Transcript Document 7107689

The Introduction of Lean Manufacturing
Concepts at Qualcomm
Introduction: Agenda

The Value Chain

Lean Concepts

Benefits of Lean Manufacturing

2 Oracle Instances

The QCT instance

The Quantum instance

Why 2 instances?

Separation of Production and Non-Prod Procurement

2007 Implementation Sites
1
The Value Chain
The Quantum value chain is driven by Qualcomm’s leadership
position as the developer of CDMA technologies. QCT CDMA
technologies accounts for 90-95% of QSCO demand, principally
FFA’s and SURFS (test equipment used to test chip quality and
functionality). The remaining 5-10% of QSCO demand is
generated by QWBS (Qualcomm Wireless Business Solutions),
which manufactures OmniVision and other wireless products.
Value Chain Processes
Generate Demand
Develop-Introduce
Products /
Services
Market
Products /
Services
Fulfill Demand
Sell
Products /
Services
2
Procure
Materials /
Services
Plan /
Manufacture
Distribution /
Service
& Support
Lean Concepts: The 5S System
Japanese
Meaning
Translation
Seiri
Organization
Sort
Seiton
Orderliness
Set-in-Order
Seiso
Cleanliness
Shine
Seiketsu
Standardized Cleanup
Standardize
Shitsuke
Discipline
Sustain
3
Lean Concepts
FROM:
TO:
Predominately “Push”
“Pull” from the Partner
Inconsistent Inventory
Kanbans, Min/Max and Safety
Stock Demand Triggers
Disconnected Forecasts
Intelligent Forecasts
Inconsistent Signal to Partner
Defined Signal to CM Partner
Complex Processes
Radical Simplification
4
Benefits of Lean Manufacturing

Reduced inventory across the supply chain

Greater predictability around lead times and on-time shipments

Increased reliability  the right product at the right time at the right price

Better customer satisfaction due to greater accuracy in forecast delivery

Better data, robust processes and systems  management effectiveness

Increase control over quality, defects and root cause of defects (6Sigma)

Optimize operations between existing QSCO and “shelter” organization

Better manage throughput with new Contract Manufacturing partner

Position Qualcomm for rapid growth in emerging business and markets
5
2 Oracle instances: The QCT Instance

QCT instance has two application servers: 11.5.8 and 11.5.9 (lot controlled)

Quantum instance is an Oracle 11.5.10 instance, with min. customizations

Each organization “owns” its own inventory; common inventory items

QSCO (manufacturing) has no P&L, and will liquidate costs to other BU’s
QCT Instance
FAB Suppliers
Qualcomm
6
4B2 message from
SAT
3B2_C-O message to
SAT
3B2_C-I message
from FAB
PO for
DIE items
SAT Organizations
Service PO for
FG items
2 Oracle instances: The Quantum Instance
7
Why two instances?
The QCT instance is geared to Qualcomm’s chip manufacturing
business, is heavily customized, and uses “lot control” and other
features that are not attractive to the Qualcomm discrete
manufacturing businesses

The QCT instance uses two application servers, one Oracle 11.5.8
and the other, an Oracle 11.5.9 instance, primarily to support Oracle’s
Advanced Supply Chain Planning (ASCP) engine

The QCT instance does not include project accounting, nor does it
make allowance for international rollout

There is continuing discussion in the press about “spinning off” the
chip business

8
Separation of Prod & Non-Prod Procurement
Qualcomm USD Set of Books
Direct
and
NPI
Shelter
and
Bldg M
CORP (NonProduction
Procurement)
QSCO
(Production
Procurement)
Oracle Services
Procurement
MRP/ASCP
Completely automated
Procurement Process
iProcurement
Oracle Contracts
9
Indirect
and
Services
Corp
Procure
Quantum Implementation Sites
Russia (2)
Canada (1)
UK(5)
San Diego
SD1
QMT San Jose
Tijuana, Mexico
SD2
Mexico(6)
EU (DE, ES, FR,
IT, NE, SE) (6)
Korea(2)
Japan(2)
China(3)
Israel(1)
Taiwan (3)
QMT Taiwan
India(3)
Vietnam(1)
Singapore (1)
Indonesia (1)
Brazil (1)
South Africa (1)
Australia (2)
Argentina (1)
Actual sites, 2007 rollout
Potential sites, 2008 + global rollout
10
Lean Manufacturing: Agenda

Inventory Orgs Structure

ASCP Overview

Forecasts and Sales Order Drive Demand

Business Processes

SCO (Supply Chain Organization) Procurement

Shelter Manufacturing and CM Procurement

NPI Procurement

Quality and RTS Highlights

The concept of a “Virtual MRB”

