seagate inbound supply chain demand driven supply chain

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  • 1. Seagate InboundSupply Chain Demand Driven Supply ChainAdvantages

2. Seagate Technologies Overview Largest disc drive manufacturer in the world $7.6B Revenues (FY05), 44,000 employees Vertically integrated manufacturer: Shipping ~100M drives / year Consuming ~90M parts / day 4 wks supply to hundreds of customer hubs 3. The Disc Drive Business The Extreme Sport side ofHigh-Tech Manufacturing - High Capital Costs - Demanding Quality - Seasonal Demand - Volatile Forecasts - Rapid Price Erosion - Narrow market windows- Bleeding edge technology 4. Supply Chain Building Blocks - 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 1QCY95 3QCY95 1QCY96 3QCY96 1QCY97 3QCY97 1QCY98 3QCY98 1QCY99 3QCY99 1QCY00 3QCY00 1QCY01 3QCY01 1QCY02 3QCY02 1QCY03 3QCY03 1QCY04 3QCY04 1QCY05 3QCY05 1QCY06 3QCY06 1QCY07 3QCY07 1QCY08 3QCY08 Desktop Enterprise Notebook Non-Mission Critical PVR Gaming Other CE/Non-Compute Handheld Note: % Growth/Qtr is compounded Source: Seagate market Research Minimize Labor Costs - Asia Operations

  • Mfg. Automation
  • FoF
  • FIS
  • Flawless Execution
  • Inbound VMI
  • E2open
  • eKanban
  • Process Automation
  • Supply Chain Dashboards
  • EnterprisePlanning
  • End-to-End Synchronization
  • Mass Customization
  • Configure-to-Yield
  • Waterfall-to-Demand
  • - (DBR)Drum,Buffer,Rope
  • - TOC Decision Support

5. Seagates Four Steps to Demand-DrivenTransformation

  • 1. Build to Forecast
    • Volatile demand drove up inventory levels
  • 2. Hybrid Build-to-Forecast Model
    • Implemented buy-side VMI and stocked customer VMI hubs
    • Implemented PRTMs PACE Product Development Framework
  • 3. Hybrid Build-to-Demand Model
    • Implemented Autoreplenishment and initiated Strategic Buffer program
    • Used SCOR reference model to benchmark against Best Practices
  • 4. Channel Synchronization
    • Gained complete, timely and accurate channel data reporting

6. Build-to-Forecast Model: 1999 Customer Suppliers Seagate Material Flow Information Flow HDD Factories Assy Factories DCs & OEM Hubs

  • Hockey Stick demand production (~50% final 4 wks)
  • Long production runs grouped by material availability
  • Finite Scheduling highly variable future demand
  • Low Customer Service levels
  • Minimal flexibility

7. Chasing the Forecast: 1997-2002 ~50%

  • Factory Capacityforces Build Aheads
  • High inventories levels to service customers
    • -Model mismatches
    • -Frequent stockouts
    • -High logistics costs

8. Seagates Inbound Supply Chain Buy-Side Visibility, Efficiency, Agility DEMAND SUPPLY Customers Distributors EMS Suppliers VMI Hubs Customers - SQE Time-to-QualitySupplier quality issues, eventsReal-time visibility- Demand/Supply Visibility Real-time visibility, FP to E2open Forecast, Hub Inventory, Pulls - Process Automation Transaction, document, task and process integration with Partners - Lean Replenishment -iKanban, eKanban material kitting - Collaboration Manager, Event Manager iProcurement, eSourcing Real Time document, task management.Integrated global indirect procurement, and sourcing 9. Hybrid Build-to-Forecast Model: 2000-01 VMI Hub HDD Factories Assy Factories DCs & OEM Hubs

  • Customers implement VMI: Seagate stocks hubs
  • Buy side Vendor Managed Inventory implemented
    • Better asset utilization, greater continuity of supply visibility
  • Factory of the Future Automation
  • High Finish Goods inventory

Demand Pull Demand Pull Forecast scheduled Customer Suppliers Seagate Material Flow Information Flow 10. Inbound Supply Chain Completing the Demand Driven Journey 11. Demand / Supply Architecture(via E2open Network) Singapore China 7 Seagate Sites

