Case Study

ON Semiconductor Uses SupplyChainGuru.com to Model Constraints and Improve S&OP Process

Objective

Improve supply chain modeling practices to increase visibility into factory capacity and improve decision-making capabilities

Solutions

SupplyChainGuru.com

Results

Decision-making timeframe went from 2-3 weeks to 1-3 days, involves far fewer site-level engineering resources and drives optimized global capacity utilization

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“SupplyChainGuru.com has allowed us to achieve the business model we were looking for where the industrial engineers don’t have to be involved in every scenario that the business units or the supply chain professionals come up with. This has drastically improved the speed of our decision making.”

ON Semiconductor Uses SupplyChainGuru.com to Model Constraints and Improve S&OP Process

ON Semiconductor is a $3.5B corporation based in Phoenix, AZ that provides semiconductor solutions that help engineers solve their unique design challenges in automotive, communications, computing, consumer, industrial, medical, and military/aerospace applications. While sales and operations planning (S&OP) for any organization of that size can be complex, ON Semiconductor sets a whole new benchmark for complexity.

Challenge

Each of ON Semiconductor’s four separate business units competes for production capacity across the organization’s 14 global factories. To further compound complexity, production processes can include as many as 287 steps and involve up to 178 tools, each of which can become a constraint. ON Semiconductor’s customers often have stringent design specifications and quality requirements, forcing ON Semiconductor’s business development team to be able to provide solid commitments, sometimes up to two or more years in advance, in order to win the business.
“Lack of network optimization at the tool level made our business inefficient,” said Tim Maloney, Director of Global Industrial Engineering at ON Semiconductor. “If the business unit wanted an answer, they had to talk to the supply chain team which had to talk to factory planning who would then instruct industrial engineering to build and run the model. The engineers had to spend more time running models, leaving them with little time to make the factory run more efficiently or fix problems. We needed to get them out of that loop so they would have more time to focus on overall factory efficiency.”

Solution

The team at ON Semiconductor needed a solution that would allow them to make decisions faster and in a far more scalable fashion. By removing the need for tribal knowledge in the S&OP process, factory management could become more comfortable allowing corporate planning to determine what should be produced at the factory level. They needed a decision support layer that could enable them to make optimal decisions when current capacity was not available to fulfill potential orders, which could allow sales management to make more informed decisions about which orders to accept, decline, or subcontract as well as when to invest in additional capacity.
One of the primary reasons ON Semiconductor chose LLamasoft SupplyChainGuru.com was because of its ability to handle machine/tool-level constraints and standardize the S&OP process across multiple factories. This standardization improved corporate visibility and allowed for coordination across factories for improved capacity management, decreasing the need for site-level engineers to get involved in the modeling process.

Results

“SupplyChainGuru.com has allowed us to achieve the business model we were looking for where the industrial engineers don’t have to be involved in every scenario that the business units or the supply chain professionals come up with,” says Paul Stickel, Global Supply Chain Industrial Engineer at ON Semiconductor. “This has drastically improved the speed of our decision making.”

Production decisions that once took 2-3 weeks now can be made in 1-3 days with more confidence than ever before. Faster-decision making combined with better coordination across the supply chain gives ON Semiconductor the flexibility and agility they need to continue to be a leader in their market. Knowing they have the right tools in place, the team at ON Semiconductor can move forward with confidence, exploring new ways to build their business and make further improvements in their supply chain performance. SupplyChainGuru.com also allowed ON Semiconductor to augment its legacy planning systems with a flexible solution that could quickly represent changes in the dynamic supply chain.
ON Semiconductor was able to implement the SupplyChainGuru.com system with limited mainframe support. “That really helped with fast deployment,” adds Maloney. “If we had to go through our standard mainframe governance process, we would not have seen the results we’ve seen this quickly.”

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