Adaptec Inc. Cross-Enterprise Integration

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Adaptec Inc.Cross-Enterprise Integration

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Agenda

• Who is Adaptec?
• TSMC Virtual Fab
• Customer Value Proposition
• Extricity Alliance Solution
• Extricity Positioning in SCM Solutions
• Business Drivers and Benefits from Alliance
• Adaptecs next steps

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Whos Adaptec
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Adaptecs Three Business Scopes

• Storage Networking Solutions
• Fibre Channel, InfiniBand and Ethernet-based
  storage fabric technologies
• Direct Attached Storage
• Market leadership in the SCSI
• and PCI RAID controller
• Host-based RAID controller
• Software Product Group
• Easy CD Creator, Toast, GoBack
• software for CD recording,
• productivity and data protection
• markets. In June 2000, Adaptec
• announced it will spin off this
• division.

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Business Fundamental

• 115 distributors
• thousands of VAR
• Sell to end-users

Source www.adaptec.com
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Adaptecs Virtual Factory

• In 1997, Adaptec implemented Extricity Alliance
  to coordinate the production of its IC products
  through several contract-manufacturing partners
  as fabless semiconductor virtual factory
• Automate shared business processes
• Engineering design
• Demand forecast
• PO(SAP) design specs (PDM)
• Acknowledgement more request
• WIP update
• Shipment notice
• (TSMC-gtAdaptec-gtASAT)

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TSMC Virtual Fab
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• ?????????????????Vertically Integrated(?IBM)?
• ?????????????
• ???????????????????????????
• Internet ??????????(Virtual fab)?
• ???????????????,?????????,??????,??????????????

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• ???????,?????????
• ??????????????????????
• ????(IC????)????Internet?????????,???????????
• ???????????????
• ????????????,?????,??????,??????

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Customer Value Proposition Business Benefits
Desired are Translated into SCM Requirements
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Benefits of End-to-End Value Chain Solution

• OEMs
• Quicker product to market
• Less investment
• Faster response to competitor threats
• Lower cost to manufacture
• Lower cost to design
• Lower cost of failure

• Suppliers
• Increased volume
• Integrated stakeholder
• Rationalize supply
• Parts reduction
• Lower errors
• Lower costs

• Contract Mfrs.
• Increase capacity for sales
• Increase capacity for new products
• Re-deployment of assets
• Plant rationalization
• Less non-value add
• Decrease asset base

• Distributors
• Increase customer focus
• Stocking rationalization
• Reduced inventory
• DC rationalization
• SKU reduction
• Decrease asset base

• Customers
• Customer integration
• POS data
• Continual replenishment
• Lower total cost to service

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OEMers Design Process

• A major OEM recently announced (with public
  fanfare), the introduction of four new product
  lines. The same OEM is notified by his
  distributor that 16 components within these new
  product lines are to be discontinued because they
  have reached the end of their product life-cycle.

Dist
Purchasing
OEM Engineer
Prototype
Testing
Production
Planning ?
Ship

• Charged to develop new product
• Selects component based on prior experience
  knowledge

Sales Marketing
Result The OEM, after having spent time and
money developing the new products, identifying
parts suppliers, performing sales and marketing
functions is now forced to spend millions in the
re-design, re-identification and re-sourcing of
the new component parts.
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2000 Arthur Andersen All rights reserved
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What if the engineer had been notified at the
start of the component selection process that the
components selected were at the end of their
product life cycle?

• 1. How can the entire supply chain look at the
  same BOM at the same time?
• 2. If this is what I want to build by Thursday,
  where can the parts be sourced? From whom can we
  multiple source?

Distributors
OEM
BOM ____ ____
ECO, QOH, OTD AVL
ECOs
Engineer
Adaptec
AVL
Purchasing
OTD
Production
Contract Mfrs
By sharing information in real-time, the supply
chain no longer needs to waitdistributors learn
immediately the engineers requirements and can
plan accordingly. XX is the only electronics
industry player that codifies and automates the
highly individualized and non-customized supply
chain and decision support requirements of an
OEM.
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Contract manufacturers, on the other hand, face
a different type of pain

• 1. They need to be able to aggregate multiple
  BOMs from one OEM
• 2. They need instant visibility to ECOs, AMLs,
  collaborative purchasing, notification and
  management

Team A
BOM
Q What BOMs do I have?
Adaptec
C.M.
Team B
BOM
A These 3 for this OEM
BOM
Team C
Adaptec, as a value chain optimizer, provides
real-time supply chain management tools that
allow contract manufacturers to reduce
inventory increase cycle times decrease
production problems related to parts and
materials identify and resolve production
delivery and logistical problems early
OEM Design Teams
2000 Arthur Andersen All rights reserved
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Distributors and manufacturers face similar
challenges to a contract manufacturer. However,
the aggregation of data and access to accurate
customer data is increased.
OEM
CM
Design Team
Design Team
Design Team
eConnections
Distributor
BOM
BOM
BOM


