Supply Chain Management of Texas Instruments

Texas Instruments Incorporated (TI) was established in 1930. It is a global semiconductor company that provides innovative DSP and analog technologies to meet the needs of customers for signal processing in the real world. In addition to semiconductors, the company's business also includes sensors and controllers, as well as educational products. Texas Instruments is headquartered in Dallas, Texas, and has manufacturing, R&D or sales organizations in more than 25 countries around the world. It employs more than 34,500 people worldwide. In 2003, Texas Instruments' sales revenue reached 9.83 billion US dollars.

Since the 1990s, due to the advancement of science and technology and the development of productivity, the economy has become increasingly market-oriented, liberalized, and globalized, making the competition among enterprises more and more fierce. Each enterprise has faced shortening delivery time, improving product quality, Pressure to reduce costs and improve services. As a manufacturing company with a history of more than 50 years and manufacturing and sales centers in major continents of the world, Texas Instruments how to coordinate the procurement, production and sales of factories all over the world so that they can be integrated under one structure , You can coordinate work in real time like all parts of the human body. This is the first problem to be solved.

According to Texas Instruments' survey and analysis, in the semiconductor industry, globalization is an inevitable trend to gain market competitiveness, increase market share, and obtain commercial returns. However, it is difficult to effectively manage the supply chain of manufacturing departments distributed in different countries, which makes managers face many problems while exploring the global market. At the same time, the semiconductor industry is characterized by complex manufacturing processes and long supply chains. The company is transforming from a product-driven business to a customer-defined business to adapt to social development, but the company’s existing supply chain system is no longer able to To support this transformation well, the supply chain system must be reformed so that the company can optimize its operations worldwide, so that the production department can improve the response time to customers, while shortening the time for products to reach customers and reducing Product production cycle and reduce inventory.

Through careful selection and analysis, Texas Instruments finally chose i2　TechnologiesInc. (hereinafter referred to as i2) as their partner, because the solutions provided by i2 are basically consistent with the goals that Texas Instruments wants to achieve. Texas Instruments uses i2 solutions to launch a new supply chain management plan to optimize global business, which includes

①Purchasing management: including support for multiple currencies, transportation cost management, multiple orders from multiple suppliers, calculation, supplier performance analysis and other functions.

②Transportation management: It includes functions such as transportation cost management, transportation route and delivery status tracking.

③ Warehouse/distribution center management: including computer-assisted product location search and allocation, product quality inspection, and product allocation/distribution between warehouses.

④Inventory control, support a variety of cost calculation methods; the quality management function can automatically classify ABC according to sales and profits, and support batch and shelf life management of goods.

⑤Direct delivery: refers to the process of ordering from the supplier according to the customer's requirements, and the supplier directly delivering the goods to the customer. A direct delivery order can include multiple products from different suppliers, and a direct delivery order can be divided into multiple delivery orders and multiple order statuses.

⑥ Demand analysis and forecasting and automatic replenishment: It can automatically generate distribution orders or purchase orders for products that are out of stock, and realize automatic replenishment of products.

⑦Financial system, including functional modules such as accounts receivable, accounts payable, general ledger, cash management and fixed asset management.

⑧Supplier relationship management, etc.

After the successful reform of the supply chain, Texas Instruments' wafer processing, group testing departments, and product distribution centers can coordinate their work, even if they are distributed in different regions, they can be like in a factory. This is the concept of a virtual factory that we often hear.

At the same time, it also shortens the product planning cycle and customer order delivery time. Now Texas Instruments uses a day-based system instead of their previous weekly-based system, and then turns to a continuous planning system, which enables the company to develop sales plans for all subsidiaries based on the understanding of the company’s global operations Plant start plan. And to make the fastest response to customer needs in some personalized markets. At the same time, due to shortening the production cycle and simplifying the production process, Texas Instruments has reduced costs. This is the biggest gain during the economic downturn, and it has found a "time" method.

The i2 solution has enabled Texas Instruments to reduce inventory and improve the accuracy of market forecasts. The company’s planners can now make production plans by analyzing data instead of revolving around data, and better Integrate the company's logistics and marketing departments. The i2 solution also enables Texas Instruments to have a comprehensive understanding of its global supply chain, and truly unify all production distribution under one management structure. The supply chain planning program adds restriction management to the company's planning process, enabling the company to discover problems and quickly take measures to solve them.

After adopting the new supply chain management system, Texas Instruments has further enhanced the international competitiveness of its products, increased market share, and thereby improved shareholders’ equity. "In my opinion, we can easily recover the investment of 24 million US dollars in the first year after implementing the i2 solution," said Shari Temple, the director of supply chain planning at Texas Instruments, in this comment on the i2 solution. According to relevant data, in 2002, Texas Instruments’ sales revenue was US$8.4 billion. By 2003, the company’s revenue had grown to US$9.83 billion, a growth rate of 17%. In 2003, the company had a revenue of 1.2 billion U.S. dollars, and a loss of 344 million U.S. dollars in fiscal 2002.