Tech Company Observer
Insights and Revelations about ERP Software Customers, Vendors, and the Industry
3/7/2013 1:55:00 PM
Author and professor Jared Diamond published an essay in The New York Times a few months ago called “That Daily Shower Can Be a Killer.” In this essay, Diamond argues “the importance of being attentive to hazards that carry a low risk each time but are encountered frequently.” He points out that Americans do the opposite – we overestimate the risk from events that are beyond our immediate control, and underestimate the risk from events that are within our control.
American baseball seems to me to be an exception to this tendency. In baseball, it’s often said that the team that masters the routine play wins the game. While it’s exciting to see a spectacular diving catch, it’s a good bet that same player has spent a lot more time drilling on more routine plays than diving. The team that doesn’t execute well on the routine plays has little hope of making up for this with their superior ability to make great barehanded double plays.
The same is true for ERP implementations. The biggest risk to successfully getting things done isn’t the failure to handle the 2-10% of transactions that are exceptions. It’s the failure to deliver well on that 90-98% of the transactions that should be a routine play. And yet, at the start of a new project or during the evaluation phase for a new project, risks that are relatively uncommon -- but could cause devastating consequences -- may get undeserved attention, while frequently occurring low-risk hazards may be all but brushed off.
It’s human nature that we want to find solutions to the toughest or most unique problems. It’s a challenge, and most of us enjoy overcoming challenges. But, if you really want a successful ERP implementation, keep your eye on how you can consistently execute on the routine plays.
3/1/2013 1:54:00 PM
While it can be difficult to plan for some kinds of "hockey stick growth," the rapid growth that may occur as a result of acquiring a successful product line comes with a bit more warning. This is exactly the situation the Tensoft's newest customer, GEO Semiconductor found themselves in, after they acquired the digital video processing from Maxim Integrated Products, Inc. (NASDAQ:MXIM). Instant volume production for instant new customers though..... Could be a "mixed blessing," if GEO hadn't planned ahead!
Luckily, GEO's management team had the foresight to ensure that their new "instant" customers would be well taken care of, and started planning to scale their infrastructure and processes ahead of the ramp. GEO's CFO, Eric Erdman, contacted Tensoft to initiate the process, having had a successful partnership with Tensoft in the recent past and knowing that we excel in rapid implementations for this niche market.
Tensoft is excited to be able to contribute to this stage of GEO Semiconductor's growth. To read the full press release, click here.
2/5/2013 8:42:00 PM
As hard as it may be to believe, Mother's Day and Memorial Day will be here before we know it. And, sandwiched right between those spring holidays, Tensoft will be holding our 8th Annual FSM User Conference, Momentum 2013. What better way to reflect on 1H of 2013, and re-energize for 2H?
This year we'll be back at a favorite venue in downtown San Jose, convenient for our local and out-of-town customers alike. Look for more training labs, lots of great content, and plenty of opportunities for networking with your peers in the semiconductor industry. Whether you're a Tensoft FSM User Conference alumnus, or will be attending for the first time this year, Momentum 2013 promises to be thought-provoking, informative and fun for all!
12/10/2012 12:50:00 PM
If Gartner’s Jim Sheperd is right, “Multi-Enterprise Commerce” could be the next evolution of ERP. Luckily for Tensoft FSM customers, they’ve already got some of the key elements for this in place, thanks to Tensoft’s integrated solution for the semiconductor industry! Here’s how Sheperd describes the current situation: “The real business problem that today’s manufacturers and distributors are struggling to manage takes place between companies, not within them.” Anyone in the semiconductor industry knows this business problem well. In fact, the fabless semiconductor model offers some of the most complex supply chain scenarios today. ERP systems were designed to handle traditional manufacturing not an outsourced model with multiple suppliers at each stage of the process.
