Semiconductor company sees exponential growth from new configure-to-order business model
Our client is an industry leader in data memory and storage solutions employing 115K+ people in 40+ countries and with annual revenue in excess of $75 billion.
Successful business model hindered by limited scalability
At the time of engagement, the client had recently expanded into integrated solutions by building custom server and data center solutions based on their high-performance component products. The new business unit launched and managed each quote as a unique configuration with the same discrete SKU-based processes and systems they had perfected over decades. The business model was immensely successful with customers but ultimately proved to have limited scalability. Business operations began to suffer as a result. As the product offerings grew exponentially, order lead times became 3-4x longer than industry standard.
Variant configuration and agile methodology makes new business model scalable
UST enabled and implemented a SAP variant configuration (VC) solution paired with a portal where customers could create and manage their orders. In the portal, customers could now create valid, vetted configurations, submit for quote, see the price once quote was confirmed, and either accept (to generate a sales order), or reject with reason codes. This provided valuable insight back to the client’s marketing and operations groups.
In addition, new master data configurations and a super bill of materials were designed to house the new business unit’s multiple customer purchase options as a baseline. VC rules were created to support technical compatibility of complex components. Agile principles and methodologies were introduced to deliver incremental value with each monthly sprint as UST led the team through a phased deployment approach. The ability to rapidly prototype configurations allowed UST to help the team focus more on the new processes and the organizational structures required to succeed in this new business model.
Customized portal solution to serve as the foundation for order management processes
The client experienced an accelerated time-to-value benefit because UST was able to deliver a complex solution in an expedited implementation timeline. After only ten months of use, the client had 1000 customers active on their new portal generating more than $2B in quoted configurations. This portal solution formed the basis for the client’s configure, price, quote, solution — the backbone for their order management and manufacturing process.
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