Bill Gilmour, left, director of strategy for IT at Freescale Semiconductor, managed the company’s comprehensive re-engineering effort; Bobby Ghoshal is Freescale’s IT manager of enterprise business intelligence (BI).
Freescale Semiconductor gains greater insight into its supply chain with an enterprise data warehouse.
When Freescale Semiconductor, a global leader in the design and manufacture of embedded semiconductors, spun off from Motorola, it sought to rebuild itself as an independent company from the ground up. Freescale knew that to outperform the competition it needed to transform the work force from task-based to knowledge workers. The chip maker left few stones unturned as it sought to gain real-time access to more of its data, deeper insight into the entire fulfillment process, greater quality control through master data management and end-to-end business analytics.
The first course of action was to create an enterprise data warehouse (EDW) solution to reduce the time and effort of reporting and metrics generation, and increase the visibility of information in a consistent and timely manner across Freescale. This was quickly followed by a program to re-engineer the product data management, supply chain planning, quality systems and global product-tracking solutions.
For 30-plus years, Freescale had in place systems that many of its competitors did not. These featured capabilities like complete global visibility and tracking across the entire internal and external manufacturing footprint, a single customer master, and a single supplier database. “The technology, however, was nearing the end of its life cycle,” says Freescale Director of Strategy for IT Bill Gilmour, the re-engineering effort’s program manager. “The old system relied on too many legacy applications and too few personnel who were familiar with the aging technology to maintain it.”
"It’s about leveraging technology and the information to allow organizations to add value to the output."
While the company and industry changed and evolved, much of the core structure and systems that were in place for so long started to hit their technological limits. Also at issue was a scattered approach to data collection and storage, driving the need for a single, trusted data source.
Establishing a foundation
Freescale’s re-engineering started in 2005 when it merged all of its enterprise and manufacturing data into a single EDW from Teradata. Before that, data was scattered across eight fabrication facilities and 30 test and support sites. “In a nutshell, we decided that all reports and analytics for corporate systems would be done out of the enterprise data warehouse, regardless of the product used, whether it’s SAP or Siebel or some internal Java application,” says Bobby Ghoshal, Freescale’s IT manager of enterprise business intelligence (BI).
Over time, the evolution to an active EDW environment has provided Freescale with the scalable infrastructure needed to support the large amounts of data necessary to fuel the complex analytics that enable a real-time enterprise service-oriented architecture (SOA). In the process, Ghoshal’s team has learned how to manage workloads, optimize transaction-based processing and overcome the challenges involved in integrating multi-step transactions across IBM’s DataStage and the EDW.
The active EDW enables users to request more types of information from more systems at more points along the way, and to receive significantly larger result sets much faster than ever before, says Fred Makins, Freescale’s IT manager for enterprise resource planning and supply chain.
Supply to Market builds upon the EDW
In February 2007, Gilmour and his team devised an aggressive program for re-engineering Freescale’s core systems. The program was broken into phases—Supply to Market and Order to Cash. The Supply to Market portion was completed in February 2009. It was an enormous undertaking that involved updating or replacing supply chain systems, including planning, core inventory tracking and costing, logistics, the product data management structure, and quality control. The Order to Cash phase focuses on external customer-facing systems.
One of the goals for Supply to Market included implementing new planning tools very early on with the objective to minimize the manual aspects of the planning function and institutionalize a rules-based approach that channels the effort into the resolution of exception conditions by knowledge workers. Freescale leveraged SAP APO for a fully integrated, capacity-constrained planning solution that provides flexibility in factory scheduling and supply chain modeling.
After achieving the first goal, the team moved on to another challenging area—implementing the Oracle Agile product as a new solution for product data management and integrating that solution with SAP, the EDW and additional downstream systems. “When someone makes a change to a product attribute, it is propagated across multiple systems,” Ghoshal notes. The system had to support the potential for thousands of engineers, all with real-time access, to simultaneously hit multiple supply chain applications and the EDW.