Sheperd’s “Multi-Enterprise Commerce May Be What Comes After ERP” suggests that a solution to the inadequacies of today’s ERP would have elements of today’s e-commerce, sourcing and supply chain solutions, but would also need to “include finance, asset management, traceability, order management, and service.” And, the new solution needs to be “cloud-based services, rather than a series of on-premises systems hidden behind various firewalls,” although Sheperd emphasizes that the cloud alone doesn’t solve this issue
One key element of this solution is solved with Tensoft FSM’s Supplier Gateway, a service that allows Tensoft customers to automate an integration between their ERP systems and supplier data. This is a huge time saver operations and finance teams, as well as customer service. And, because production activity data is available so much more quickly and more accurately, the benefits flow through straight to the executive level.
Tensoft’s solutions for fabless semiconductor manufacturing solve most – if not all – of the issues Sheperd raises, including cloud-based delivery, which has become almost a necessity for most of the companies in this industry. We’ll be interested to see if the term “Multi-Enterprise Commerce” catches on. We’re ready for it in case it does!
9/13/2012 7:30:00 PM
Hot off the press, the September issue of the GSA Forum has just been posted online, featuring a collaborative article entitled “Anatomy of a Successful Supply Chain Integration” written by Tensoft CTO and co-founder William White, Trisha Giacopazzi, Global Customer B2B/Project Manager for Amkor Technology, Inc. and Heather Salonga, SCM Project Lead for Amalfi Semiconductor. The article not only details the steps in a successful supply chain integration, but also offers tips for successful partnering between a fabless semiconductor company (Amalfi), assembly and test provider (Amkor) and SCM provider (Tensoft).
The road map detailed in this article is well worth reading for any semiconductor industry insider. It outlines many of the necessary steps in a successful integration, and emphasizes the need for organization, visibility, collaboration and prioritization within each of the companies involved. As William White elaborates in the article: “Our final tip is to stress the importance of visibility . . . Integration quality can suffer from a lack of internal focus on the quality and repeatability of SCM integrations and perceived value at the executive level . . . Knowing what is important helps all of the collaborators deliver.”
Take a look at the article for yourself online or check out the entire issue on the GSA Forum website. You can also check out a PDF of the article on the Tensoft Resource Center.
8/16/2012 12:05:00 PM
As a software company, we’re always looking for – and working towards - repeatable processes, both for our own efficiency and in order to pass along the benefit of that efficiency to our customers, in the tangible form of cost savings. This goal is so woven into the fabric of our company that we’ve put a lot of thought and effort into how to provide fixed price upgrades for our customers, which is exactly what we’ve been doing this year. And, we’ve mapped out a process that can be completed in four weeks, including a two week User Acceptance Test (UAT) period. We’re pretty proud of that, and it’s been well received by our customers too.
Compare that to the revelations in the 2012 Oracle Applications User Group Survey, “ERP Upgrades: What’s Your Philosophy?” The survey’s executive summary states: “The typical length of time for an enterprise/ERP upgrade is between six and 12 months, as cited by 44 percent of respondents.” A little further in the report, it turns out that 32% of the survey participants reported that their upgrade took over 12 months. Only 9% of respondents completed their upgrade in three to six months, and only 3% in less than three months.
Granted, 72% of the respondents were from mid- to large-sized businesses, which the survey defines as over 1,000 employees (see Figure 7, page 10). Even if we assume that the 27% defined as “small businesses” generally took less time to upgrade, some of those small businesses went through long upgrade processes.
Just do the math. 27% of the survey respondents are “small businesses” and only 12% of the survey total completed their upgrades in less than six months….
Maybe these were the exceptions mentioned in the survey, where it states that: “the vast majority of ERP upgrade efforts tend to be short in duration, fall within reasonable budgets, and rarely disrupt the business at large?” Because I really can’t see how a 6+ month upgrade could have a reasonable cost and not disrupt a small business.
6/25/2012 2:35:00 PM
Last week I noticed an article about a new Android app that’s integrated to Microsoft Dynamics GP, allowing users to submit their timesheets any time, any place, via their mobile phone.
While there’s been an explosion of mobile apps over the last few years, my personal experience with consumer mobile apps made me wonder how much use business apps are really getting. While a quick search didn't find anything specific on that Amy Gahran’s March 21, 2011 article from CNN Tech cites some interesting general data from mobile metrics firm, Localytics. In a recent study, they found that only 26% of downloaded mobile apps are used more than once! This would seem to indicate either issues with the applications themseleves, or some sort of mismatch between the apps and user needs.
