Varian Semiconductor Selects Kinaxis RapidResponse to Increase Response Management Capabilities within Highly Cyclical, Build-to-Order Environment

Varian Semiconductor Equipment Associates, Inc. (NASDAQ: VSEA), headquartered in Gloucester, MA designs, manufactures, and services semiconductor processing equipment used in the fabrication of integrated circuits. With 30 years of experience in the industry, Varian Semiconductor is dedicated to meeting the exacting demands of IC production and satisfying the ion implantation needs of IC manufacturers worldwide. With over 3,300 implanters installed throughout the world, Varian Semiconductor systems implant more than 5 million wafers each and every day—more than all of their competitors combined.

The Varian Semiconductor Challenge

Varian Semiconductor manufactures capital equipment for the semiconductor industry—a highly cyclical market that involves complex products that are subject to significant customized requirements and ongoing engineering updates. Add to that an inconsistency between long lead times required from suppliers for intricate parts, and short order lead times called for by customers due to inevitable delays in their capital expenditure decisions, and you have an organization, like many others, plagued with potential threats to operations performance and customer satisfaction. Varian Semiconductor required a Response Management solution that would help them not only satisfy customer demand in short order, but quickly and effectively respond to ever-present product and engineering changes, reduce excess & obsolete (E&O) inventory levels and avoid or address other potential performance impediments.

The Kinaxis Advantage

With a 4-month deployment, Kinaxis™ RapidResponse™ software started giving immediate payback within the Varian Semiconductor materials organization by providing the visibility and flexibility required to quickly respond to a constant stream of changes to build plans and effectively manage the resulting impact on operations.

In particular, with over 60,000 active part numbers (each individual Varian Semiconductor system alone having over 6,000 parts), managing inventory levels was a complicated and time-consuming process. A typical general "what-if" build-plan analysis could take days to complete. RapidResponse, integrated with their SAP ERP application, provides Varian Semiconductor with the ability to review the full impact of Engineering Change Orders (ECO) prior to implementation, appropriately schedule new product cut-in dates, and analyze high-level assembly outsourcing opportunities that can deplete current inventory. "What if" analysis of various additions and subtractions to original build plans can be done to see their impact on operations, determine and score the action alternatives and ultimately pursue the optimal option—one that best satisfies both customers' requirements and internal operations performance goals.

The Results Speak for Themselves

Varian Semiconductor is now managing E&O inventory levels as a result of ECO better than ever before. RapidResponse provides a multi-level review and automated what was a very time-consuming and complicated manual process leading to significantly better results.

"What-if" analysis of changes to build plans has been reduced from hours or days to just minutes. For example, identifying requirements and gating items when incremental demand is added used to take 27 hours of processing time in SAP (56 hours of elapsed time). Today, total elapsed time now takes less than 1 hour and processing time in RapidResponse is mere minutes. Using the Live Scorecard feature and a Varian Semiconductor-created workbook, RapidResponse provides quick results that can be easily e-mailed to key participants throughout the supply chain for a jumpstart on changes. Producing a Quarterly Receipts Forecast was reduced from 2 days to just minutes.

Also important, through RapidResponse, Varian Semiconductor has been able to automate many processes ensuring speed, accuracy and consistency across the organization. The RapidResponse Alert function has also been a great tool for automated report generation.

Overall, RapidResponse enables Varian Semiconductor to meet customer commitments without sacrificing quality or operational performance, which is paramount to its long-term business success.

About Kinaxis

Kinaxis™ helps manufacturers manage increasing business complexity and achieve operations performance breakthroughs with its proven solution for demand and supply chain planning, monitoring and response. Kinaxis RapidResponse is an on-demand service that enables collective risk tradeoff and response to change by empowering front-line decision makers with integrated tools for supply chain visibility, demand management, supply management, sales and operations planning (S&OP) and supply chain risk management. Global leaders such as Casio, Jabil, Qualcomm, and Raytheon are realizing superior customer satisfaction and a competitive advantage with RapidResponse. For more information, visit www.kinaxis.com or the Kinaxis blog at www.21stcenturysupplychain.com.

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