  • POs (3A4)
  • PO Change (3A8)
  • Forecast (4A2)
  • Hub Rec. (4B2)
  • Hub Cons. (4B2)
  • Inv. Status (4C1)
  • Pricing (3A2)
  • BCI (3C3)

Web UI B2B Server-to-Server 36 Suppliers SC Process Manager (Order, Forecast, & Inv.) Information Manager - Doc Archive & Reports RosettaNet EDIFACT

  • Common VMI process across the enterprise
  • Single Collaborative view of Seagate supply chain

Excel Thailand Customers RosettaNet (4) Distribution22 AsiaPac 11 EMEA 04 Americas EAI Hub 42 Customers Distribution POS,OEM PO, (PO Changes, Forecast, Commit) Information Manager - Doc Archive & Reports 7 3PL Hubs Customers EDI Direct Top Tier

  • Business Transactions Handled (RosettaNet):
  • Inventory Report (4C1)
  • Purchase Order (3A4), PO Change (3A8),PO Cancel (3A9)
  • Forecast (4A2), Commit (4A5)
  • Hub Receipt.(4B2), Hub Consumption. (4B3),
  • Inventory Status (4C1), Delivery Notice (3B2)
  • Pricing (3A2), Buyer Created Invoice (3C3)

212 Suppliers Server-to-Server 42 Customers

  • Why it Matters:
  • - Inventory ownership deferred to point of consumption
  • - MRP Output to Suppliers & Commit within 24 hrs
  • - Visibility of demand, supply, inventory, delivery
  • - Timely and labor saving transactions of POs, Receipts, Invoices, Payments
  • Increased supply side responsiveness, agility,
  • Scales with the business

12. Why Use RosettaNet PIPs RosettaNet Traditional EDI

  • Real-time
  • Internet-enabled
  • XML
  • Global
  • All businesses
  • Standard industry dictionaries
  • Security support integrated
  • Optimized for easy programming & data transparency
  • Batch
  • VAN-enabled
  • X.12/EDIFACT/JECALS
  • Regional
  • Large businesses
  • Custom industry dictionaries
  • Security support not integrated
  • Optimized for compression

versus 13. The Web based VMI Management Collaboration Report 14. VMI DDSN Metrics

  • More than 90 millions parts used a day
  • More than 500 different part numbers
  • More than 100 suppliers
  • More than 100 lines with frequent product change over
  • Daily quality alerts
  • In-house inventory and buffer with 3PL
    • Frequency changes in receiving and deliveries
    • Increased receipts transactions
    • Flexibility, reliability in support
    • Cost

15. Inbound Supply Chain Results

  • Objectives:
  • Multi-tier visibility
  • Data accuracy: Eliminate manual data entry
  • Value :
  • Increase material velocity & inventory turns
  • Direct connection to backend systems
  • Metrics :
  • 100% Direct Materials transactions
  • 90 million parts processed per day
  • 3000 PIPs/day
  • 212 Suppliers connected
    • 36 via B2B
    • 186 via Web UI & Excel Download
  • Project Scope:
  • All direct materials
  • Business Processes:
  • Order Management, Forecast Planning
  • Inventory Supplier/VMI, Supplier Collaboration
  • Protocols:
  • RosettaNet (RNIF 1.1 2.0) EDI,E2open B2B Client data transport
  • Payloads:
  • RosettaNet PIP, Custom XML data format

VMI Hubs SUPPLY EMS Suppliers Foundry 16. Hybrid Build-to-Demand Model: 2002-03

  • Auto Replenishment implemented
    • Rules: 1: OEM Stock-out, 2:OEM excursion, 3:Discrete backlog etc.
  • Lean Manufacturing focus on Overall Equipment Effectiveness (OEE)
  • Value stream planning launched
  • Implemented internal eKanban demand replenishment systems

Customer Suppliers Seagate Material Flow Information Flow 17. Seagate eKanbanDrive clean room Assembly

  • AReal TimeMaterials Requisition pull system
  • Each supply chain is linked with a Kanban screen
  • Response, status and priority arevisuallydifferentiated and distinguished
  • Keeping raw inventory between 2-5 hours

18. eKanban Factory Replenishmentto Cleanrooms Vertiveyor System

  • User at production area will click on the ikanban screen to activate material request

Production Clean Room Kitting Area

  • Material handler will process th

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