Total supply solution
Published: 16-Oct-2003
On-Site-Distribution, Full-Service-Provider, One-Stop-Shop: These expressions are becoming increasingly common in cleanroom technology. Infineon Technologies explain how Basan became their single source supplier
Can you have total supply from just a single source supplier? Why are these concepts advancing so rapidly? Do they really offer numerous advantages? Basan asked an organisation which should know: Infineon Technologies AG has now been working for around two years with the cleanroom company Basan as single source supplier and gives a first account of their experiences in GIT.
The impulse for the project occurred at one of the Sematech-Meetings in USA. The majority of the Sematech members gave positive reports of total supply concepts. They spoke of significant cost reductions and more efficient processes. It had finally become possible to concentrate on the core activity – production.
Back home at the Infineon headquarters in Munich, the idea rapidly developed its own momentum. It was immediately clear that, with the right concept, a genuine win-win relationship between producer and single supplier could be created' said Rijnder Mier of Infineon Technologies AG. 'Each of the two partners does what he does best – one produces, the other is responsible that all necessary materials are always available.
After initial considerations, those responsible at Infineon had already identified a whole range of organisational problems which could be resolved through the application of total supply
- No more legions of suppliers
- No more time-consuming panic measures to keep production flowing despite regular material shortages
- No more expensive emergency deliveries from the USA – not even when production plans need to be changed on an unplanned basis.
The reduction in the administrative workload also promised major improvements in the working processes. Before total supply was introduced, Infineon's cleanroom materials were stored in several locations without being co-ordinated. Many employees had access to the stock. Cost planning, and the precise allocation of costs between departments, was only possible with a major investment in time. After a thorough analysis of processes, Infineon Technologies AG decided to implement some internal reorganisations and to begin discussions with potential single source suppliers. There were good reasons for choosing Basan. On the one hand the company was already supplying half of the cleanroom consumables, and on the other hand they had recently and successfully implemented a total supply concept with Infineon Dresden.
The 'problem-free package' for Infineon München was then quickly defined. As total supply partner, the company would guarantee 100% availability of the defined materials and also take responsibility for the administrative and logistic functions.
- Local stocks (consignment stock with full administration)
- Scheduling of material and transport
- Daily analysis of usage
- Quality control
- Optimising of the product range (analysis of market trends, proposing lower cost articles of equal quality)
- Customised invoicing (e.g. consolidated invoices and processing of credit notes)
- Preparation of reports and statistics
- User education and product training
'A total supply concept is only really problem-free', according to Basan's Managing Director Jacobus C. Bartels, when the supplier of the logistic processes is supported by a modern logistics management system, and is thus able to offer detailed information concerning product usage and market changes'.
The quality of a total supply partner is also of importance at the many interfaces with manufacturers of cleanroom materials. What product information should be immediately passed to the customer? What product information should first be filtered and consolidated? For which products is it more efficient for the customer to continue to be supplied direct from the manufacturer?
Know-how, experience and a sincere commitment to partnership thinking are all necessary. For example in the case of Infineon and Basan, there was a joint decision to exclude wafer boxes from the total supply agreement.
The advantages of such customised concepts for the customer are clear:
- Enhanced security of supply
- Significant savings of personnel resources
- Cost reduction through combining the volumes purchased
The partnership provides maximum efficiency and profit for both partners when the single source supplier tailors the whole service to the needs of the customer.
At the initial discussions between the two companies in spring 2000, one factor was already clear to all. A true win/win relationship between single source supplier and manufacturer could only occur when the total supply concept was customised. To achieve every last advantage, the partners undertook almost a year of concentrated work before the implementation of the project started in March 2001.
Working in mixed teams consisting of delegates from both companies, the technical, logistical and commercial processes were defined so as to provide an optimal fit into the specific Infineon organisation. What criteria must be achieved in the consignment stock? What is the relative importance of certain articles of cleanroom material? Which are the critical levels of safety stock? These are just a few of the questions to be answered on the way to total supply.
The intensive pre-planning was not only valuable for the tangible aspects of the successful co-operation. During the planning phase, we experienced an additional factor of great importance. A true partnership had developed out of two companies which were previously entirely separate. The co-operation was a key element even when dealing with highly sensitive questions. For example: which materials should be excluded from the total supply because they are so interlocked into the manufacturing processes?
Two years after the concept started, both partners can be more than satisfied with the achievements. All of the important theoretical advantages were impressively confirmed. An increased reliability of supply, clear savings in personnel costs and a significant cost reduction were all achieved.
For example, by continuous analysis of material usage and optimised stock levels, the frequency of deliveries has been reduced to one per week. Urgent and expensive deliveries from the USA have long been consigned to history. Markedly fewer inventory locations and clearly defined and controlled access have simplified a precise inter-departmental cost analysis and enabled more efficient personnel allocation and improved planning of the daily workload.
Optimised input prices, achieved through consolidated purchase volumes and a major saving in time spent in contact with suppliers have earned a major 'plus' in the overview 'evaluation of total supply'. Basan relieved Infineon of all negotiations with suppliers. Market information is consolidated, filtered and provided.
'With the right partner, total supply really is a problem-free package for the customer. Infineon can now confirm this earlier prediction' says Bartels. The confirmation is based on factually quantifiable grounds and there is another, equally important reason. Since the project was introduced, employee satisfaction in the supply chain activities is much higher since each of the employees involved can now focus on their key tasks.
Contact Basan T: +49 6192 9986 13
ckloetz@basan.com