Lean Manufacturing “to be” Model

Conclusion
11
Qualcomm Inventory Orgs Structure
Inventory Org Structure for US Entities
Last Updated: 12/12/2006
7:32 PM
QC US BUSINESS GROUP
QC US SET OF BOOKS
Snaptrack
Legal Entity
- Division 33 -
QUALCOMM
Legal Entity
- Division 01 PO: 100000000
PO: 200000000
QSCO OU
001-049
QSCO SD1
001
BLDG M
RCPT: 4000001
INVENTORY
N R
QWBS SAN DIEGO
050
BLDG M
RCPT: 1000001
INVENTORY
N R
STAGE
MRB
MRB
OFFSITE
RTS
WFR
OFFSITE
WIP
NL N
DROPSHIP
SOI
NL N
CUSTEVAL
SOI MRB
NL
HOLDS
R
REPAIR COS
ERROR
GSTAR DEV
FGSTOCK
N
STAGE
INACTIVE
NL N R
N R
QSCO MEX
BLDG MX M
002
RCPT: 1000001
INVENTORY
N R
MRB
OFFSITE
WFR
NL N
SOI MRB
NL N
NL
STAGE
NL N R
SOI
RTS
FGSTOCK
NL N R
R
N
RPR INV
NL
RPR STAGE
R
RPR IP
NL R
NL N
STAGE
NL N R
DEPOT INV
DEPOT WIP
NL N R
NL N
PROTO
NL N
NL
FGI-PSTK
NL R
N
N R
925-949
950-974
BU: 00257-QFT
QSERV
BLDG __
900
RCPT: 1000001
MUI
925
RCPT: 1000001
INVENTORY
N R
STAGE
R
WFR
RTS
WFR
191-199
RPR FG
R
RPR IP
RPR STAGE
NL R
RPR-INCMNG
WFR
R
RPR IP
NL R
WFR
STAGE
LEGEND
PO: 1XXXXXXXX
BLDG __
BU: 00001-CORP
NL
N
STAGE
SCCA5__Connect Wireless Solutions
R
RTS
SCGA1__Cetacea Sound of Atlanta
SCIL1__Illinois Auto Central Thermo King
SCIL2__Truck Centers, Inc.
SCIN1__Great Lakes Thermo King
R
SCIN2__Stoops Freightliner
SCFL1__Select Communications
SCKS1__Velociti, Inc. (Kansas City)
SCMI2__Wolverine Freightliner
SCOR1__Thermo King Northwest
SCMN1__Thermo King Sales & Service
SCPA1__Thermo King of Philadelphia
SCNC1__Carolina Engine
SCTN1__Cetecea Sound of Memphis
SCNE1__Thermo King Christensen
SCTX1__Thermo King of Dallas
SCOH1__P.J.'s - Fabricating, Inc.
SCUT1__Thermo King Intermountain
SCOK1__Central States Thermo King
SCVA1__Radio Communications of VA / MOBEX
001-049
= PO Sequence (9-10 digits:
100000001,
1100000001,
2100000001)
= Receipt Sequence (7 digits)
= Business Unit Number-Name
= Not Locator Controlled
= Nettable
= Reservable
= Default Backflush
Subinventory
= Inventory Org Codes
R
NL R
NL
= Item Validation Org
(Allows different buyer
per item per inv org)
= Item Master Org
(Houses all items
found within Oracle)
N R
12
NL N R
NL R
R
WFR
STAGE
QGTC
BLDG __
981
RCPT: 1000001
QCT Asia Pacific
Legal Entity
- Division 31 PO: 6100000000
QCTAP OU
BU: 00014 - QCTAP
QCTAP
BLDG __
986
RCPT: 1000001
QWBSS
Legal Entity
- Division 11 -
QWBSS OU
875-899
BU: 00152 - QWBSS
QWBSS
875
BLDG __
NL
OFFSITE
RTS
QGTC OU
986-990
R
QMT SJC
979
RCPT: 1000001
INVENTORY
N R
MRB
QC Global Trading
Legal Entity
- Division 25 -
981-985
QMT TWN REPAIR
978
RCPT: 2000001
RPR FG
NL R
RPR IP
NL
RPR STAGE
BLDG __
BU: 00060 - QGTC
WFR
200-224
QCINT
910
PO: 4100000000
OFFSITE
OFFSITE
RCPT: 1000001
SCCA4__Sacramento Valley Ford Trucks
MRB
R
MRB
R
QTL OU
QTL
200
N R
QMT TWN
977
RCPT: 1000001
INVENTORY
N R
BU: 00013 - TECH
SCCA2__Velociti, Inc. (Barstow)
NL
RTS
R
R
STAGE
RPR STAGE
NL N R
RTS
QMT
975
RCPT: 1000001
INVENTORY
N R
RPR IP
CORP REPAIR
276
RCPT: 2000001
RPR FG
RPR STAGE
910-924
QMT REPAIR
976
RCPT: 2000001
RPR FG
R
RTS
QWI OU
QCINT OU
BU: 00283 - QCINT
NL N R
MRB
QCT REPAIR
226
BLDG M
RCPT: 2000001
N R
OFFSITE
OFFSITE
PO: 800000000
NL