CM
OEM

• Adaptec allows the distributor to effectively
  manage forecast and planning data with customers
• Provide real-time visibility
• Visibility to ECOs, AMLs
• Communication with C.M.
• BOM cleansing

Design Team
Design Team
Design Team
BOM
BOM
BOM


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Super compressed product life cycles, a
proliferation of customers and competitors with
an unyielding demand for mass customization
requires a solution that everyone can plug into
Electronic Component Mfr.
Designers Engineers
OEMS
Designers Engineers
Contract Mfrs
Designers Engineers
Adaptec
Distributors
Mfr Reps
VARS
Logistics Providers
Dot Coms

• Industry Pains
• BOM Management
• Forecast sharing

• Engineer Charge Orders
• No-visibility to exceptions
• such as ATB, QOH, OTD

• Aggregation of BOMs across customers
• Demand Visibility

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2000 Arthur Andersen All rights reserved
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Extricity Alliance Solution
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Extricitys Four Solutions

• B2B software platform enables companies to share
  information and manage commerce among business
  partner over the internet
• RosettaNet, eRetail, Net Markets, Enterprise
• RosettaNet is a consortium of major Information
  Technology, Electronic Components and
  Semiconductor Manufacturing companies working to
  create and implement industry-
• wide e-business process standards.
• Net markets concentrated on content
• and community want to enable commerce
• and provide value-added services such
• as order, inventory and logistics mngt
• eRetail help to integrate the supply side
• of B2C environments for better planning,
• forecasting, order management,
• fulfillment, order tracking, and returns
• management with their trading partners,
• and to all partners in their e-business supply
  chains.

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Case for Action - Extricity

• Value Proposition
• Extricity B2B is the first platform for B2B
  relationship management that powers and manages
  the full spectrum of interactions among
  businesses over the Internet
• Proposed Scope Of Alliance
• Software Vendor and Business Partner that would
  join xx offering to platform offering to
  strengthen buyer and supplier relationships

• Business Description
• Extricity provides eBusiness process
  standardization and communication tools for the
  component semiconductor industry through
  accelerated partner integration
• RossettaNet based eCommerce partner/alliance
  integration software developer
• Features Functionality
• Semiconductor/electronics component market
  specific solutions
• Current Alliance Partners
• IBM
• Manugistics
• SAP
• Aspen Technology

• Ariba
• Commerce One
• OnDisplay
• Need2Buy.com

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Enterprise Application Integration (EAI)

• Extraction/insertion of information to/from
  business applications
• Transformation of information into different
  forms
• Synchronization of state among independent
  information system
• Process of tying together multiple applications
  to support the flow of information across
  multiple business units and IT systems
• Integration products fall into several categories
• Messaging middleware IBM MQ Series Microsoft
  MessageQ
• Business-process integration Vitrias
  BusinessWare
• Multiple businesses integrate their systems in an
  extended supply chain.
• EAI Competitors
• WebMethods
• Viewlocity
• Vitria Technology
• Tibco

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Risks and Benefits as Partnering with Extricity

• Risks
• Adaptec need skills to help Extricity developing
• Possible resistant change from EDI to EAI from
  big OEMs and distributors
• Suffer time to market, if any other solutions
  existed
• Expose best practice or competitive advantage
  with competitors while product commercialized
• Discounted maintenance, upgrade and alliance with
  other SCM and eMarketplace if its failed

• Benefits
• Customize according to business operation model
• No need to change and fit into the solution
• First mover advantage to attract attention from
  media partners
• Strengthen effective partnership relationship
• Chance to setup standard or form a partner
  networking
• Inexpensive to develop customized solution

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Implementation Strategy

• Understand end-to-end value chain
• Identify competitive advantage and redefine
  business operation model (maybe refer to Best
  Practice)
• Map desired offerings to IT infrastructure,
  information, data format and functionality across
  departments and enterprises
• Prioritize functionality (e.g. identify quick
  win)
• First, identify few seeds of supplier, contract
  manufacturer to roll out buyer side
• Secondly, roll out to Distributors and OEM
  seller side
• Change enablement if theres any process changed
• Benchmarking for continuous improvement

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Extricity Positioning in SCM Solutions
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Extricity Positioning in SCM Solution
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SCM Functionality Matrix
No Functionality Requirements
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Prioritization Map SCM Functionality Requirements
Credit Verification
Payment Processing
Bid/Ask
Send Product Design Specification
Data Sheets
Catalog/Content Management
Performance Measures
Integration Enablers
Demand Exceptions
Fulfillment Visibility
Reverse Logistics
Workflow
eProcurement
Extricity
Collaboration Enablers
Standardization
RFP/RFQ
Product Substitution
Personalization/ Recommendations
Capable to Promise
Immediate Need Short-Term Need Long-Term Need
Profitable to Promise
Functionality is based on Best Practices in
Supply Chain Management and xx requirements.
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Business Drivers Alliance Benefits
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Business Drivers for Digital Markets
Inefficient Channels
Supply Chain Inefficiencies
Time Sensitive Products
Digital Market Opportunities
Volatile Market Conditions
Complex Ordering Processes
Supplier and/or Buyer Fragmentation
Fulfilment and Status Tracking Difficulties
Sourcing Problems
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Supply Chain Management Principles

• The vision is a highly responsive and integrated
  end-to-end value chain synchronized to the
  customers demand rate, with business processes
  that develop, produce and distribute products
  worldwide in short lead times.

