Confoe, Inc. Confidential Proprietary Confoe Inc. Outsourcing in Volatile Marketplaces: Lessons from the Semiconductor Industry March 21, 2006 Michael Fritsch, COO Tom Lipscomb, President www.confoe.com [email protected]877-253-9637 Speed-Flexibility-Execution Alignment to Alliances
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Confoe, Inc.Confidential Proprietary
Confoe Inc.
Outsourcing in Volatile Marketplaces:Lessons from the Semiconductor Industry
S4: Outsourcing in Volatile Marketplaces–Lessons Learned fromthe Semiconductor Industry
Start Time:3:15PMEnd Time:4:15PMDescription: The semiconductor industry is one of today’s most volatile
marketplaces. This has required great companies to learn how to meet thatvolatility with minimal disruption to their workforces and operations. Theyknow how to avoid the costs of overstaffing while avoiding the delays andcustomer dissatisfaction of understaffing.
You will learn how best to:• Rapidly shift resources to the right place at the right time• Ramp-up and Ramp-down of capabilities and resources with less disruption• Target the right skill level for the right job• Create the proper balance of fixed and variable costs
You will also learn the most successful workforce outsourcing techniques.These include:• Workforce Planning and Modeling• Outsourcing Strategies• Global Staffing Alignment• Loan Labor/Cross-Leveling Techniques• Effective use of Overtime and Utilization• Targeted Training and CertificationThese techniques brought a 2x-3x improvement in workforce flexibility for onefortune 500 semiconductor company.
Confoe, Inc.Confidential Proprietary
Storm Warnings
“Massive layoffs are usually associated withdecaying sectors like Detroit or perenniallytroubled industries like airlines. But some of thebigger job cuts these days are coming from thehigh tech world of pharmaceuticals. Drugcompanies have announced 70,000 job cuts inthe last three years-17% of the workforce andmore than the entire previous decade.”
“Storm Warnings” Forbes Magazine March 13, 2006
Confoe, Inc.Confidential Proprietary
Agenda
Introduction: Volatility in theSemiconductor Industry
Deciding What to Outsource-Core versus Context
7 Steps for Outsourcing aTechnical Workforce
Discussion/Questions
Confoe, Inc.Confidential Proprietary
Semiconductor Volatility
Semi volatility requires rapid capacity changes Semi Tool/Capital Equipment Manufacturers (CEM) faced the largest
challenges Outsourcing became a vital tool
– Foundry Model– Technical Workforce Outsourcing
CEM and Semiconductor Sales
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Confoe, Inc.Confidential Proprietary
Core Competencies - Definition
Based on work by Prahalad and Hamel
Are:• Multiple Integrated, Interrelated Skills• Enables Access to Wide Variety of Markets• Differentiators that are Difficult to Imitate• Contribute to End Product Benefits
Are Not:• R&D Investment Levels• Vertical Integration• Cost Distribution/Sharing
Confoe, Inc.Confidential Proprietary
Semi Technical Workforce
Chip Equipment (CEM)Technical Workforce
Major CostComponent
Critical path forcapacity
Core AND contextSignificant portion of
total workforce
Confoe, Inc.Confidential Proprietary
7 Steps for Outsourcing a Technical Workforce
1. Develop your overallworkforce and staffingstrategy
2. Analyze the elements andnature of the work
3. Build the workforce model4. Build the outsourcing model5. Identify and qualify
outsourcingproviders/partners
6. Execute your workforcestrategy
7. Monitor results and makecorrections
Confoe, Inc.Confidential Proprietary
Step 1: Workforce/Staffing Strategy
Overall BusinessStrategy
Goals of theenterprise
Current EnvironmentCurrent ResultsDesired ResultsOutsourcing “one part
Fab Owners (UMCi) Reduced trade labor hours for hook-up construction 15% Reduced time in daily planning meetings 60% Time to status fab daily 15 minutes UMCi Management administrative time reduction 20%
Confoe, Inc.Confidential Proprietary
OEM Productivity• Synchronization of core order
fulfillment process & supportprocesses
• Transaction management atthe Work Management Unit,WMU level
We establish the structure and protocols required to “bridge the construction to production gap”
Customer Site• Confoe professional project
delivery as owner’s agent• OEM installs tools as individual
projects• Turnkey hook-up construction
capability
Company A
Company BCompany C Company D
Company E
Confoe Management ServicesAlignment to Alliances
Confoe, Inc.Confidential Proprietary
OpsSync productsare tailored for easeof implementation,and the benefits arecumulative
1. The OpsSyncSM Product Family for OEMs
Immediate productivity gainsProfessional client reportsEfficient transitions between shifts
Improved resource utilization acrossclient sitesOptimum use of deployment teams
2. FirstInWorldSM New Product Introduction for OEMsA vertical slice of the OpsSync capability focused on a new product.Designed to flatten the learning curve fab to fab
3. RapidRampSM for the Factory OwnerReduces the time and cost to ramp factories.
Confoe Service Products
Confoe, Inc.Confidential Proprietary
R – Required B – Beneficial O - Optional
OpsLogFab
FocusClientFocus
GeoSync
GlobalSync
Assessment/Benchmark OpsAssess R R R R R R R R
New Product Introduction OpsNPI R O O O O
COF/Biz Process Mapping OpsAlign R R O O R R R
Governance/Change Mgt OpsChange R B B R R O R
Performance MgtIncentives/Metrics
OpsPerform R B B R R R R
Training , Crt, andDocumentation
OpsTrain B B O R R B
Workforce Planning &Staffing Strategy
OpsFlex O R R O B
Enterprise ApplicationsArchitechture
AppsArch B B B B R R R R
Application SelectionCriteria and Assessemnt AppsSelect B B B B R R B