QC International
Legal Entity
- Division 04 -
975-980
MRB
OFFSITE
RTS
QMT OU
BU: 00247-QMT
QFT
950
RCPT: 1000001
INVENTORY
N R
MRB
CORP
275
RCPT: 1000001
INVENTORY
N R
STAGE
OFFSITE
BU: 00010 - QSERV
QC MEMS
Legal Entity
- Division 74 PO: 5100000000
QFT OU
BU: 00099-MUI
900-909
BU: 00001 - CORP
00017 - INVC
00018 - QPROJ
00092 - MFT
00008 - QPAG
00016 - QCCU
00167 - QCDT
00195 - QCSEC
00204 - QGBD
00106 - QCWK
PO: 3100000000
MUI OU
QSERV OU
N R
SCCT1__Freightliner of Southern Connecticut
REPAIR NPI
SOI
RTS
HOLD
QWI
BLDG __
191
RCPT: 1000001
NL R
SERVICE CENTERS
055
RCPT: 5000001
NL N R
MRB
QGST
BLDG __
183
RCPT: 1000001
NL R
SCCO1__Thermo King of Denver
NL N R
R
STAGE
QGST OU
MRB
NL R
REPAIR COS
PO: 700000000
RPR PSTK
INVENTORY
STAGE
N
QWBS REPAIR N.CAROLINA
054
BLDG CAR A
RCPT: 4000001
RPR IP
RPR FG
QCT
BLDG W
225
RCPT: 1000001
INVENTORY
N R
BU: 00011 - QWI
RPR IP
RPR INV
NL
RPR FG
RPR STAGE
QAPP
BLDG __
175
RCPT: 1000001
183-190
QGOV REPAIR
126
BLDG M
RCPT: 2000001
R
BU: 00003 - QCT
00009 - QCTST
BU: 00166 - QGST
QWS MEX
102
OFFSITE
INACTIVE
DROPSHIP
RPR IP
MRB
DEBUG
WFR
RPR FG
QSCO QCT
006
BLDG W
RCPT: 6000001
INVENTORY
N R
WFR
WIP
RTS
OFFSITE
QWS REPAIR
101
BLDG AK
RCPT: 2000001
R
RTS
OFFSITE
RESERVED
NL R
N
NL N R
MRB
R
RTS
QWBS REPAIR MEXICO
053
BLDG MX M
RCPT: 3000001
RPR COMP
RPR STAGE
STAGE
MRB
R
QWBS REPAIR SAN DIEGO
052
BLDG M
RCPT: 2000001
RPR FG
R
RPR STAGE
QGOV
125
BLDG M
RCPT: 1000001
INVENTORY
N R
NL N R
STAGE
RPR IP
GSTAR RSVD
WIP
QWS
100
BLDG AK
RCPT: 1000001
INVENTORY
N R
275-299
225-249
175-182
BU: 00004 - QAPP
BU: 00005-QGOV
PO: 2100000000
PO: 1100000000
CORP OU
QCT OU
QAPP OU
125-149
BU: 00007-QWS
PO: 900000000
PO: 500000000
PO: 600000000
QGOV OU
100-124
BU: 00002-OMNI
ITEM MASTER
000
PO: 400000000
QWS OU
050-099
BU: 00300-QSCO
RTS
PO: 300000000
QWBS OU
QC Flarion
Legal Entity
- Division 77 -
MediaFLO USA
Legal Entity
- Division 82 -
NL N R
QMT Cayman Islands
Legal Entity
- Division 76 -
QMTCI OU
850-875
BU: 00250 - QMTCI
QMTCI
850
BLDG __
ASCP Overview
• Demand driven by forecasts and Sales Orders (depending on OU)
• As Demand drops into the Planners Workbench, Planners route “make”
orders to MES (“Shop Floor Control”), material requirements are
identified, and PO’s are created and transmitted to Suppliers via EDI
(Harbinger)
• Entire production procurement process is automated, end-to-end
Generate Baseline Forecast
Generate Constrained
Long Term Supply Plan
Collaborative Demand
Planning
Generate Short Term
Manufacturing Plan
Generate Consensus
Forecast
Release Work Orders
to Contract Manufacturer
Capture Inventory
Visibility
Release Purchase Orders
to Component Vendor(s)
Collaborate with
Contract Manufacturer
Check Availability
& Capacity (ATP)
Oracle Modules:
ODP
ASCP
Collaborative
Planning
iSupplier
Portal
In addition, DBI may be used for KPI / Metric reporting
13
Order
Management
Forecasts Drive Demand into QSCO
Business Group
QC US BUSINESS GROUP
MFG END TO END PROCESS
QCT
QC US SET OF BOOKS
Set of Books
Legal Entity
QC LEGAL ENTITY
QSCO OU
QCT OU
001-049
225-249
re
Fo
ca
ITEM MASTER
000
Projects
Issue to Projects
st
Forecast/SO Demand