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?????

• ?????Alliance????????????????,ROI1400 ?
• ????????????,????????real time??,???????
• ??non-value-add????????????????????,??????,??????
  ?????????
• ??lead time?????????,??????25,?PO??? ???????
• ??WIP????circle time,??WIP,??carrying cost?
• ????????????????,??????capacity planning?

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Reduced Lead Time

• Automate shared business processes
• Engineering design and test
• Demand forecast
• PO(SAP) and Design specs (PDM)
• Acknowledgement request more
• WIP Updates
• Shipment notice
• Query ordering and manufacturing status to
  minimize out of stock or replenishment

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Eliminate EDI Drawbacks

• Cant handle transaction complexity or a rich
  variety of data
• Document centric not Process-oriented approach
• Fixed and inflexible format so that partners need
  to change their internal system
• Limited partners communicating
• Cost is more expensive than platform 1501
  transaction fee per hour affordable to smaller
  players
• Data need to re-keyin which is time consuming and
  error happened

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Adaptecs Next Steps
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Adaptecs Next Steps

• Rollout to most of its suppliers
• Rollout to its OEM and distributors
• Add new processes
• Implement website multi-channel
• Improve Partner Relationship Management
• eNable B2B commerce
• Expand to eMarketPlace?

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High Performance Value Chain Progression...
Value Chain Optimization
Best practice companies perform all of the
activities associated with value chain
optimization

• Manage Integrated Supply Chain End-to-End
• Total End-to-End Thinking
• Simplification and Standardization of
• Processes
• Facilities
• Product Design
• Enterprises Established
• Managed Customer Integration
• Joint Product Design
• Dynamic Supply Chain Synchronization
• Pull Most Products
• Minimum Inventory
• Minimum Parts
• Worldwide Sourcing
• Worldwide Distribution
• Enterprise-wide Capacity Management
• Fully Integrated End-to-End Information Systems
• Information Excellence
• Customers

Advanced Value Chain

• Advanced
• Integrated Cells
• Mfg. Reliability
• Mfg. Flexibility
• Capacity Usage
• Process Rationalization
• SCM Systems
• Make to Demand
• Expanded Customer and Supplier Integration
• VMI
• EDI
• EFT
• ABC of products
• Demand Management and Communication Processes
• Product Complexity Simplification
• Synchronized Processes and Cycle Times
• Product Design for Manufacturing
• Expanded KPI Reporting
• Distribution Load planning

Value Chain Basics

• Start Supply Chain Improvements
• Cells
• Mfg. Reliability
• Mfg. Flexibility
• Shorter Lead Times
• Shorten Lot Sizes
• Process Integration
• Suppler Development
• Team Based Improvement Processes
• SCM Education and Training
• Produce to Replenishment Targets
• Pull Logic with Several Products
• Reduce Inventory
• Introduce SCM KPIs
• Improve Cost Structure
• Awareness of Information Support Needs
• Value Chain KPMs
• ABC Awareness

Value Chain Readiness

• Expand Quality Processes
• Produce to Forecast and Monitor Demand
• Basic Supplier Cooperation
• Recognized SCM Champion
• JIT Pilots
• Growing SCM Awareness and Practitioners
• Several Low Risk SCM Successes
• Basic Customer Collaboration
• Begin Learning Organization
• KAIZON efforts
• Some Cells

• POS
• CRP
• QR

Value ChainInnocence

• Consistent Quality
• Automation of Processes
• Few SCM Practitioners
• SCM Awareness
• Basic Operational Systems
• Quality Teams
• Produce to Forecasts

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AA Supply Chain Service Offerings for the eWorld
Strategy Formulation
Collaborate / Plan
Procure
Fulfill

• Transportation
• Route Optimization
• Warehousing
• 3PL / 4PL
• Inventory Management
• Order Management
• Supply Chain Event Management

• e-Procurement
• indirect
• direct
• Auctions
• Strategic Sourcing

• Network Analysis and Design
• Demand Planning
• Inventory and Replenishment Planning
• Manufacturing Planning / Finite Scheduling
• Supply Planning
• Available / Capacity to Promise (ATP/CTP)

Tool / Software Selection
Business Model Design Implementation
Change Management
ERP / Technology / Integration
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Thanks