James Simpson

1
Getting Ready
For the Rebound
Case Study

• James Simpson
• Senior Director, eBusiness
• San Jose, CA

2
Overview

• About Flextronics
• Hypothesis
• Lethal Trends
• Driving Out Costs by Reacting Quickly to Demand
• Changes

3
EMS Marketplace
OEMs find lower-cost manufacturing, reduced
inventory costs and faster time to market as the
top benefits to outsourcing. Flextronics ranked
1 in customer satisfaction in this Goldman Sachs
survey.
Source Goldman Sachs Global Electronics OEM
Survey Mar. 03, Over 1000 respondents and more
than 200 OEMs around the globe were surveyed.
4
Flextronics Today

• Fiscal year 2003 revenues of USD13.4 billion
• 95,000 employees globally
• 100 manufacturing/design locations on 5
  continents
• 17.9M ft.² of manufacturing capacity in 29
  countries

5
Flextronics Market Segments
6
Hypothesis
Its all about supply chain execution
Supply chain planning isnt enough.
Actually, its quite useless if you cant execute.
Can ERP systems do this?
7
Hypothesis
What makes collaborative planning work within
the supply chain?
Safety stock.
8
Lethal Trends and Challenges for the Rebound

• Managing Material Lead Times Obsolescence
• Shortened Product Life Cycles
• Pricing Pressures
• New Erratic Demand Cycles
• Customization
• New Erratic Demand Cycles
• Reducing Time to Market
• Customization and Build to Order
• Managing Change- Planning vs. Reacting

9
Supply Chain Trade-Offs
Trade-Off
10
Driving Out Costs by Reacting Quickly to Demand
Changes Agility in Integration and Automation
11
Integration Objectives

• Visibility from Unrestricted Information Flow
• Exception Management
• Minimizing Platforms and Systems Reduces
  Complexity and Maximizes SPEED

12
FlexFlow- Automated Data Collection
13
Driving Out Costs by Reacting Quickly to Demand
Changes Agility in Integration and Automation
14
FlexPASS- Procurement Automation and Support
System

• Project Description
• Automate the procurement execution process and
  collaboration with Suppliers. Toolset will
  transmit forecasts, purchase orders, change
  orders, and cancellations on the web, via EDI or
  RosettaNet. Responses from suppliers
  automatically updated in Baan.

• Key Product Features
• Forecast Generation
• Auto PO generation auto data load (e.g.
  pre-pricing, Buyer review, ack data auto load
  into Baan)
• Increased B2B penetration
• Automated change process
• Transparency of transactions for both Suppliers
  and Flextronics
• Exception management
• Integrates with current EDI and RosettaNet
  efforts
• Any-to-any communication with Suppliers EDI,
  RosettaNet, Web

15
Driving Changes in Real-Time
Buyer
System of Record
Suppliers
FLEXTRONICS
3PL
16
Quickly Cost Effectively Managing Change
Accept As Is
Forecast Commit
3C3
MPN Change
Quantity Change
PO Ack
4A4
3A8
3A4
850
Reply with Change
Invoice
PO Change
830
Price Change
Split Line
Header Level
3A9
Forecast Notify
3A7
Create PO
855
810
4A5
Line Delete
Date Change
865
PO Change Ack
860
Line Level
17
Objectives

• Buyer Efficiency
• Less Complex Procurement Processes
• Accurate and Consistent Information
• Visibility for Flextronics and Trading Partners
• Sourcing Savings
• Automation- Reviewing Recommendations
• and Exceptions

18
Evaluating Success

• Fewer Line Stops
• Measure line-stop shortages per week before /
  after
• Improve Responsiveness to Demand Changes
• Measure reschedule push-outs before / after
• Measure 1-week execution of new buys before /
  after
• Measure cancellations executed before / after
• Real Data on Supplier Performance
• Implement objective measurements of supplier
• performance and Flextronics communication to
  suppliers

19
Summary

• Conventional wisdom once told us, big companies
  are unbeatableand eat smaller competitors for
  breakfast.

Not anymore.
These days Its not the big that eat the
smallits the fast that eat the slow.
Source Jennings and Haughton Apr. 02