MFG SAN DIEGO – SDI
001
Manual MOs
QCT
225
Subassy
Dem
Sales Order
Shipments
Customer
MFG MEXICO
002
Subassembly
Supply
Demand
Manual MOs
Demand
Supply
Supplier
QCT
006
Manual MOs
Demand
Production POs
• Forecasts or SO’s created in QCT, MUI, QMT OU
• Demand is placed against QSCO OU, 3 inventory orgs
• PO’s are generated and sent via EDI to suppliers
Production material received from supplier
Production POs
14
Forecasts
entered via
spreadsheet
Releases
against
Blanket PO
(EDI 850)
Sales Orders
Drive
Demand
Forecast
(EDI 830)
Adjustments to
Plan made with
Arrow
15
Includes VMI,
SOI, “toll
manufacture”
Sales Orders
Drive Demand
Run ASCP
Engine
SIM versus
REGEN Run
PO’s using EDI
850
Forecast using
EDI 830
16
ICG Process:
Item is
“Planning
Enabled”
PO’s marked
with an “-NPI”
17
Oracle Configuration: Item Master (1 of 2)
Indicates an
“Active Item”
Create Supply
to Match
Demand
Defines period
for which
releases created
18
Oracle Configuration: ASCP Engine (2 of 2)
ASCP Plan is
not Constrained
Enforced
Demand Drives
the Planning
Engine
19
Quality and RTS Design Highlights
 Uses standard Oracle hooks from Procurement to Quality
 8 Quality Collection Plans developed for each “state” an NC’ed item may
take
 Handles RTS for both Production and Ancillary Items
 Covers all RTS scenarios:
 Credit
 Outside Rework
 SOI (Supplier Owned Inventory)
 Legacy Receipts
 Utilizes standard Quantum shipping process (custom, integration with RTS)
 Leverages standard Oracle WO/PO process to capture all relevant inventory
consumption, item conversions, labor charges and other variances
 Improves A/P debit memo process using the AP Open Invoices API for
automatic debit memo creation
20
QUALCOMM “Virtual” MRB Process
Rework: Manually
Create Work
Order for internal
rework items
Collection Plans
Material Receipt into MRB Inventory
Factory
Factory receives part, and after inspection (“reject”),
transfers NC part to MRB Inventory.
• RCV INSP
Work Order
NC Rework
NC part is retuned to
MRB Sub-inventory
MRB
Sub
Repair
Vendor
Inv Move
OSP
RTS
(Buyer)
NC part is sent to
outsourced repair
facility
RTS/RTV
Supplier
NC
Process
Start
( Credit/ SOI)
Disposition “Accept “Accept,
Sub (SQE) Use as Is”Use as Is”
Scrap
Part is not salvageable
and is scrapped.
Hold
Scrap
RTS Process: Create
OM Shipping Lines from
Receipt Lines.
Key
• Master Main
• Audit
• Detail
• Disp Master
• RoHS-WEES
• WFR Master
• RTS Master
• OSP Master
Automated
Manual
21
Quality Automated Processes (incl. RTS)
 Automatic Creation of Sales Orders
 Trigger on RTS disposition
 Utilize Item set up
 “Feed” Shipping documents
 Create Vendor address (site)
 Automatic E-mail Notification to next Person in Chain
 Reports
22
LEAN Process Flow “To Be” Model
On line Orders
Qualcomm
Supply Chain Partner
SLC
ERP
Order
Mgmt
Costing
Customer
Resp
Pack-out
Transit
Eng Change
Mgmt
MPS Planning
CdeC Site
Kanban/ROP
ROP Sizing
Transfer FGI to
Company
Health
Monitoring
Kanban/ROP
Kanban/ROP
CM Dist Site
#`1
CM
Kanban/ROP Pack-out
ERP
Component
Mgmt
MRP Planning
Contract
Manufacturer
CM Dist Site
#2
23
Bad Board/
Virtual MRB
Process
Conclusion