Growth Forces Chipmaker to Digitize Along With Customers - 'ZIFFPAGE TITLEEfficiency Expert '
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Efficiency Expert
One clear aspect of the strategy to grow the company without a commensurate increase in headcount was Silicon Laboratories' decision, in 2003, to implement a business-to-business program using RosettaNet and electronic data interchange linking the company with its customers, distributors and suppliers.
"We made a decision that we couldn't grow at a manual pace," says Manathkar. And they aren't: The company already processes 9 percent of its routine business transactions—some 10 percent of revenues—using the B2B program, with a goal of 50 percent by the end of 2005, and 80 percent over the next four years. The cost: a relatively minor $300,000 in software, hardware, and man-hours.
Silicon Laboratories also realized that the larger it gets, the larger the potential effects of any mistakes in long-range planning. As a result, the company decided to move from a product-forecasting and scheduling process that involved multiple disparate Excel spreadsheets into a more sophisticated advance-planning system from Adexa Inc., a provider of enterprise business planning software. The goal: to track demand fluctuations in the market, thereby improving the company's responsiveness and reducing manufacturing and supply-chain costs.
The development of the system—which also plays a part in the company's goal of fulfilling 80 percent of orders with what it calls "hands-free processing"—took place in 2003 and 2004 but continues evolving to this day.
"It addresses both day-to-day decisions as well as capacity and order commitments over the next six-to-nine months," says Manathkar. "We've consolidated forecasts, inventory, capacity, materials and work-in-progress information into one system."
Manathkar says the company will use both its B2B initiatives and the planning and scheduling program to go after the 100 or so processes it has identified as candidates for automation, from order entry to shipping to forecasting and supply-chain management. If their success so far is any indication, those 100 processes should start looking for a new company in which they can slow things down.
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