015
8
Variability increases moving up the supply chain…
Flexibility
The BULLWHIP Effect
Consumption Customers Retailers Wholesalers Manufacturers Suppliers
Supply Chain Excellence Award APICS Feb 2015
9
Supply Chain Dual Mandate
Market Share
RONA improvement
Meet demand (CD=RD)
On time delivery (JIT)
Inventory
turns
Asset
utilization
Profitable Growth Minimize costs while
maximizing the flexibility
needed to grow market share
Supply Chain Excellence Award APICS Feb 2015
10
Supply Chain at ST
Supply Chain Excellence Award APICS Feb 2015
ST Supply Chain Foundations
• Supply Chain visibility: Global and synchronized daily visibility of demand /
supply enabling proactive planning & early warning
• Extended supply chain optimization in collaborative projects with our
partners
• Flexible manufacturing
• Efficient and fast logistics models
• Network of over 2000 supply chain actors
DIFFUSION - EWS ASSEMBLY – T&F
SUPPLIERS CUSTOMERS END-CUSTOMERS ST SUPPLY CHAIN with SUB-CONTRACTORS
WAREHOUSES
Supply Chain Excellence Award APICS Feb 2015
12
Manufacturing Model
Flexible and
independent
manufacturing
Supply Chain Excellence Award APICS Feb 2015
13
Flexible and Independent Manufacturing
Front-End
Back-End
Morocco
France
(Crolles, Rousset, Tours)
Italy
(Agrate, Catania)
Malaysia
Singapore
Philippines
China
(Shenzhen)
Malta
Supply Chain Excellence Award APICS Feb 2015
14
Work Force,
Technology &
Financial Roadmaps
Key Investments
decisions
Detailed Investment
decisions
Detailed Investment
decisions & Allocation of
existing capacity
Consumption of
Allocated Capacity
Usage of Existing
Capacity
Planning Exercises & Cycles
to Guarantee Consistency
Detailed Material &
Capacity planning
Short term Plan
(up to 1 Year)
Medium & Long term plan
(up to 5 years)
Sales &
Marketing
Forecast
Execution
Critical resources
requirement
Strategic & Financial Guidelines
Rough-cut
capacity planning
Customer
Backlog
Management
Management at
Equipment level
PLANNING
EXERCICES
RESOURCE
MANAGEMENT
5 Years Plan
2 Years Plan
Budget
Sales &
Operation Plan
Order Scheduling
Master Production
Scheduling
Shop Floor Scheduling
Supply Chain Excellence Award APICS Feb 2015
15
Maintaining a Competitive Supply Chain
Demand
• Demand management
Planning
• Planning process
• Inventory
management
Supply
• Cycle time
• Supply visibility and
predictability
• Supply strategy
Governance and Change management provide the mandatory framework to address Demand, Planning and Supply
Supply Chain Excellence Award APICS Feb 2015
16
Disruptions into Competitive
Advantage
Supply Chain Excellence Award APICS Feb 2015
Volcanic Ash Cloud Over Europe…
The dense volcanic dust caused air traffic to STOP and left hundreds of
thousand stranded in Europe and throughout the world.
Supply Chain Excellence Award APICS Feb 2015
18
European Airports Go Quiet
As in Praha, many airports throughout Europe cancelled all flights
impacting worldwide airfreight.
Planes stayed on the ground for more than a week due to the danger of
volcanic ash damaging aircraft engines.
Supply Chain Excellence Award APICS Feb 2015
19
What happened to ST Business?
