Discusión general

Supply Chain Management and Procurement

The mission of ATMI’s supply management division is to create value for both internal and external stakeholders by sourcing, selecting, and managing high- performing suppliers. The driver behind ATMI’s mission is its customers’ focus on

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quality in light of the highly complex nature of semiconductor components. The semiconductor market also relies heavily on the assurance and consistency of supply because any minor change to materials may impact the final product and the manufacturing process.

ATMI’s supply chain management and procurement groups are separate, but both report to the senior director of supply chain. The supply chain management group, with a staff of nine resources worldwide, focuses on direct spend categories, developing sourcing strategy, assessing supplier qualification, negotiating and contracting, managing costs, identifying value proposition opportunities, and serving as leadership for the organization’s supplier management teams (SMTs). The procurement group, with a worldwide staff of 10 resources, primarily handles purchase orders for direct spend, indirect expense items, and capital spending, and assesses supplier performance.

SMTs are cross-functional groups composed of a member of the supply chain management group, a quality representative, and a technical representative. This composition helps to provide a holistic view of the sourcing process. The supply management representative serves as the leader of the SMT and the main point of contact between ATMI and the supplier. The quality representative conducts supplier assessments and continuous improvement projects (CIPs) and collects and analyzes supplier performance data. The technical representative is a scientist who acts as a consultant to suppliers to make sure they can provide what is needed. SMTs receive support from ATMI’s marketing and procurement groups as needed. Figure 10 illustrates the functions of SMTs and their sources of input.

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SMTs: Functions and Sources of Input

Figure 10

Business management teams (BMTs) are cross-functional teams headed by senior leadership from across the organization. Members of the teams come from ATMI’s marketing, supply chain, product management, and finance groups. The primary function of BMTs is to break down the activities of ATMI into more manageable pieces. Ultimately, the BMTs determine the actions of ATMI; they set priorities for the organization and ensure that ATMI’s resources are aligned to achieve those priorities.

STRATEGIC IMPLICATIONS

Strategic Objectives

Due to its customers’ high quality expectations and strong resistance to change, ATMI incorporates sourcing activities early in the new product development process (Figure 11). The organization’s new product development process consists of six phases, with a gate review between phases. ATMI includes supply chain identification as early as its third stage, “alpha research.” Scorecard criteria for supplier identification are defined by functional area at each phase gate with a focus

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on supply assurance and supplier capabilities. A BMT oversees all of the new product development activity and resources. Involving the supply chain management group early in the product development process works best for ATMI because, given its highly specialized materials, the organization would find it difficult to find an alternative supplier once a product was developed and sourced.

New Product Development Process

Figure 11

Category Management Organization

ATMI manages four broad categories of materials: equipment for semiconductors and the life science industry, off wafer materials (materials that move items off of a semiconductor wafer), on wafer materials (materials that put items onto a semiconductor wafer), and plastics and films. ATMI uses a traditional pyramid structure to classify its suppliers, with suppliers at the top of the pyramid making up 11 percent of ATMI’s suppliers and receiving 87 percent of the spend.

ATMI has a process set out for the management of each of its categories (Figure 12). The first half of the process is labeled as a strategic definition period. The process begins with a category profiling phase in which analysis is conducted on the current market and the internal need for the materials. A category/SMT strategy phase then occurs in which the SMT defines its objectives by focusing on new product development sourcing strategies, supplier performance goals, and key projects. In the strategy consensus phase, the SMT communicates with the

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the overall needs and objectives of the organization. The second half of the process is labeled the execution period. The first phase in this period is the product phase gate readiness phase, in which requests for proposal are developed and ultimately suppliers are chosen and awarded contracts. The process then moves into the supplier performance and relationship management phase, in which ATMI’s procurement group monitors suppliers for contract compliance. In the past, ATMI had supplier awards and supplier forums in place for this phase, but the recent economic downturn put those activities on hold. ATMI is currently working to re- establish those activities. The last phase in the category management process is the continuous improvement phase, in which internal feedback and lessons learned are gathered. ATMI also uses this phase to identify CIPs with suppliers and any intensive engagements that may be needed.

Supply Management Process

Figure 12

Supply Chain Risk

ATMI uses category plans to establish the strategy for a particular category. These plans generally consist of a category overview, a spend analysis, a market and supplier risk analysis, a roadmap with strategic objectives, strategic plans, an issues list, a supplier segmentation overview, a supplier performance summary, a list of any necessary corrective actions, supplier dashboards, and performance metrics. Using the category plan, the supply chain manager works with the SMT to develop a holistic strategy for the category. Once the plan is created, it is shared with key internal stakeholders to make sure that it is in line with ATMI’s priorities and objectives. It undergoes a major update annually with another minor update in the middle of the year.

