Transcript Document
Supply Chain Risk Assessments
Advances in quantitative methods
Four levels of supply chain risk management
1.
Anecdotal, un-calibrated opinion 2.
3.
Read the papers, ask around, develop an opinion Objective data informed opinion Independent tracking of critical supply chain metrics, develop a more informed opinion or an informal model Objective data, objective projections 4.
Independent tracking of critical supply chain metrics that enable a projection of supply/demand balance with confidence levels Quantification of risk Risk quantified scenario planning Multiple scenarios analyzed Opinion Objective Supply Chain Projections Opinion Objective w/ confidence level 1 2 3 Supply Chain Scenarios Opinion Objective w/ confidence level 3.5
4
Presentation Title – 2
Copyright 2000-2005 | iSuppli Corporation | All Worldwide Rights Reserved | Confidential – Patents Pending
Critical supply chain metrics
Multi-sourced or substitutable products Inventory Capacity Demand profiles and elasticity Price – as the reflection of where supply = demand Proprietary sole sourced products Process Cpk (manufacturing and supply chain processes) Available supplier capacities and inventories Other demand for the capacity and end product demand for hardware that consume products that use the capacity
Presentation Title – 3
Copyright 2000-2005 | iSuppli Corporation | All Worldwide Rights Reserved | Confidential – Patents Pending
Semiconductor supply chain – 2005
The semiconductor supply chain is highly inter-connected $41,769
$42,432
$47,572
EMS
$47,572
$42,774
OEMs Top 10 $75,253 Semiconductor Suppliers $241,055 All Semiconductor Flow Values are at Supplier Point-of-Purchase and Do Not Include Intermediate Mark-Ups Presentation Title – 4 $50,222 $36,678 Distributor $45,060 $24,894
$55,802
OEMs 11 To 100 $89,338
$69,323
OEMs > 100 $76,464
$25,584
ODM $25,584
Copyright 2000-2005 | iSuppli Corporation | All Worldwide Rights Reserved | Confidential – Patents Pending
45 40 20 15 10 35 30 25 5 0
Presentation Title – 5 Days of Inventory for Communication Chip Companies
Copyright 2000-2005 | iSuppli Corporation | All Worldwide Rights Reserved | Confidential – Patents Pending
Total Inventory Levels Relative to Targets
15 10 5
Retail
0
Computer Storage Wireless OEMs WSP Networking Systems Automotive EMS
-5 -10
ODM Distribution Semiconductor
-15 -20 -25 Q205 Q305 Q405 Q106 Q206
*COGS, except Semi Companies and Semi Foundry, which are calculated on a Cost of Revenue basis
Presentation Title – 6
Copyright 2000-2005 | iSuppli Corporation | All Worldwide Rights Reserved | Confidential – Patents Pending
210 180 150 120 90 60 30 0
Memory Semiconductor Factory Capacity and Utilization
100 90 80 70 60 50
Presentation Title – 7
Capacity million Sq. In/ mo.
Memory Utilization Copyright 2000-2005 | iSuppli Corporation | All Worldwide Rights Reserved | Confidential – Patents Pending
Mobile PC Value Chain Entering Q2 2006, DOI Trends Over Supply Under Supply HDD CPUs Mobile Chipsets DRAM Display Distributors ODM OEM Substrates remain tight Inventories healthy, but some gains in the quarter Supply leveling off Inventories declining Supply coming down; tight supply expected exiting the quarter Overall, inventories remain lean Stocks leveling off from gains/corrections in H1 2006 Presentation Title – 8
Copyright 2000-2005 | iSuppli Corporation | All Worldwide Rights Reserved | Confidential – Patents Pending
Component Health Watch
Price and lead time trending for 12 different commodity groups Presentation Title – 9
Copyright 2000-2005 | iSuppli Corporation | All Worldwide Rights Reserved | Confidential – Patents Pending
Component Health Watch
Presentation Title – 10
Copyright 2000-2005 | iSuppli Corporation | All Worldwide Rights Reserved | Confidential – Patents Pending
CPT (Component Price Tracking)
Price is adjusting factor to equalize supply and demand
So tracking and projecting REAL prices is the single most important factor in assessing supply chain risk
Rolling Four-Quarter Forecast (Contract only) Presentation Title – 11 Client can compare their survey points to CPT graphs Graph a Single Price Type or Region or Combine the Graph Views
Copyright 2000-2005 | iSuppli Corporation | All Worldwide Rights Reserved | Confidential – Patents Pending
Predicting next month’s DRAM market
iSuppli has now constructed an “iSuppli Index” that uses our weekly pricing, inventory, mix, and capacity utilization data sets to accurately predict market dynamics month ahead (2 months ahead of release of WSTS) with very high confidence A key step to giving quantitative market and supply chain risk measurements Predicted vs. Actual Sales Time Series Model with Regressor (iSuppli Index) 15.4
15 actual forecast 95.0% limits 14.6
14.2
13.8
13.4
13 1/02 1/03 1/04 1/05 1/06
iSuppli Index
Coefficient t-statistic p-value
0.589214 7.86084 0.000000
1/07
Presentation Title – 12
Copyright 2000-2005 | iSuppli Corporation | All Worldwide Rights Reserved | Confidential – Patents Pending