JDA Software Highlights Strategies for Semiconductor Demand Planning During the Economic Recovery
August 09 2010 - 2:00PM
Business Wire
Semiconductor manufacturers are in a quandary as the economy
recovers and customer demand changes. The recession fueled an
intense round of cost cutting and capacity reduction. Despite
today’s increasing upturn in demand, many semiconductor companies
are still uncertain if or how they should make new investments in
labor and production in order to meet market demand. As a result,
they are facing a growing list of supply chain challenges such as
product supply shortage, longer lead time and delayed deliveries to
customers.
“With order backlog and book-to-bill ratios beginning to show
signs of stability and growth, many semiconductor companies are
rapidly shifting gears, trying to capitalize on the global economic
recovery,” said Puneet Saxena, senior director,
industry strategies, JDA Software. “But meeting panic
demand in the aftermath of aggressive supply-side adjustments is
much easier said than done.”
JDA offers the following recommendations to help semiconductor
manufacturers address supply shortages and capture growth
opportunities:
- Create forecast confidence
bands to attend to higher priority forecasts first. To
proactively plan for demand surges, semiconductor companies should
adjust to operating in a capacity-allocation mode by segregating
forecasts into a range of high- and low-confidence forecasts.
Instead of trying to produce based on forecasts for all customers,
they need to focus on high-confidence forecasts first, and then
address the lower confidence forecasts as capacity becomes
available. The end result will be an ability to provide supply
across a wider set of customers.
- Establish business rules to
prioritize enterprise-wide demand for different customers and
products. Once forecasts are segregated into high and low
confidence bands, the question turns to which high-confidence
forecasts should be prioritized first. Difficult as it may be,
semiconductor manufacturers must learn to be strategic about their
customers and separate the more critical orders from the lesser
ones. Establishing rules to prioritize demands in order to attend
to the more significant customers and larger orders, semiconductor
manufacturers will better serve all customers.
- Implement rapid sales and
operations planning (S&OP). When dealing with supply
shortages and low demand visibility, semiconductor companies must
recognize the need for cross-functional synchronization to keep the
entire organization in tune with the most current view of demand.
Many semiconductor companies are investing increased resources in
creating a stronger S&OP process to better synchronize
allocations. An important aspect of this improved process is that
the planning is conducted on a much more frequent basis. While it
may have been conducted once a quarter in the past, companies are
now leveraging monthly and even weekly planning to gain the most
accurate picture of demand across their main business
functions.
With a growing customer roster of world-class semiconductor
companies including Fairchild Semiconductor, ON Semiconductor,
Marvell Semiconductor, Silicon Image and Texas Instruments, JDA
continues to build on the rich heritage of supply chain management
success established by i2 Technologies in the discrete
manufacturing sector. These customers are part of a premier group
of companies in the semiconductor industry that are improving
end-to-end processes, enhancing supply chain responsiveness and
improving operational efficiencies with the help of JDA
Software.
To learn more about how JDA helps manufacturers in the
semiconductor industry improve demand planning, advance S&OP
and synchronize global supply with changing customer demand, please
visit www.jda.com.
About JDA Software Group, Inc.
JDA® Software Group, Inc. (NASDAQ: JDAS), The Supply Chain
Company®, is a leading global provider of innovative supply chain
management, merchandising and pricing excellence solutions. JDA
empowers more than 6,000 companies of all sizes to make optimal
decisions that improve profitability and achieve real results in
the discrete and process manufacturing, wholesale distribution,
transportation, retail and services industries. With an integrated
solutions offering that spans the entire supply chain from
materials to the consumer, JDA leverages the powerful heritage and
knowledge capital of acquired market leaders including i2
Technologies®, Manugistics®, E3®, Intactix® and Arthur®. JDA’s
multiple service options provide customers with flexible
configurations, rapid time-to-value, lower total cost of ownership
and 24/7 functional and technical support and expertise. To learn
more about JDA Software, please visit www.jda.com, e-mail
info@jda.com or follow JDASoftware on Twitter.
This press release contains forward-looking statements that are
made in reliance upon the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. Forward-looking
statements are generally accompanied by words such as “can,”
“will,” “ensure,” “help,” “enable” and “expect” and other words
with forward-looking connotations. In this press release, such
forward-looking statements include, without limitation, comments
that certain strategies may help semiconductor manufacturers better
serve customers. The occurrence of future events may involve a
number of risks and uncertainties, including, but not limited to:
(a) the strategies may not lead to desired results; (b) there may
be implementation and integration problems associated with the
strategies; and (c) other risks detailed from time to time in the
“Risk Factors” section of our filings with the Securities and
Exchange Commission.
“JDA” and “i2” are trademarks or registered trademarks of JDA
Software Group, Inc. Any trade, product or service name referenced
in this document using the name “JDA” is a trademark and/or
property of JDA Software Group, Inc.
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