So, what are the key drivers for accounting and/or ERP software mobile apps? What needs are users looking to fulfull with mobile apps? One key driver is timeliness – real-time access or delivery of accurate up to date information, anywhere and any time. The Aberdeen Group's report on "Mobility in ERP 2011" correlates timely access to information to operational success and the ability to react quickly to events:
“ERP provides decision makers with the visibility into their business that can assist in strategy execution. It is important for this information to be as accurate and timely as possible. A decision may be wildly inappropriate if based on obsolete information. When critical business events occur, decision makers need access to timely and accurate information so that they can react accordingly. Mobile access ensures that this information is getting to the right people at the right time. With Best-in-Class companies 68% more likely than all others to be notified in real time of exceptions, those companies are more likely to react immediately, regardless of location. In Laggard companies, less than a third even distributes ERP information through emails, texts, and calls of ERP alerts. Once again this puts Laggard companies at a significant disadvantage in reacting to business and market events.” (Read full text: http://websan.com/downloads/Mobility_for_ERP_Aberdeen.pdf)
Tensoft's High Tech Dashboard (HTD) includes mobile access, which was developed to meet this need. Tensoft HTD provides an overview of key business data in real-time. Daily updates create feedback loops and performance monitors via daily email alerts sent to the executive team. This kind of visibility can have a significant impact on operations, and has made this functionality a favorite among many of our customers.
If you haven't had a chance to look at Tensoft HTD, here's an 8 minute demo: http://www.tensoft.com/video/2011-12-22_HTD_Demo.wmv. Please contact us if you'd like more information.
5/29/2012 2:11:00 PM
I'm really pleased to say that this year's user conference got great feedback from attendees! That's always gratifying to hear, of course, but especially so when our perception matches the response. Speaking for myself, I have to say that I was impressed with the level of participation from customers, some of whom are pretty new users. And, this was another year for great guest speakers as well.
The conference kicked off with a brief opening session, followed by "What's New in Tensoft FSM?" After that, the break-out sessions began. This year we had such diverse topics as Production Operations Review and Updates, How to Survive Your Next Audit & Spend Less Time with your Auditors, An Order to Cash Process Tune-up, Getting the Most Out of Dynamics GP, Understanding Inventory Data, and Product Configuration. This year we added more two hour Hands-on Training Labs, such as the popular Report Writing and Planning labs.
We got to see some really impressive customer presentations during Innovative Extensions and Uses for Tensoft FSM, and awarded a Kindle Fire to the presenter with the most votes for their "Best Innovative Extension and Use." The guest presenters were outstanding this year too. Supply chain expert Mel Nelson's presentaation was Best Practices in Sales and Operations Management, a discussion on the challenges of Sales & Operations Planning (S&OP) and strategies for overcoming these. Amkor's Trisha Giacopazzi, Amalfi Semiconductor's Heather Salonga and Tensoft's William White joined forces for a Vendor Integration Case Study, discussing the goals unique to each participant in the integration process, along with pointers on what makes for a successful integration process.
Finally, we wrapped up the last day with our traditional closing session on product direction. As usual, there was lively discussion around the product wish list, and plenty of great, actionable suggestions. And, again as usual, next year at the opening session of Momentum 2013, we'll demonstrate the enhancements that were developed from Momentum 2012's closing session - hope to see you there!
5/2/2012 8:45:00 AM
We've been seeing strong signs of optimism about the economy in our customer base and in the prospective customers as well, so I was interested to see the results of PwC's survey of 60 multinational U.S. industrial manufacturing companies. While this is a somewhat different segment of manufacturing than most of our customers, I think there's definitely enough overlap to be relevant to high tech.
Based on the survey summary released today, these companies expect global economic growth this year and are planning accordingly. Here's a quick overview of some of the findings:
· Most survey respondents plan to increase hiring in 2012.
· The majority of those surveyed plan to increase investment spending this year.
