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A Healthy Dose of ChipsLaura L. DionneSenior Director of Global Planning (Retiring)Qorvo (TriQuint) Semiconductor

Pharmaceutical Innovation in Manufacturing Summit 2015London, UK

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A Language LessonChips

U.K.

U.S.

Today’sTopic

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Why Chips and Life Sciences?

Lesson to be learned from Semiconductors

Solving these problems at TriQuint

Agenda

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Demand Variability

Semiconductor & PharmaceuticalsCommonalities

Inverted BOM

Fin

ish

ed G

oo

ds

Pack

agin

gD

rug

Pro

du

ctB

ulk

/

Act

ive

Pro

d

Ingr

edie

nt

Finish

ed G

oo

ds

Packaging

Un

tested

Die

Wafer

(Silicon

, etc)

Long Cycle Times: R&D & Mfg)Pharm: 12 – 18 monthsSemi: 4 – 6 months

Expiration / ObsolescencePharm: 12 – 18 months (Patents, Generics, Shelf Life)Semi: 12 – 18 months (Phone, PC, Tablet)

Pharm: YearsSemi: Years

Pharm: Int’l Demand, Disti Models, Variations, PackagingSemi: Competitors, Consumer patterns, integration

Margin Pressure Increasing Cost PriceCompetition Loyalty Supplier Power Flexibility

Quality Market & Price

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So What Do “WE” Need To Do?

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A Healthy Dose of Chips

Data Is Key to all analysis and decisions• Clean

• Timely

• Integrated

Active and Proactive Inventory Management • Goals Driven by Data

• Manufacturing and Demand Variability

• Customer Needs-Sole Source, Customer Priority, Impact of SO

• Clean and Readily Accessible Actuals

• On Hand, Projected

• Units, Cost, Location

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Forecast Accuracy: Measure & Improve• Degree of Error (How much)

• Directional Bias (Under or Over)

• Impact of Error (Size of Revenue)

• Focus where impact is greatest

Collaborative Demand Planning• Semiconductors can see demand forecasting increase to > 70%

• Requires commitment, engagement and accountability from:

• R&D

• Sales

• Marketing

• Manufacturing

• Finance

A Healthy Dose of Chips….

One Plan to Rule Them All

Customer Impact

Expedites

Lost Revenue

Excess Inventory

Underutilized Capacity

Material Shortages

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Scenario / Range Planning • Directionally Correct vs. “Accurate”

• All future data is variable

• Focus on:• Potential & Risks• “What if” and Action Plans

• Variance for Demand, Supply &Interaction of both

• History contributes to potential variance

Scenario Planning to Determine Action Plans• Hope for the best…… Plan for everything else!

• Understand ramification and needed actions BEFORE they occur

A Healthy Dose of Chips….

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Continuous S&OP• Range Planning

• Scenario Planning

• Trade Off & Risk Analysis

• Decision Orchestration

– Across Organization & Geography

• Event Driven vs. Scheduled

– Assumption capture & evaluate

– Sensing of plan deviation

– Alerting (Monitor & Respond)

Know sooner, Act Faster

A Healthy Dose of Chips….

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MergerSupport

Demand ManagementForecast Accuracy

Collaborative Forecast

InventoryCapacity

S&OP Improvement10 day process

MergerSupport

RevenueMgnt

DashBoards

ScenarioPlanning

Reporting & Alerting

RapidResponseBy Kinaxis

Results:• Delivery Performance: 90% 97% Consistently since 2012

• Inventory Turns: 3.0 4.5 (without Strategic Inventory Builds)

• Capital Avoidance: > $20 annually (~ 20% total Capital Budget)

• Planning Headcount Avoidance: 25% improvement in Efficiency

• S&OP Speed (Sales Forecast Exec Decision): 6 weeks 10 calendar days

Scheduling Planning Analysis Managing the Business TriQuint’s Journey

Data Cleanup

H2’2010 2011 2012 2013 2014 2015

DeliveryPerformance

Analyze Current Methods

Too

ls

MergerSupport

What IF / ScenarioProactive Line Mgnt

AnalyticsLearning

Curve

AnalyticSkill set

Pro

cess

Peo

ple

New Metric Alignment

Center of Excellence“Global Planning

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Questions?

Thank You12© 2014 Qorvo, Inc. Confidential & Proprietary Information Protected by Confidentiality Agreement