Effective January 1, 2012, the California Transparency in Supply Chains Act requires many companies doing business in California to provide information regarding their activities to ensure their supply chain is free from slavery and human trafficking.  This law affects all companies that do business in California and whose worldwide gross receipts exceed $100 million.  That includes a lot of semiconductor and high tech companies in our area, so I was curious to see how companies are complying.

I tried a quick search on "CA Transparency in Supply Chains Act semiconductor" and found the following on the first page, in order of appearance: Vishay, ON Semiconductor, Texas Instruments, Applied Materials, Cypress Semiconductor, Micron and Global Foundries.  I'd expected to find Apple there.  After all, Gartner just announced in a January 24 press release that Apple was the top semiconductor customer of 2011, moving up from third place in 2010.  And, they've certainly been in the news lately for the human rights issues that their supply chain audit uncovered.  

Checking back on the requirements of the law, I found that no specific language is required to be compliant, but it does require that the disclosure appear on the company's home page, and that it is conspicuous and easily understood.   Looking through the homepages of both the top 10 semiconductor customers of 2011 that Gartner identified and the hits on my initial search, Apple stands out as one of the best examples of compliance, while others don't appear to be in compliance at all.  Interesting.

  Tensoft’s High Tech Dashboard (HTD) is one of our newer products, but customers who’ve been using it already swear by it. One of the keys to its value is its ability to look at booking/billing/backlog information on a daily basis. With HTD, company executives simply check their mobile device every morning, and get an up-to-date reading of this key performance indicator.

Booking/billing/backlog reports are common for many tech companies, but may not be as familiar to those outside of that industry.  A booking is a new order.  It’s not revenue yet, because it hasn’t shipped, but this data is a leading indicator of where revenue is heading, and whether or not a company is going to make its numbers for the quarter. Backlog numbers indicate how much the company is going to ship, a number which can be time phased to see when it should turn into revenue. Together, these provide a quick indicator of health.

I’m always amazed at the effort companies will put into tracking bookings/billing/backlog manually. Often, we’ll go into a company and discover that one person’s entire job is to maintain a monster booking/billing/backlog spreadsheet. This huge spreadsheet gets passed around the company, but by the time the updates are done and it reaches all key personnel, it’s already out of date.  (Not to mention, highly suspect, due to the high incidence of error inherent to spreadsheets.)

Tensoft HTD both automates this process and provides options to do a lot more with that data.  ERP systems generate a huge amount of data, but this needs to be turned into actionable information to help execs make informed decisions. Tensoft HTD makes use of the data that’s already there in your ERP system, including historic sales data, tactical operations data for execution and forward-looking data used, for example, to see whether there’s enough material to meet supply.

Let’s look at a real world example. One of our long-time HTD customers uses the product to send an email to its CEO every day – before he even gets to the office. This email tells him whether the company is on track or not, by looking at performance indicators such as bookings/billings/backlog against forecast.   And, every salesperson in the company also gets a daily email that says: “Here are your bookings, quarter-to-date, and here’s where you are compared to your quota.” So every day, both the company executives and field salespeople get actionable, behavior-driving information that they can drill-down to a very detailed level.  Now that’s technology-driven motivation!

 While Tensoft has been a Microsoft Gold Certified Partner since 2004, it’s never been as difficult to meet the requirements as it was this year.  That’s because of deliberate changes that Microsoft has made to their Partner Network Program.

IDC analyst Darren Bibby does a great job explaining what’s happened in his blog post, “Microsoft Partner Network - Can We Bring Back Meaning To ‘Gold’ Please?”   In brief, Bibby says that, in recent years, about 50% of all Microsoft Partners were able to attain Gold Partner status.  His point, of course is that:  “50% is not such an elite level.”  By contrast, Microsoft’s Partner Network website states that, currently, “only 1 percent of Microsoft partners worldwide that have attained this outstanding degree of proficiency.”  Now that’s a little more elite!

The other programmatic change that Bibby mentions is that the new Gold and Silver (which is now the top 5%) levels are associated with specific “competencies,” each focusing on very specific knowledge and expertise.  Combined with the more rigorous requirements for Gold, this ensures that a Microsoft Partner that really excels at what they do within these competencies is easily identifiable to customers, partners, and Microsoft employees.  

