Integrated Supply Chain Planning

JDA Software Group, Inc., completed its acquisition of i2 Technologies, Inc., in January 2010. SanDisk Corporation, a legacy i2 customer, continues to work with JDA on its supply chain management initiatives.

Case Study

Business Challenge To maintain its market leadership, SanDisk sought an advanced planning solution that would provide the company with the scalability and flexibility it needed for rapid growth.

Business Solutions • JDA® Supply Chain Planner• JDA® Demand Manager • JDA® Enterprise Architecture

Business Benefits• Improved forecast accuracy by more than 25 percent • Enhanced decision making as a result of improved plan quality

and alignment• Improved on-time delivery resulting in enhanced customer satisfaction

and business partnership expansion • Higher inventory turns and lower cost structure

SanDisk Corporation Fast Facts

Industry Global Manufacturer of Flash Memory Cards

Headquarters Milpitas, California

Description SanDisk Corporation is the global leader in flash

memory cards, from research, manufacturing and product design to consumer branding and

retail distribution. SanDisk’s product portfolio includes flash memory cards for mobile

phones, digital cameras and camcorders; digital audio/video players; USB flash drives

for consumers and the enterprise; embedded memory for mobile devices; and solid state

drives for computers. SanDisk is a Silicon Valley-based S&P 500 company, with more than half

its sales outside the United States.

“We produce one million units a day, and without JDA’s advanced planning

solution, we could not do that. This truly has been our lifesaver, and has given us

the ability to continue our very rapid and aggressive growth rate.”

- Cecilia Claudio, former chief information officer,

SanDisk Corporation

Improving Sales and Operations Planning

at SanDisk Corporation

Serving both consumers and original equipment manufacturers, SanDisk Corporation designs, develops, manufactures and markets flash storage products for a wide variety of electronic systems and digital devices. After experiencing years of tremendous growth in segments such as digital imaging, mobile phones, USB drives, and personal media players, SanDisk faced a number of market challenges. Product commoditization, declines in sales prices, and a rapid influx of new competitors led to shrinking margins for the world leader in flash memory products. To maintain its market leadership, SanDisk would need to address these issues by increasing customer satisfaction, improving profit margins, and enabling expansion of its product offerings.

Achieving these goals meant that SanDisk needed to better adapt to the cyclical nature of the semiconductor industry. The company needed to manage expenses early in the first half of each year and to re-invest heavily in the second half to continually provide higher capacity flash memory products and newer, innovative products, such as solid-state drives. The result of these annual periods of accelerated growth was a proliferation of ad hoc, manual planning solutions throughout the organization.

SanDisk sought to establish an integrated planning infrastructure that allowed the scalability and flexibility needed for rapid growth. This fabless company also needed better collaboration, not only among internal business units, but within its highly specialized relationships with its global manufacturing partners. This infrastructure would be backed by improvements to the company’s sales and operations planning (S&OP) processes.

Unfortunately, enhancing the planning process proved challenging for a company with a global organization, as well as manufacturing partners and distribution centers across multiple countries. The effort necessary for data collection, forecasting, and business plan creation made it impossible for SanDisk to execute the S&OP process on a monthly basis.

“We would bring together people from different parts of the organization, and either they would reach consensus, or we would go back and start over,” said Cecelia Claudio, SanDisk’s former chief information officer. “From there, we would then look at what supply was available. If we had to do some additional planning on the supply side, we would then move on to a review and adjust, based on both the supply as well as where we thought the demand was coming from. Then we would approve and act accordingly with the distribution centers. This process took us two to three months.”

Why JDA?

To facilitate its integrated planning approach, SanDisk looked to implement an advanced planning solution. With the assistance of an outside consulting firm, the company conducted a business assessment to design a global footprint for the solution.

After process design and requirements for the solution were identified, SanDisk looked at a number of potential software offerings. The company decided that supply chain solutions offered by JDA* would best satisfy their needs.

“We went out into the marketplace, and we found the best-of-breed solution in JDA,” said Claudio. “So we brought that in, and they’ve helped us design, do a gap analysis between ‘as is’ and ‘to be’ processes, and also the solution architecture, starting all the way from the bottom of the tier of the architecture stack.”

JDA’s Contribution

SanDisk implemented a variety of JDA supply chain management solutions. These solutions have enabled SanDisk to establish the demand visibility and supply chain flexibility necessary to improve forecasting and integrate planning with manufacturing.

In addition, JDA’s solutions assist with the inventory optimization, allocation planning, demand-supply balancing and data management that SanDisk needed to improve its S&OP processes.

“We are now able to see where demand is coming from regionally, and we’re able to make the right allocations based on that increased visibility,” Claudio said. “As part of the supply planning process, we also now can generate a master production plan, and we can do it on a daily basis, if need be. So, we have the ability to know what production needs to look like, and we can take into account any type of capacity or material constraints, the business unit allocations that have been made, and all of the inventory that’s available or that we need to build in order to meet the demand.”

SanDisk’s Results

Since its implementation of JDA solutions, SanDisk has been able to conduct its end-to-end S&OP planning process on a monthly basis. Increased demand visibility has enabled the company to improve forecast accuracy by more than 25 percent, and improved plan quality and alignment has enhanced decision making.

“With the JDA advanced planning solution we are now [conducting S&OP] planning on a monthly basis,” Claudio said. “The new process has been able to bring everybody together to execute one plan and to deliver on this plan through the consensus that we achieve.”

JDA solutions also provided the supply chain flexibility necessary for end-to-end planning and build-to-order manufacturing execution. Improved on-time delivery of SanDisk’s products has resulted in enhanced customer satisfaction and expansion of business partnerships. In addition, JDA solutions have also produced higher inventory turns and a lower cost structure for SanDisk’s supply chain.

“We produce one million units a day, and without JDA’s advanced planning solution, we could not do that,” Claudio said. “This truly has been our lifesaver, and has given us the ability to continue our very rapid and aggressive growth rate.”

About JDA Software Group, Inc.

JDA® Software Group, Inc. (NASDAQ: JDAS), The Supply Chain Company®, is a leading global provider of innovative supply chain management, merchandising and pricing excellence solutions. JDA empowers more than 6,000 companies of all sizes to make optimal decisions that improve profitability and achieve real results in the discrete and process manufacturing, wholesale distribution, transportation, retail and services industries. With an integrated solutions offering that spans the entire supply chain from materials to the consumer, JDA leverages the powerful heritage and knowledge capital of acquired market leaders including i2 Technologies®, Manugistics®, E3®, Intactix® and Arthur®. JDA’s multiple service options provide customers with flexible configurations, rapid time-to-value, lower total cost of ownership and 24/7 functional and technical support and expertise.

*This case study is based on a presentation Cecilia Claudio gave during the i2 Planet 2008 General Session. SanDisk Corporation is a customer of i2 Technologies, Inc., which was acquired by JDA Software Group, Inc., in January 2010. SanDisk continues to work with JDA on its supply chain management initiatives.

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