Supply Chain Excellence Award APICS Feb 2015
2 Main Transportation Routes
Were Directly Affected
Asia to
Europe
Supply Chain Excellence Award APICS Feb 2015
21
Team Behavior and Effectiveness
• Company Infrastructures & Services Formal announcement to ST Stakeholders & Partners
• Global Logistics & Warehousing War Room briefings
• Conf calls held twice daily at 09:00am & 03:00pm daily
• Global Logistics & Warehousing Daily bulletin
• Bulletins issued twice daily to the ST management stakeholders after each War Room briefing
• Global Logistics & Warehousing Help desk
• Setup helpdesk in Singapore and Geneva to acknowledge and address customer inquiries and requests in addition to the daily bulletins
• Global Logistics & Warehousing Crisis management
• Speed, agility & quick thinking of the logistics team Full control to overcome the many unknown variables. Quickly transformed into solutions & advantages for ST.
Supply Chain Excellence Award APICS Feb 2015
22
Diversion Processes as a Standard Feature
Leveraging
local skills and
people
empowerment
Supply Chain Excellence Award APICS Feb 2015
23
Tools and Methodologies to Map Risks
• Global events
1. Flood and water based
events
2. Large natural Fires & smoke
residues
3. Hurricanes, Tornadoes,
Monsoons
4. Volcanic Eruptions, ash fall
out
5. Snow & winter storms
6. Freezing conditions
7. Pandemics
8. Lighting & electrical storms
Supply Chain Excellence Award APICS Feb 2015
24
Route Diversions
Singapore Barcelona St Genis
Hong Kong Singapore Barcelona St Genis
Singapore Roma St Genis
Singapore Milan St Genis
Singapore Doha St Genis
During the 10 day crisis, the team put in place several route diversions
to protect customer deliveries
France Casablanca Singapore & Hong Kong
Italy Malta Singapore & Hong Kong
Saint-Genis Barcelona Los Angeles
Asia
to
Europe
Supply Chain Excellence Award APICS Feb 2015
25
Customer Focus as Key Priority
During this period, Global Logistics & Warehousing (GLWO)
diverted 132 tons of freight, while limiting the cost of
diversion to below 1M$
During those 10 days, this effort protected 50M$ of business
Supply Chain Excellence Award APICS Feb 2015
26
…Turning into a Competitive Advantage
Moreover, ST extended its logistics services for the benefit
of Key Customers and Suppliers who did not have such
capabilities.
Supply Chain Excellence Award APICS Feb 2015
27
Japan Earthquake and Nuclear Disaster
Northeastern part of Japan suffered
serious devastation and destruction
• The biggest earthquake in history,
magnitude 9.0
• The biggest tsunami hit the long
coastal area across Japan on the
Pacific Ocean
• The Fukushima nuclear plant was
destroyed and affected a large area
of Japan with radiation pollution.
IMPACT
Supply Chain Excellence Award APICS Feb 2015
28
Japan is a Key Materials Supply Source
Japan represents:
• 60% on the Raw Wafers global supply
• 50% on the Fab Chemicals global supply
• 90% on the BT* Core Substrates global supply
• 70% on the Raw Copper for leadframe global supply
* BT Bismaleimide-Triazine
Supply Chain Excellence Award APICS Feb 2015
29
Consequences for the Longer Term
• Change in business model: move from ASIC/semicustom to standard
Ics
• Current shortage finally enabling Japanese ICs companies to push standard parts
at domestic OEMs instead of usual semicustom chips
• Seen as an opportunity for Japan IC makers:
• to produce in larger volumes at lower cost
• to lower the number of employees needed to support custom designs
• to enter foreign / emerging markets
• But also an opportunity for non Japanese players to sell standard ICs to Japanese
OEMs
• Change in the OEM supply chain: purchasing components from local
and neighboring countries (Nissan Motor)
Supply Chain Excellence Award APICS Feb 2015
30
Speed to React
Global Purchasing Office Crisis Involvement
• Immediate intervention in the field (Taiwan/Korea) on Tuesday 15th
March to secure BT Core / Substrates (ST 1st IDM to visit substrate
suppliers after the tragedy)
• Immediate work with Global Purchasing / Corporate Packaging to
identify and set qualification of alternative cores and secure the supply
• Daily conference call with Operations/Groups/Suppliers to monitor
crisis with excellent team work within ST
• Top Management weekly consolidation conference call
• Continuous presence of Global Purchasing and Management in
Taiwan and Korea since 15th March, with intensification on the next 2
critical months of April and May, including visits to Japan.
