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Agilent Technologies is the leading provider of test equipment for the semiconductor industry. Its California Semiconductor Test Division (CSTD) specializes in serving the highly competitive flash memory sector. Brent Hunter, Agilent's materials manager, says his company's planning, sourcing and manufacturing processes are "the mother of all supply chains because of the extreme demand volatility, highly customized and evolving engineering solutions, low volume, high mix.
"Swings of up to 70 percent in customer demand - both up and down - are increasingly common," says Hunter.
Three years ago, Agilent's internal manufacturing strategy depended completely on legacy systems, but as Hunter explains, there was no visibility, no velocity and poor accuracy. It brought in Webplan's RapidResponse application to drive its supply chain in conjunction with the legacy systems. The results were dramatic. Planning that had taken two to three weeks were done in 24 hours and published all the way down to tier two and tier three suppliers. Two years after deploying Webplan's RapidResponse, Hunter says that efficiency level, i.e. days of supply, was cut by 70 percent.
However, just in the past year, Agilent decided to make another radical change to its manufacturing and supply-chain processes. To gain more speed and more supply-chain flexibility, it has outsourced its manufacturing and much of its sourcing to a contract manufacturer.
"While outsourcing presents tremendous financial benefits, this arrangement creates new supply-chain challenges in terms of visibility, responsiveness and performance management," says Hunter, adding that Webplan met the challenge.
Using Agilent's new Oracle system, the tech team organizes and outputs all supply-chain data such as item attributes, lead-times, etc. These are manually input to the Webplan application that collaboratively produces a solution for the entire supply chain. It quickly proposes and examines multiple 'what-if' scenarios to respond to a variety of exceptions, including the inevitable engineering change orders. It also produces an exploded bill of materials that specifies which items the contract manufacturer is responsible for and which items Agilent's sourcing team must procure.
"Historical supply-chain management practices and manufacturing structures simply don't meet the dynamic needs of our business nor our investors," says Hunter. "As we have evolved in the midst of a very volatile market, Webplan continues to serve as a critical enabler to not only meet key milestones, but also to quickly stabilize a rapidly evolving manufacturing structure."
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