Category Profiling

Category/SMT Strategy

•Market/supply analysis •Internal needs analysis •Spend analysis Strategy Consensus Product Phase Gate Readiness Supplier Performance & Relationship Management •Define SMT objectives •NPD sourcing strategies •Supplier performance goals •Key projects

• Operations & Supply Chain Management • BMT Alignment

•Request for proposal •Proposal analysis •Negotiation •Supplier qualification •Supplier selection •Award •Defined metrics •Contract compliance •Segmentation measures •QBR feedback •Supplier awards •Supplier Forum Continuous Improvement Internal •Lessons learned •Feedback Supplier •Defined CIPs •Intensive engagements

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Figure 13 illustrates the category overview section of ATMI’s category plan. This is a high-level summary of the category that includes current market conditions and a list of the current suppliers. The spend analysis then breaks down each category into subcategories of more specific types of products. Spend is also broken down by supplier to determine which suppliers receive more of the spend and how this has changed over time. The spend analysis also includes a category environment analysis in which any category trends are identified as well as any emerging technologies that may impact the market for the category. A market summary is then created that details any industry, supply, pricing, and technology trends in the market and how those trends could impact ATMI.

Category Plan: Category Overview

Figure 13

In the supplier risk analysis, the SMT looks at the key suppliers within the category and calculates a risk probability for each one so that the organization can understand where its highest risks are. Figure 14 shows the chart on which each supplier is placed to assess its risk. Any supplier in the red section of the chart should be considered for a risk mitigation strategy. This may involve finding a completely new supplier, investing more in the development of the current supplier, holding extra inventory from the supplier, initiating more continuous improvement processes, or other actions.

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Supplier Risk Analysis

Figure 14

The SMT then establishes strategic objectives to outline any key issues that need to be addressed within the category. A strategic roadmap is created that outlines strategies and initiatives for both short-term and long-term challenges. The strategic roadmap must ultimately tie back to ATMI’s business needs to ensure that the supply chain management group is delivering what the organization needs.

Strategic plans (Figure 15) are created as required to outline the objectives for the category, the strategy, any requirements for the strategy, the results to date, and any key actions. A temperature gauge is included for each item in the plan to convey the status of the strategy.

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Sample Strategic Plan

Figure 15

The SMT typically reviews key supplier historical performance metrics for the category (Figure 16). This includes supplier scorecard performance, any CIPs, and any corrective actions taken over the previous four quarters. These metrics provide a way for the SMT to assess whether the investment ATMI is making in the suppliers has delivered any results and whether the SMT needs to reassess its approach with any of the suppliers.

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The SMT also creates a supplier summary dashboard (Figure 17) as an overview with key data on the supplier, and a stoplight report on key performance metrics for the supplier. These dashboards are often used by senior staff when they visit a supplier to get a general overview of the how the supplier is performing. Figure 17 is the template for the supplier summary dashboard.

Sample Supplier Summary Dashboard

Figure 17

ATMI has a supply chain maps and alert system to help mitigate risk of disruptions to its supply chain due to natural disasters. This alert system is focused on the top revenue generating products. The system has a map of each product through ATMI’s suppliers and to the base elements provided by the suppliers’ suppliers. The alert system includes the geographical coordinates of each base element, so when an alert notification system such as the U.S. Geological Survey’s National Earthquake Information Center reports an event, the supply chain management staff can quickly contact potentially affected suppliers to determine any action needed. The supply chain team can also input coordinates and the radius of concern directly into the system to obtain which products and suppliers could be affected by an event. With the maps and alert system, ATMI has the opportunity to quickly enact a contingency plan, which could allow the organization to be one of the first to obtain any alternative supplies. The alert system also allows ATMI to have quick answers to any customer inquiries that may result from an event.

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RESOURCE COMMITMENT AND TALENT MANAGEMENT

Supplier performance is managed by the procurement group at ATMI. None of the supply chain management or procurement functions are outsourced. ATMI has partnered with students at Texas A&M University to develop risk management tools, but those tools are still under development. ATMI also partnered with students at The University of Texas at Austin to develop its maps and alerts system. ATMI uses online resources, internal job postings, talent search agencies, and a referral program to identify supply chain professionals for its organization. ATMI has adopted the concept of being an “A-player company,” in which results come from employees, and the organization’s culture is based on integrity, edge, energy, and the ability of employees to energize others. ATMI focuses its employee development program on organizational and operational excellence. It strives to be an organization in which employees both teach and are taught. A development plan is available for each employee to outline the employee’s career plan and personal development plan. The employee’s skill level in various areas is assessed, and training requirements are based on that assessment.

