LSI Logic: Customer Reference Video

A leading provider of silicon, systems, and software solutions for digital storage, LSI Logic needed to synchronize supply with demand. Find out how the company is using SAP SCM to optimize equipment, avoid bottlenecks, make real-time available-to-promise commitments, and reduce lead times by more than 25%.

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    • LSI Logic is an evolving semiconductor company, about 5,000 employees strong and about $1.9 billion. We're located in California, and we concentrate on two focused product lines, and that's the consumer and storage areas of the high-tech area. LSI Logic, back in 2002, saw a huge product shift in our portfolio. We went from a build-to-order company for the previous 10 years, and shifted to a build-to-forecast model. Our executives saw this coming. We went to SAP to look for a solution We were able to go live with the APO suite of tools in 2004. The suite of tools specifically are DP, Demand Planning, SNP, which is the Supply Network Planning module, and then ATP, which is our Available-to-Promise/Commit tool. Those three have allowed to us to reap benefits probably in two major areas. The first area is in the area of controlling our demand signals. Prior to having APO and DP specifically, our demand signals were coming in from all over the corporation. Now they're single-source, coming through a single flow of information. That has allowed us now to control the inventory in a much, much better situation. LSI has seen upwards of $10 million of inventory improvement just in controlling our business process. The ATP module allowed us to go from days to respond to an order to literally seconds to give a delivery commitment to our end customers. Not only did that provide us labor resource savings within LSI, but it provided a great service to our end customers, making it a much better business process flow for us all. And of course the overall, the SNP module took us out of the manual planning or build-to-order planning that we were trying to do at LSI Logic, and put us in a build-to-forecast model. So we plan our company on a weekly basis, and go out and execute during the week. Going forward, LSI Logic has big plans to continue our footprint on SAP. In the immediate future, we are converting some of our internal divisions off of Oracle and onto the SAP R/3 or enterprise ERP system. So LSI will truly be one giant footprint for SAP. After that, in 2007 we're hoping go onto the PLM, or product life-cycle management, and try and get the same controls in our product attributes and give LSI just that much more control. Further out, LSI has just become fabless, factoryless. So we're now encountering our first year of truly trying to control our supply chain using third-party or external contract manufacturers. So we have our eyes on ICH, or now really called SNC, supply network collaboration, and we're looking forward to a long and bright future with SAP.
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