Tensoft is especially proud to have attained the Gold level for the ERP Competency this year, demonstrating our excellence in the skills, expertise, and resources needed to successfully deploy financial and supply chain management solutions for our customers.  One percent out of approximately 640,000 partners is not bad – we’re honored to make it, and we congratulate all of the other Microsoft Network Partner members who made it as well. 

 One of the highlights of this year's MOMENTUM 2011 was guest presenter Charlotte Diener's session entitled "Planning Rhythm."  Diener has created an excellent Slideshare version of this that's available now to anyone who's interested.  You can link to it here, or search for "The Planning Rhythm: Managing Risk Through Marching to the Same Drum" on Slideshare. 

This brief description of Diener's presentation from the conference agenda applies to the revised slides on Slideshare as well: "Just as world-class manufacturing operates to the drum beat of critical equipment, the excellent supply chain operates to a regular rhythm of processes. The use of a process rhythm is critical to the performance of supply chain planning, irrespective of software. This presentation will explore the critical processes necessary in semiconductor planning, their frequency and duration."

Ms. Diener is an independent consultant with extensive supply chain, turn-around, M&A integration and international experience. Ms. Diener has completed several global multi-million dollar M&A integration projects and the re-engineering of several corporate processes, including a complete re-work of both the supply chains and new product development processes at ON Semiconductor.  Her contact information is included on the slides. 

 This year at Tensoft FSM's annual user conference, we had the privilege of hearing from several really terrific guest presenters and panelists.  Semiconductor supply chain consultant Charlotte Diener kicked things off on the first day with her presentation on "Planning Rhythm."  Here's a brief description of what she covered: "Just as world-class manufacturing operates to the drum beat of critical equipment, the excellent supply chain operates to a regular rhythm of processes.  The use of a process rhythm is critical to the performance of supply chain planning, irrespective of software."  This presentation explored the critical processes necessary in semiconductor planning, their frequency and duration. A great session and a very warm response from MOMENTUM 2011 attendees! 

On Day 2, Ron Jones of the N-Able Group provided some fascinating - and very sobering - insight into "The Tragedy in Japan and the Semiconductor Supply Chain."  He covered how the immediate and subsequent events of the recent earthquake and tsunami in Japan are impacting products and markets around the world, and discussed both possible recovery scenarios and implications to supply chain management in the future.  Ron has been doing a great job covering this topic in his newsletter too, so be sure to sign up for that on www.n-ablegroup.com if you're interested.

Following that, Ron moderated a panel discussion on supplier integration.  The conference agenda described this session as follows: "Supply chain execution is about the fabless company managing the process.  It is also about partnering with your suppliers, exchanging data across your production flow, and communicating the right information to all parties on a timely basis.  Our supplier panel brings together leading industry suppliers (UMC, AMKOR) with fabless companies and an electronics supply chain experts to discuss relevant and current topics important to the semiconductor Industry.  Panelist presentations and a moderated Q&A session provide interesting and helpful insights for all participants."  The guest panelists were Amkor's Trisha Giacopazzi, UMC's K.T.Goh, Dean Strausl from V-Case (and the former Executive Director of the Electronics Supply Chain Association), and the VP of Operations at iWatt, Alex Sinar.  Apologies to our attendees that we didn't plan more time for this distinguished group - this session could easily have stretched to half a day or more!

One small world observation during the conference this year: unbeknownst to us, 2 of the guest presenters had worked together some years ago, and had a chance to catch up over lunch.  Great to see such a strong degree of collegiality among both guest presenters and conference attendees!

Outsourcing some or all of your manufacturing is old news for technology companies. The focus on core competencies, the need to scale quickly while managing cash, and the availability of high quality suppliers have all helped to drive this trend. At the same time technology companies retain the ultimate responsibility for production and on-time delivery to customers. Supply Chain Management (SCM) systems help tech companies manage their supply and demand, and integrating and consolidating information from the distributed suppliers is often an important part of this process.

Advancements have been made in SCM systems and technology support data integration – yet the reality of SCM data integration eludes many. Technical Standards Committees, including RosettaNet, have tried to improve this process by developing data dictionaries and transfer protocols. Recently I’ve partnered with semiconductor industry veteran Ron Jones ( n-Able Group CEO) on a white paper that looks at data integration in the fabless semiconductor industry. If you’d like to review our insights, this paper is now available by clicking here.