Vivecon's software recommends the best amount of production capacity for wafers.
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Making semiconductors is a complex process. Pieces of silicon chips will fly across the ocean two or three times before they become finished products. "So we need sophisticated software to drive cost competitiveness in our market," says Sal Barlett, director of operations at ON Semiconductor's integrated power group.
Vivecon's Launch Manager is able to recommend the best possible amount of production capacity for wafers. It tracks production that's outsourced and keeps tabs on the supply chain. Ultimately, ON Semiconductor will use its monitoring capabilities to get an early warning of future capacity shortfalls, Barlett says. Currently the company looks at capital investments in capacity on a quarterly basis. But with the software in place, it's trying to monitor this more frequently so it can quickly pick up changes in ordering patterns.
In 2004, the $1.3 billion-a-year ON Semiconductor worked to cut capital costs by decreasing inventory levels and refinancing high-interest bonds. Vivecon's software is expected to further cut capital costs 9% to 15%, Barlett says.
Predictive analytics can do more than save money. Says Noha Tohamy, an analyst with Forrester Research: "Using predictive analytics to simulate possible events--such as a port shutdown or a supplier's failure to meet its contractual commitments--and understand their impact on supply chains is an essential tool."