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AppliedMicro's use of SAP Solutions to optimize Supply Chain

Chet Gandhi & Animesh Jhalani

May 15th 2013

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AppliedMicro Overview (NASDAQ: AMCC)

• Founded – 1979

• Headquartered in Sunnyvale, CA Company

• Fabless Semiconductor

• Processors and Connectivity chips Industry

• ~1200 customers with ~ 800 active products Customers

• ~ 650 Worldwide Employees

• Implemented SAP - 1996 ERP

• ECC 6.0, CRM, SCM, BW, BO Landscape

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Supply Chain - Path to Excellence

Foundation – Execution

Planning & Optimization

Analytics

Modeling

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Supply Chain - Path to Excellence - Foundation

Execution

• Migrating from In-house Mfg to Outsource environment

• Increase data accuracy through automation

W.O. Simplification

Project

B2B Project

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Work Order Simplification & B2B Project

Bump Sort Assembly + Laser Mark

Test /CO-Pdt

Ship to 3PL Backend

(for Co-pdt)

GI GRs GI GR GI GRs

PO+BWO PO+WO PO+AWO PO+WO PO+WO PO to Foundry

GR GI GRs GI

Confns Confns Confns Yield

Adj

Yield

Adj

Bump Sort Assembly + Laser Mark

Test + Backend Ship to 3PL

GI

WO+PO

GR GI GR

Confns Confns

GR

WO+PO

Confns Confns

GR GR GR

Solid triangles = manual steps, Hollow triangles = automated steps

PO to Foundry

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Supply Chain - Path to Excellence - Optimization

Execution

• Simplified & Automated Transactions

• B2B Automation

New BU

Ability to Scale

Planning

• Build Plan planning through Excel

• Manual bin substitutions

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Business Drivers for Planning Project

Complex Processor Binning New BU

• Support multi-level Binning ~64 products from 1 wafer

• Support Postponement Strategies at die bank and post test

Planning to double in 12-18 months Scalability

• Support “What if” scenario analysis

• Minimum extra master data maintenance

• Solution to allow capacity planning in future

• Reports for easier preparation of build plan meetings

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High Level Business Requirements

• Minimum extra master data set up in APO

• Continue to use ECC the same way Usability

• Automatically handle bin substitutions

• Handle “what-if” analysis

• Master data to be maintained in ECC

Solution

• All ECC reports must work

• Provide real time reporting across products

• Capture historical MRP snapshots

Reporting

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Planning Options in APO - SNP

• Planning similar to MRP

• Cannot account for constraints

• Supports Long term planning

Heuristics

• Cost based Heuristics planning

• Requires accurate cost data to derive reliable solution

Optimizer

• Multi-level supply & Demand matching

• Utilizes constraints and priorities

• Supports Material substitutions

CTM

Capable-to-Match

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SNP Planning Solvers Comparison

Focus Areas Heuristics CTM Optimizer

Functional Coverage

Viability of Plan Obtained

Difficulty of Configuration

Maintenance

Ease of Analyzing Planning Output

Performance

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CTM – Process Flow

SAP APO SAP ECC

SNP – CTM Engine

Planning Results

Transaction Data Master Data

Sales Orders Material Master

Supply Orders BOM + Routings

Inventory Production Versions

Substitution

Parameterization

Supply categorization

Results Analysis:

Planned Orders

Purchase Requisitions

Wafer Starts

Assembly Starts

Fuse & Mark Starts

BPS

Forecast

CIF

CT

M

Run

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Master Data: Only Substitution Rules in APO

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Real Time Reporting: APO Planning Book

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Project Success Factors

Show & Tell from the beginning User

Engagement

• Installed SCM DEV environment integrated with ECC sandbox for ‘real’ data

• Business user engaged regularly from proof of concept phase in SCM Dev

Phased Go-Live approach agreed Scope Control

• Users were available part time only

• Documented Requirements for each phase