Supply Chain Excellence Award APICS Feb 2015
31
Running the Clock
with Daily Systemic Approach (PDCA) • Supplier / Critical subject specific sub-teams (both cross-functional):
monitoring action plan execution and collecting updated information
• Global Purchasing: Synthesizing and dispatching information
• Operations /Global Purchasing: Prioritizing actions
• Running according to “Crisis center scheme” reported above starting Monday
March 14th constantly until more than 8 weeks after the event.
Starting from Raw materials tables and Supply Chain mapping with
Supplier Performance Evaluation (SPE) already in place
Supply Chain Excellence Award APICS Feb 2015
32
Understand Russian Dolls
Downstream Impact
CIS / CSM APR 2011 ST Confidential
The substrates chain is much complex and longer
16
STSubstrate
makers
BT core
materials
copper
foils
glass
cloth
Dry
film
Solder
mask
glass
fiber
power
outage
fillers
Our supplier’s supplier’s supplier’s supply
till Feb 2011= US$23.4 million
The Substrates Chain is Much Complex and Longer
Supply Chain Excellence Award APICS Feb 2015
33
Visibility as Key Prerequisite
Standard reporting for daily updates Company wide
Supply Chain Excellence Award APICS Feb 2015
34
Differentiated Approach
• ST has promoted - as much as possible - loyal approach towards
Japanese suppliers as outcome of joint programs and regular
communication by
• increasing confidence and assessment on the recovery plan
• anticipating competition
• One example - Nikko Metals feedback:
“Thank you so much for the good discussion and positive remarks during our last
conference call on Friday, April 29. We are glad that you trust our production
capability again.” (Nikko Metals May 2nd, 2011)
Supply Chain Excellence Award APICS Feb 2015
35
…But Leveraging Flexible and
Multisource Supply Chain
0
1
2
3
4
5
MOLECULAR/PRODUCT NAME
RAW MATERIAL MANAGEMENTFOR ST
# Sources On qualification # Sources Qualified # ST Sources Qualified
Flexible and
independent
manufacturing
And multiple
material
source
Supply Chain Excellence Award APICS Feb 2015
36
Wins/Upsides Effect of the Japan Crisis
• We increased our supply to different key markets:
• Automotive +300k/week for different product lines
• HDD +8M/week components
• Printer +100k/week products
• In addition to the important revenue increase, emphasis on
addressing supply chain disruption prevented those market from
sustaining severe cost of missed volumes (Cars, PCs, Printers…)
Supply Chain Excellence Award APICS Feb 2015
37
Conclusions
Supply Chain Excellence Award APICS Feb 2015
38
Conclusions
• People: Strategically position key functions for the supply chain and its Executive
Management in the geographical areas to drive decisions.
• Core Competencies: Internal knowledge & Competencies of the Company Supply
Chain & Operations is fundamental. Be in direct control of the key enablers, operational
monitoring (KPI) & decisional controls embedded in the internal structure.
• Infrastructure: Integration of the all Company logistics activities & the optimization of
the transportation network, execution processes & operational enablers.
• Operational Agility & Flexibility: Rely on partnerships and the contribution of
suppliers (risk & benefit sharing) to respond to Customers’ supply chain request for
aggressive trade-off between efficiency and responsiveness--so called flexibility.
• Visibility and Speed: System integration. from planning to supply, from long term to
short term, with daily refresh from material to end products that allow to timely tactical
decision-making and to propagate them around the whole supply chain.
Supply Chain Excellence Award APICS Feb 2015
39
Thank you!
Supply Chain Excellence Award APICS Feb 2015
40
Recommended