The final goal achieved was the replacement of the global product-tracking infrastructure. The team replaced the legacy inventory and finance systems with SAP. Again, this was a challenging effort that affected the logistics, manufacturing and finance organizations. The effort included integrating the factory manufacturing systems to SAP and ensuring that all of the factory transactions were properly recorded in SAP for inventory tracking and financial reporting. To facilitate this effort, a parallel project, called Lot Master, was initiated. The Lot Master solution utilizes the TIBCO message bus to send factory system transactions to SAP and the EDW. The Lot Master solution, developed by Freescale to provide detailed manufacturing product information, also enables greater visibility into product data and better tracking of product genealogy. And it supports improvements in defect analysis.
Management of change critical to program success
Change management was a very significant aspect of the initiative for us,” says Gilmour. Extensive time and effort was invested in validation and testing to ensure the conversion of some 30 million legacy data elements. Freescale went to great lengths to ensure validation of the product data management and global product tracking integration. The company leveraged the data feeds to the EDW to ensure data transacted properly through Agile, SAP and the factory manufacturing systems. Multiple iterations of validation and testing were performed to get as close to 100% accuracy as possible, thus minimizing cleanup post-implementation.
In addition to the extensive validation and testing, the team invested in communication and training of employees. This ensured that individuals were aware of the changes coming, understood the new business processes, and were capable of using the new systems and functionality.
Freescale is a global company that includes associates in many European and Asian countries—including Israel and Japan—as well as the United States. Individuals across these organizations engaged to assist in readiness preparations. The team leveraged Global Knowledge’s On Demand product suite to develop and deliver hundreds of hours of computer-based and classroom training sessions.
Driving home the importance of the change management effort were news reports that one of Freescale’s suppliers had faced a catastrophic business interruption earlier in the year during a similar project. “When we talked to the CEO at the time, the major topic of conversation was that we had to implement this in a clean and seamless way. In the end, we did,” Gilmour says. In fact, the re-engineering resulted in zero disruption.
"We are approaching the point where the system is in a position to drive the majority of our business."
Project pays off
The team focused its efforts on eliminating the complexity of working numbers into the system manually to enable a knowledge work force. “It’s about leveraging the technology and the information to allow organizations to add value to the output rather than spending their time pulling it together,” Gilmour says. “It’s the ability of the planning and engineering teams to understand the market context and respond quickly to it.”
Already, it’s paying off with:
- Increased agility. With real-time reporting of data consolidated across all of the business areas, Freescale leadership is able to make intelligent business decisions and respond to conditions rapidly.
- Broader access. Finance employees now have visibility into levels of detail and capacity that they never had before.
- Planning flexibility. The company can run multiple planning scenarios in a week, where it used to take weeks to run far fewer scenarios.
- Manufacturing improvements. Freescale has seen significant improvement in terms of measuring manufacturing process and progress.
- Competitive advantage. Based on his conversations with industry consultants, Gilmour says: “It appears that we are fairly advanced in the integration of planning and control systems. We were nervous about pushing the edge too much, and as it turns out, we were pleasantly surprised.”
The benefits realized so far are just the first step. “We are at a transition point,” Gilmour says, adding that the team continues to drive incremental improvements. Particularly exciting is the impact on Freescale’s planning community. In much the same way that helpdesk software assists employees, Gilmour wants to provide planners with “proactive decision support tools” to better manage their complex environment.
“We have made enormous strides in the ability to manage data and provide decision support to our teams. We can do a lot more, however, and our focus going forward has to be how to truly exploit the information we have,” says Gilmour.
Looking to the future, Gilmour sees even greater possibilities: “We are approaching the point where the system is in a position to drive the majority of our business.” Effective systems technology changes behavior. “We want to go beyond simply optimizing how we do things,” he says. “What is really exciting is when our people drive into areas we did not anticipate; continuous improvement never stops.”