CASE STUDY

Infinite Possibilities
Infineon Technologies Takes Planning to the Next Level With JDA S&OP

Infineon Technologies
Fast Facts
Industry
Manufacturing High Tech
Headquarters
Neubiberg, Germany
Description
Infineon Technologies AG offers semiconductor
and system solutions addressing three central
challenges to modern society: energy efficiency,
mobility and security. In the 2012 fiscal year,
Infineon reported sales of 3.9 billion. The
company employs more than 26,000 employees
at its 12 production facilities and more than 20
R&D locations worldwide. Known for its innovative
technologies, Infineon has more than 17,000
patents and patent applications.

Objective
Create a single integrated, multidimensional sales and operations planning
process that promotes global collaboration and enables the company to
quickly respond to market changes.

Solutions
JDA Sales & Operations Planning
JDA Factory Planner
JDA Order Promiser
JDA Supply Chain Planner

JDA understands our business

quite well. They also understand
the specifics of the semiconductor
industry well, and that gave us a good
basis to work from.
Wolfgang Keichel,
Vice President, IT Supply Chain Management,
Infineon Technologies

Services
JDA Cloud Launch
JDA Consulting Services
JDA Support Services

Real Results
Reduced planning effort by 30 percent
Cut forecasting lead time from four weeks to two weeks
Decreased planning errors up to 90 percent
Reduced forecast adjustments by a factor of 10
Increased overall forecast accuracy

Infineon Technologies AG operates in an

industry known for its demand volatility,
long product lead times and high capital
investments. It provides semiconductor
and system solutions, focusing on three
central needs of modern society energy
efficiency, mobility and security to
diverse customers worldwide, including
auto manufacturers, industrial electronics
companies, chip card and security
businesses, and information and
communications technology leaders.
The companys ability to sense and
respond to demand changes, while
balancing global production capacity
across its more than 20 facilities, can be
challenging. Operating under these
difficult conditions, you have to be
prepared for market volatility, said
Andreas Mtzler, senior director of supply
chain engineering, corporate supply
chain, Infineon. Todays perfect product
will be out of the market tomorrow. You
have to react fast.
All semiconductor companies are facing
increased product and supply network
complexity, while contending with more
variable customer demand. We learned a
lot from the economic crisis in 2009 and
the fast recovery in 2010, and we were
able to manage the cycle well
operationally, said Mtzler. But it was a
wake-up call for our planning
performance. Our planning process was
too complex, too slow and the businessrelated figures such as turnover and the
operational topics such as utilization were
hard to align.
The company set out to re-engineer its
end-to-end planning processes and tools
to ensure that it could respond more
quickly to market changes across all
planning levels and areas of the company.
In order to achieve this objective, Infineon
realized that it needed new technology to
align its flexible planning processes with
its actual demand and required capacities.
It was a two-year journey that was jointly
managed by the IT and business
departments.
The sales and operations planning tools
we were using at that time were
homegrown, and the combination of
homegrown tools with a growing business
did not work because of limitations in
scalability and integration capabilities,
explained Wolfgang Keichel, vice

president, IT supply chain management,

Infineon. We chose JDA Software as our
partner for this project based on a long
history of working together in the
planning area. JDA understands our
business quite well. They also understand
the specifics of the semiconductor
industry well, and that gave us a good
basis to work from.
A long-time JDA customer, Infineon
previously utilized JDA solutions to
improve the efficiency of its supply chain
operations. In 2011, Infineon tested sales
and operations planning (S&OP) solutions
from a number of different vendors, and
selected JDA S&OP in order to create an
integrated solution suite that could
provide both a reliable demand forecast
and realistic production plans. Out of all of
the solutions Infineon evaluated, JDA
S&OP was the only solution that fulfilled
the functional requirements of volume
planning and production maturity.