· Companies report improved profitability in recent quarters.
· There's less worry today about growth barriers than in the recent past.
One section of the survey that may be of particular interest to readers here is how the overwhelming majority of these companies have used technology to help achieve their strategic objectives to date. In fact, a full 98% of these companies credit technology for improving operating performance in areas such as business intelligence and reporting and manufacturing and supply chain/distribution processes. Most also cite increased business agility as a benefit of technology investments.
Going forward, 71% of these companies will be looking to digital change and transformation as a key enabler for their business growth over the next 1-2 years. Why? The two most common reasons are customer demands, especially for product information access, and supplier demands, especially for order management capabilities.
Finally, 57% stated that their immediate plans for technology investment include cloud computing.
It's worth reading the entire summary, if you have a chance.
4/23/2012 2:44:00 PM
It's not that traditional ERP Inventory systems don't work for everyone - they just don't work well for fabless semiconductor operations. Trying to make them fit is much like trying to force your left foot into your right shoe - you may be able to jam it in, but it won't be comfortable or highly functional.
So, what's missing in traditional ERP inventory systems that fabless semiconductor companies really need to have in their systems? Here's a short list:
1) Genealogy (Process History Tracking) - Traditional ERP Inventory functionality simply does not provide genealogy tracking. Fabless semiconductor operations typically need to track their entire process history, mapping every step the product has been through, including re-work. For each production step you need to know the process completed, the vendor used, the procurement and production information, and all of the key attributes collected. Once you have this genealogy attached to a product, fabless operations typically need complete forward and backward tracking by genealogy from the production process to the customer and back (returns).
2) Specific Product Identification (Lot Number/Date Code) - Most traditional ERP systems only offer Lot Tracking or Serialization - with one tracking number associated with the part. Most fabless companies mark their product with more than one key tracking attribute - often the Fab Lot Number and Date Code. A common additional complexity is lot splits and lot merges - which makes it more important to accurately collect the individual tracking attributes for your product.
3) Product Attributes - Beyond the product identification attributes, there is often other information that fabless companies would like to collect during the production process. Examples include the test program used, the test board, the mask set, an internal lot number, and the assembly lot number. Traditional ERP Inventory systems typically do not let you collect unlimited attributes about your product during the production process.
4) Process Cost History - Traditional ERP Inventory systems offer no solution for maintaining a process cost history. They also do not support semiconductor product costing and inventory earned value requirements. Semiconductor costing has complexities and unique requirements unlike any other product. Fabless operations typically need to maintain complete cost history by step in the production process. They need to understand standard and actual cost and yield by step in the production process, and detailed cost variances by step.
5) Reclamation Handling - Traditional ERP Inventory systems lack the ability to allow previously discarded materials to be brought back into the system. Fabless semiconductor operations often need a system for reclamation of previous yield loss (bonus). They need to have the ability to bring back previously discarded materials, including the full product genealogy, and allow them to be put back into inventory with appropriate costs.
6) Location Tracking - Traditional ERP Inventory systems do not distinguish inventory by company. Fabless Semiconductor operations typically need to track locations by vendor. Ideally, they should be able to track unlimited locations for each vendor. For example, if your fabs, test houses and packaging house have multiple locations, you should be able to track materials at each location.
7) Integration with Operations Management - Traditional ERP Inventory systems are not designed to integrate with semiconductor WIP tracking or WIP costing. For fabless semiconductor operations, ERP Inventory integration with WIP tracking and WIP costing is a bare minimum for an effective business system.
Tensoft's Fabless Semiconductor Management (FSM) delivers an affordable, flexible alternative to traditional ERP Inventory systems. Tensoft FSM provides a sophisticated, web-based solution to all of problem areas described above, as well as extensive semiconductor accounting, sales, production, supply chain, and manufacturing execution functionality. Tensoft FSM can also integrate with your manufacturing subcontactors.
Talk to us before you begin a lengthy and expensive ERP implementation, or before you resign yourself to another year of inefficient, error-prone systems. For a reasonable cost today, you can make a long-term investment that will scale as you grow.