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9/9/2008
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InformationWeek 500: IT Is At The Heart Of National Semiconductor's Business

Innovation in service-oriented architecture and collaboration lands the electronics company at the top of the InformationWeek 500.

You don't have to preach to Ulrich Seif about "aligning IT with the business." Seif is so close to National Semiconductor's core electronics parts business that he's responsible not only for IT, but also for supply chain efficiency and revenue attainment. His key managers--on an IT staff of 299, lean for a nearly $2 billion-a-year global company--spend part of each year living alongside line-of-business managers to see how they're using their IT systems, then proposing improvements. Seif's managers have a hand in National's new product planning, production planning, and distribution. And when Seif needs sign-off from top management, he doesn't make appointments or stage meetings; he snatches CEO Brian Halla as he passes by in the hallway for a "demo and approval."

When product planning meetings take place, Srikanth Santhanam, IT product line and technology development manager, sits in. "Whenever our organization gets together, you have the feel of the whole company," Seif says. "We run information services like it was its own business. You get the freedom to do that only if the guys running the business believe you will do the right job for them. ... We have to re-earn it every year."

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For National, producing 4 billion leading-edge components a year and delivering them to customers is just part of the battle. After getting a part off the drawing boards and into production, the company still has to win the hearts and minds of product design engineers in the outside world. They're the ones who decide whether to use National's component or a competitor's.

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Seif and Sheau-Huey Yuan, his chief architect, were talking to a VP at a major Asian distributor in 2007 when they asked why it sometimes took as long as two years for design engineers to order promising National parts in quantity. Seif learned that "design engineers want what they want right now." They want to build a prototype and be able to go straight into production, "knowing the latest parts they have designed in will be available in quantity," he says.

With 30,000 parts in the National catalog, independent distributors which account for half of National's sales--are crucial to this product marketing process. They don't stock all of National's parts because the ones that end up driving volume sales are a small fraction of the total. They're similarly reluctant to stock the new parts with unproven track records.

National's Inventory Goes Virtual -- National Semiconductor's System ONE is a service-oriented platform that interconnects design, manufacturing, and distribution systems. It serves as a nexus point that allows National's distributors to show parts in National's Virtual Inventory.

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