A Healthy Dose of Chips R1

1© 2014 Qorvo, Inc. Confidential & Proprietary Information Protected by Confidentiality Agreement

A Healthy Dose of ChipsLaura L. DionneSenior Director of Global Planning (Retiring)Qorvo (TriQuint) Semiconductor

Pharmaceutical Innovation in Manufacturing Summit 2015London, UK


A Language LessonChips

U.K.

U.S.

Today’sTopic


A Language Lesson

Chips and Drugs

Drugs

Chips


Why Chips and Drugs?

Lesson to be learned from Semiconductors

Solving these problems at TriQuint

Agenda


Demand Variability

Semiconductor & PharmaceuticalsCommonalities

Inverted BOM

Fin

ished G

ood

sPa

ckagin

gD

rug

Pro

duct

Bulk

/

Act

ive P

rod

Ing

red

ient

Finish

ed G

ood

sPa

ckagin

gU

nte

sted

Die

Wafe

r (S

ilicon, e

tc)

Long Cycle Times: R&D & Mfg)Pharm: 12 – 18 monthsSemi: 4 – 6 months

Expiration / Obsolescence Pharm: 12 – 18 months (Patents, Generics, Shelf Life)

Semi: 12 – 18 months (Phone, PC, Tablet)

Pharm: YearsSemi: Years

Pharm: Int’l Demand, Disti Models, Variations, PackagingSemi: Competitors, Consumer patterns, integration

Margin Pressure Increasing Cost Price

Competition Loyalty Supplier Power Flexibility

Quality Market & Price


So What Do “WE” Need To Do?


A Healthy Dose of Chips

Data Is Key to all analysis and decisions• Clean

• Timely

• Integrated

Active and Proactive Inventory Management • Goals Driven by Data• Manufacturing and Demand Variability• Customer Needs

-Sole Source, Customer Priority, Impact of SO

• Clean and Readily Accessible Actuals • On Hand, Projected • Units, Cost, Location


Forecast Accuracy: Measure & Improve• Degree of Error (How much)• Directional Bias (Under or Over)• Impact of Error (Size of Revenue)• Focus where impact is greatest

Collaborative Demand Planning• Semiconductors can see demand forecasting increase to > 70%

• Requires commitment, engagement and accountability from:• R&D• Sales• Marketing• Manufacturing• Finance

A Healthy Dose of Chips….

One Plan to Rule Them All

Forecast Error

Customer Impact

Expedites

Lost Revenue

Excess Inventory

Underutilized Capacity

Material Shortages


Scenario / Range Planning • Directionally Correct vs. “Accurate”

• All future data is variable• Focus on:• Potential & Risks• “What if” and Action Plans

• Variance for Demand, Supply &Interaction of both

• History contributes to potential variance

Scenario Planning to Determine Action Plans• Hope for the best…… Plan for everything else!

• Understand ramification and needed actions BEFORE they occur



Continuous S&OP• Range Planning

• Scenario Planning

• Trade Off & Risk Analysis

• Decision Orchestration

– Across Organization & Geography

• Event Driven vs. Scheduled

– Assumption capture & evaluate

– Sensing of plan deviation

– Alerting (Monitor & Respond)

Know sooner, Act Faster



Merger Support

Demand ManagementForecast Accuracy

Collaborative Forecast

Inventory Capacity

S&OP Improvement10 day process

Merger Support

Revenue Mgnt

Dash Boards

Scenario Planning

Reporting & Alerting

RapidResponseBy Kinaxis

Results:• Delivery Performance: 90% 97% Consistently since 2012• Inventory Turns: 3.0 4.5 (without Strategic Inventory Builds)• Capital Avoidance: > $20 annually (~ 20% total Capital Budget)• Planning Headcount Avoidance: 25% improvement in Efficiency• S&OP Speed (Sales Forecast Exec Decision): 6 weeks 10 calendar days

Scheduling Planning Analysis Managing the Business TriQuint’s Journey

Data Cleanup

H2’2010 2011 2012 2013 2014 2015

DeliveryPerformance

Analyze Current Methods

Tools

Merger Support

What IF / ScenarioProactive Line Mgnt

Analytics Learning

Curve

AnalyticSkill set

Pro

cess

People

New Metric Alignment

Center of Excellence

“Global Planning


Questions?

Thank You 13© 2014 Qorvo, Inc. Confidential & Proprietary Information Protected by Confidentiality

Agreement

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A Healthy Dose of Chips R1