ATMI does not have a defined job rotation program in place due to the organization’s size and different geographic locations. However, employees are encouraged to rotate to other supply chain areas as they are able.

CATEGORY-SPECIFIC PROCESSES AND TOOLS

ATMI uses a Microsoft SharePoint site as a data repository and as a means of facilitating collaboration among supply chain management employees across the globe. The SharePoint site is also used for ongoing meetings and to house slide decks and dashboards, all of which are modifiable by team members. A calendar is used to document personal time off taken by the team members as well as meetings with suppliers. The SharePoint site enables managers to see the activities of the supply chain management team and also enables members of the supply chain team to see the activities of other members.

The ATMI supply chain management group stays informed of market trends by reading through market trend analysis reports, attending conferences, reading articles in publications, and networking with suppliers. The group uses these resources as well as customer suggestions to identify potential suppliers.

Automation and Systems Support

The majority of the tools used by ATMI in its supply chain management functions were developed in-house and originated from its customers’ need for assurance of supply. ATMI obtained some tools directly from customers and then adapted them for use by ATMI.

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on-site assessment of the potential supplier. The supplier survey contains sections on the supplier’s general business information, facilities, operations, supply chain management capabilities, engineering, human resources, information technology, finance information, environmental health and safety, and quality with regard to the material to be sourced. Information on the target product for ATMI and a checklist of required documents are also included in the supplier survey. The supplier survey includes a hidden scoring sheet that is password protected. The hidden scoring sheet automatically flags the supplier responses that merit further investigation and analysis before ATMI can make a decision on whether to proceed with the selection process.

Supplier Survey – Sample Sections

Figure 18

A supplier assessment is conducted by a cross-functional team with a focus on five areas: quality of product, planning, supplier assurance, customer focus, and change

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control. Scoring criteria are defined for each question in the tool so that suppliers can conduct a self-assessment. Members of the cross-functional team conduct an on-site visit with the supplier to establish scores from ATMI. Any score of less than 70 across the categories indicates that further improvement is needed for the supplier but does not eliminate the supplier from the selection process. ATMI has recently added questions regarding the sustainability practices of potential suppliers, although implementation of these practices is not a requirement for the contracting process.

Supplier Scorecard: QCAST (quality, cost, ability to deliver, service, technology) are

the elements of the current ATMI supplier scorecard. The scorecards are only used with ATMI’s top tier of suppliers and are completed quarterly or biannually. The scorecards have a self-scoring mechanism so that suppliers can immediately recognize any areas that need improvement. The scorecards have detailed questions within each section. The elements of the scorecard are weighted, with the quality section having the most weight. ATMI is shifting its supplier scorecard methodology from QCAST to QSD (quality, service, delivery). This scorecard will be used for all direct suppliers and will require monthly data reporting. Data will be pulled from the available supplier metrics into the scorecard, which will then be sent automatically to the suppliers for review.

Sourcing Guide: ATMI also uses an online sourcing guide, which is a database of

preferred supplier sources managed by the supply chain management group. The database includes the category and subcategory of each supplier and is intended to be used as a guide for the engineering and development teams during the supplier selection process. The sourcing guide originated from the need to find established suppliers with competency in a particular area rather than suppliers that could produce a particular part. The sourcing guide is available on ATMI’s intranet site.

Sales and Operations Planning: ATMI uses a complex monthly sales and operations

planning (S&OP) process that looks 24 months into the future for factors that could affect ATMI and its supply chain. It begins with a product management review that evaluates and updates product development. The process then moves to demand planning to predict what customer needs will be and when they will change. A supply review involves capacity planning and assessing ATMI’s ability to meet demand. The entire plan then undergoes a management business review at the highest level of the organization. Once management approves the plan, the team executes that plan.

Risk Assessment: ATMI utilizes a risk probability index tool (Figure 19) to calculate a

score for select suppliers. The tool uses exponential scoring to assess the risk of the supplier. The index is then used to plot the supplier on the supplier risk analysis chart. ATMI uses this risk probability to determine whether it needs to consider actions such as additional investments to help a supplier or if it needs to pursue sourcing from another supplier.

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Risk Probability Index Tool

Figure 19

CONCLUSION

ATMI manages four broad categories of materials for technologies within the semiconductor, life sciences, and display industries. The organization’s supply chain management group owns the sourcing strategy, supplier identification, and contracting processes, while its procurement group manages purchases and supplier performance evaluation. ATMI has multiple tools in place to evaluate supplier performance, assess risk, and mitigate risk from external disruptions. ATMI values quality of its materials and its employees above all else. This focus on providing quality, as well as supply assurance and consistency of supply, has influenced the way ATMI manages its supply chain processes.

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