Can E-Commerce Give the Industry the Visibility it Needs?
Laura Peters -- Semiconductor International, 9/1/2003
E-commerce is not just about a storefront on the web and e-catalogs anymore. Today's web opportunities give engineers the technical information they need to design, manufacture and repair equipment, components and processes. The web enables virtual tradeshows and better control of the electronics supply chain.
These were some of the points made at Semiconductor International's annual breakfast panel discussion held in July. Panelists included a broad spectrum of industry players who discussed how to build better websites, the value of virtual tradeshows, good opportunities for e-procurement, and using the Internet to improve the efficiency of equipment repair in fabs.
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| Jerry Colella, MKS Instruments |
One of the primary initial
benefits of e-commerce is global purchasing power. "Gone are the days of putting
together multiple bid packages," explained Jerry Colella, vice president of
global business operations and quality management at MKS Instruments
(Andover, Mass.). He recently participated in a reverse auction where companies bid down to gain MKS's business. "I sat at my office in Rochester N.Y., my director was in California, the auctioneer was in Massachusetts, and companies from Taiwan, Singapore, Mexico, Hungary and the U.S. all bid for a multimillion-dollar contract." In this way, he said, MKS definitely got the best, real-time price for the materials it was purchasing, while drastically reducing indirect overhead expenses. "Given the tools today — the Internet, extranets, portals, supply chain management and reverse auctions — we can significantly drive down the cost of business to remain competitive."
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| Aydin Onur, Xceleris |
Aydin Onur of Xceleris (San Mateo, Calif.), a business/technology consulting firm, concurred with Colella. "E-procurement really helps you integrate your supplier base, so that you can better execute to your customers' requirements," he said. "In our industry, forecasts don't stay the same, lifecycles are short, and time to market is critical. And even though we focus on e-procurement and transaction efficiency, I would not buy an e-procurement program just for the efficiency it brings to the process."
He stressed that operational agility and integration with your supplier base are more important. Referring to the relationship between fabless firms and wafer, assembly and test houses, he said, "These are long-term relationships, in which you share meaningful data trustfully, and exchange last-minute changes. If both sides understand that the numbers are always estimates and there will be lots of corrections, you can establish a relationship that works." He highlighted IC/wafer shipping containers, chemicals, gases, filters and deionization systems as good opportunities for e-procurement.
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| Tom Gubanc, Swagelok |
E-commerce tools include
e-catalogs, e-newsletters and direct marketing programs. The next step is often
guided selling, simplifying the steps needed to select a product for a certain
application, complete with design tools, if needed. The Swagelok (Cleveland) website has CAD templates, 3-D design tools that customers can download and use in component assembly design, noted Tom Gubanc, Swagelok's director of e-business. "If you are designing an e-business architecture, add flexibility where you can because you will find that different customers will have different needs and no one standard will support all customers," he advised. Gubanc highly recommended multilingual sites. Customers can communicate through XML ports, online marketplaces, distributor e-stores and electronic data interchanges (EDIs).
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| Tim Morey, e21 |
Tim Morey of e21 Corp. (Fremont, Calif.) presented best practices for website effectiveness, including using it to educate, promote and manage the ownership of your company's property. "Start with search engine registration and optimization so that all your customers can find you," he said. His company recently facilitated several virtual trade shows in China and Taiwan due to the SARS epidemic. He gave examples of promotion-specific landing pages and mini-sites. Morey recommended direct content ownership for timeliness, accuracy and efficiency. He said that the best websites are wholly part of the company's operations and not just a shop front on the web.
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| Dick Thomas, Enigma |
Dick Thomas of Enigma (Burlington, Mass.) discussed his company's work with Tokyo Electron Ltd. (TEL) and other suppliers to improve the efficiency of equipment repair as a company's profits shift from equipment- to service-based. He compared the relatively young semiconductor industry (30 years old) with the aerospace industry (75 years old): "When GE sells a new aircraft engine, profit is 0%, but they lease the engine based on usage, and perform all repairs, with an 80% margin on parts, 100% on labor," he said. In fabs, service people can spend 40% of their time looking for information before starting work on the tools. Another 15-20% of their time is spent fixing problems caused by inaccurate or outdated information. "Improving access to the right information by 90% means we've facilitated much more efficient tool repair."
Colella also stressed the importance of visibility into the supply chain that is afforded by e-business. "You can see your utilization of inventory and resources. Now that you can see it, you can fix whatever problems might be there. You can't fix it when you can't see it."
