Industry:
High Technology

Annual Revenue:
$500M-$1B

Employees:
2000-4999

"Oracle Advanced Planning has taken Intersil's business processes to the next level, allowing us to reduce the time and cost of our demand planning efforts, which ultimately makes us a better supplier to our customers." -- Don Cross, director of Operations Planning and Customer Service, Intersil Corporation

Managing Complexity, Ensuring Agility

Intersil Corporation designs and manufactures high performance analog and wireless networking solutions, offering products in the high growth segments of flat panel displays, optical storage (CD and DVD recordable), power management, and wireless networking. Like many semiconductor manufacturers, Intersil faced stiff global competition following a successful spin-off in 1999 and initial public offering in 2000. To strengthen its leadership position and ensure continued success, the company refocused its efforts, divesting non-core business and assets. The company also moved to a "mixed-mode manufacturing" model, making Intersil more reliant on outsourced manufacturing and creating a much larger supplier network.

Intersil recognized the need to improve its collaborative planning capabilities to accommodate the added complexities of globally outsourced manufacturing. A downturn in the semiconductor industry also demanded much faster response to changes in supply and demand. Using core products of Oracle Advanced Planning, Oracle Advanced Supply Chain Planning and Oracle Demand Planning, Intersil is making the transformation from a vertically integrated business model to a collaborative virtual supply chain.

Intersil assembled its Virtually Integrated Planning/Enterprise Resource (VIPER) team, which had the responsibility for designing and implementing the collaborative planning system. The team delivered the system in a year and under budget by proactively partnering with Oracle and maintaining strong links to the Oracle development team.

Why Oracle?

Intersil evaluated leading solutions with trials that included 13 complex planning scenarios and more than 600 planning parameters. Oracle exceeded all program requirements and provided the best results when benchmarked against the existing system.

Oracle's ease of use and integration, open architecture, scalability, and Windows 2000 support provided a platform that enabled true collaborative supply chain planning. "The ability Oracle gives us to collaborate with our supply chain partners was key," said Tim Muth, vice president of supply management at Intersil. "A less than optimal solution would not have enabled us to provide the customer responsiveness essential to our continued success."

Oracle's support of RosettaNet standards was also crucial to Intersil, since the company's long-term strategy is to use RosettaNet processes and standards for supplier collaboration.

Response Time Drops from 336 Hours to 24 Hours

Intersil replaced its legacy system with Oracle Advanced Supply Chain Planning, and realized strong improvements in a number of areas. Supply chain response time has been reduced from 336 hours to 24 hours. Data collection time has decreased from 10 hours to 20 minutes, and planning run time has dropped from 8.5 hours to 3 hours. Supply chain re-planning, the process of creating what-if scenarios, went from a labor-intensive weekly occurrence to a simplified, on demand process. Work in process and bill of materials accuracy has increased from 94% to 99.5%. Supply chain planning efficiency has improved by 15%.

Using its legacy system, Intersil was limited to a weekly planning cycle, but Oracle Advanced Supply Chain Planning allows on-demand planning. When suppliers are ready, Intersil will switch to daily planning and use on-demand planning when needed.

These many improvements have made Intersil much more responsive to fluctuations in supply and demand. Increased responsiveness better prepares the company for quick product innovation so that it can compete more effectively in emerging markets.

Intersil also benefits from being able to involve its sales and marketing teams to participate in demand planning. "Through Oracle Demand Planning, we are able to generate consensus demand forecasts," said Chris Henningsen, vice president of marketing for Intersil. The company is committed to making the process changes necessary to take full advantage of Oracle Demand Planning's capabilities.

$13 Million Benefit Expected Over Five Years

The VIPER team's focus on improving responsiveness and agility has already paid off, and Intersil expects to continue to see positive results. Intersil is on track to achieve its goal of doubling upside flexibility. In addition, the company conservatively estimates that it will see a $13 million benefit over five years. The vast majority of that benefit will come from a projected 30% reduction in inventory and the associated carrying costs. Part will come from an expected $1.1 million savings on IT support costs. Intersil's projected five-year return on investment is 246% and expects that its Oracle solution will allow the company to continue its aggressive growth of 20% over the next five years.