A Carefully Planned, Strategic

Implementation
To ensure a rapid, results-driven
installation and rollout of JDA S&OP,
Infineon turned to JDA Consulting
Services. We relied on JDA Services quite
heavily. The consultants started with a

deep dive, where they tried to understand

our processes first, and then tried to match
them to the JDA solution capabilities, said
Mtzler. For such complex situations, I
think this is a good way to start
understanding our processes before you
discuss what is the right tool, what is the
right feature. The consultants know the
JDA tools quite well; they gave us a lot of
input on what would work.
In partnership with Infineon, JDA
developed an interactive rough-cut
capacity planning functionality within JDA
S&OP, which enables Infineon to easily
synchronize demand, supply, capacity and
load planning into one multidimensional
cube. Data such as sales forecasts,
pricing and production capacity can
now be reviewed and changed in real time
in one single simulation model, ensuring
that Infineon has a reliable overview of its
operational and financial plans, and can
react promptly to changes in the market.
Leveraging these capabilities, Infineon can
shape the demand picture to meet
production constraints or trigger
additional capacity for instance, at a
subcontractor site when needed.
This implementation represented the first
time in Infineons history that various
departments and regions were
collaborating in a single S&OP process and
using one tool around the globe. Various

customers a fragmented view of planning.

We now have the possibility to combine
all the different views of planning, Mtzler
said. Because JDA S&OP is integrated with
our other JDA software, its a combined
solution that serves the long-term forecast
with short-term production programs.
Demand, supply, capacity and load are
always synchronized and calculated
together.

An Improved Competitive Stance

legacy tools were decommissioned,
simplifying processes and enabling the
company to make better decisions and
move at a faster pace than ever before.
Prior to moving the application inside the
Infineon firewall, the company leveraged
JDAs Cloud Launch as a testing
environment for a few months. According
to Keichel, the testing environment
helped the teams speed up
implementation, secure quality and
solution configuration settings, as well as
to proof out scalability on the real-life
Infineon data model.
The straightforward, familiar interface of
JDA S&OP made it easy for Infineons
planners to begin using all of the features
on the tool leading to a fast
implementation. We got very positive
feedback on the user interface, he said.
The combination of a professional
planning tool with an interface that is
similar to Excel is a combination that
works well.

Multidimensional Solutions,
Multidimensional Results
Since completing the worldwide rollout of
JDA S&OP, Infineon has achieved a broad

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range of results across every dimension of

its business. The company has reduced its
planning effort by more than 30 percent,
and is able to cut the lead time for its
volume rolling forecast from four weeks to
two weeks. Planning errors have
decreased up to 90 percent and Infineon
has reduced its churn what the
company refers to as making minor
adjustments to the plan by a factor of
10. Forecast accuracy has also improved.
The most important result of the JDA
S&OP implementation is Infineons new
collaborative planning approach, which
enables the business to be much more
agile and responsive. Our new solution is
a kind of revolution for Infineon because,
with JDA S&OP, we link a lot of single
processes into one tool, said Mtzler.
Now we can combine our demand
planning activities with capacity
calculations and the capacity confirmation
and at the end we have a constrained
plan.
Mtzler emphasized the dramatic
improvement he has witnessed in the
robustness of Infineons planning
processes since the company added JDA
S&OP to its existing solutions. When we
compare the time before using the JDA
S&OP solution, we offered our internal

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While the global semiconductor industry

will always be a challenging and
unpredictable environment in which to
operate, Mtzler stresses that Infineons
JDA solutions have helped the business
manage its everyday challenges much
more effectively.
We will always face the combination of a
volatile market, long lead times and high
capital investments, noted Mtzler. JDA
S&OP helps us see how we can best fulfill
every customer need, while also making
the best use of our investments.

About JDA Software Group, Inc.

JDA Software Group, Inc., The Supply
Chain Company, offers the broadest
portfolio of supply chain, retail
merchandising, store operations and
all-channel commerce solutions to help
companies manage the flow of goods
from raw materials to finished products
and into the hands of consumers. JDAs
deep industry expertise and innovative
cloud platform help companies optimize
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levels. As a result, JDA solutions have
become the standard for the worlds
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07.19.13