Total Supply – benefits for all

Infineon is not the only company to realise the advantages which Total Supply can offer. Many other businesses are already profiting from this modern approach to the supply of cleanroom materials. A concept, tailored to individual requirements, is developed in close co-operation with the customer, leading to major cost reduction. All of the concepts have one thing in common: the customer specifies the necessary materials and defines the quantities used – from which Basan calculates the safety stocks necessary to eliminate possible shortages in advance. The administrative and logistical processes are then checked for compatibility with customer specific processes. In one particular case, the customer has 12 different internal stores. Usage is reported daily and must be immediately replenished. The materials are immediately picked at the external store and delivered direct to the different internal stores. There is one consolidated invoice for the materials used. A completely integrated solution exists in a further example where the customer withdraws materials from an on-site consignment store. The stock movement report initiates a call for goods and the necessary transport from Basan. The incoming goods are identified by the customer using barcodes and paid by a weekly credit note.

Three examples of total supply processes: Customer A

• Customer chooses the required products via an electronic product catalogue
• Goods are picked from consignment stock on site and supplied to user
• Picking-order is electronic and automatically sent to the Basan SAP-System
• Picking of products and resupply to consignment stock
• Based on the quantities withdrawn, and after the monthly closing, customer generates a consolidated credit note with pre-entered currencies

Customer B

• Customer withdraws product from 12 internal stores and reports the movements to Basan
• Replacements are called, over SAP, from Basan's own external store
• Daily picking from the external store and supply to the 12 internal stores
• Consolidated invoice after monthly closing

Customer C

• Customer withdraws goods from the consignment store and reports the movements to Basan
• Picking-order is electronic and automatically sent from customer ERP-system to the Basan SAP-System and is automatically transferred to the Basan external storage location
• Picking from the external store and supply to the consignment store
• Recording of goods receipt by customer using barcode
• Creation of weekly credit notes based on the recorded goods receipts

Convincing efficiencies By using the integrated systems, customer C has achieved an automatic, paper-free communication from ordering to receipt of invoice. By real-time control of stock quantities, supplemented by rolling forecasts, the company achieved an optimal supply performance in 2002: 99.59% on-time delivery and 99.57% correct for both item and quantity across 20,000 different items per annum. However the administrative and logistical procedures are not the only processes, which can be optimised within Total Supply. The close partnership co-operation makes it possible to analyse the complete purchasing process and to identify and achieve further cost-saving potential such as:

• Joint development of a product in close co-operation with customer and manufacturer – material cost reduction e327,080 per annum
• Optimising of the purchasing conditions and active switch to alternative high quality products – cost saving for the customer is 8% of the total material cost
• Integration of all 'C' products in the range, with a major reduction of administrative cost for the customer

• Early warning of bottlenecks
• Avoidance of delivery delays through identification and definition of second sources
• Creation of 'to do' lists for early identification of problem areas
• The option of transferring all administrative tasks and the complete material supply logistics to Basan

Full service concept In the past, Total Supply has been sometimes viewed with scepticism, particularly by small and medium-sized businesses. The most common criticism was that the logistic costs could only be justified by large volume usage and that the concept would therefore only be effective for larger businesses. A further criticism against Total Supply was that a single supplier would be unable to adequately serve the specific product requirements of the customer. We decided to thoroughly examine the conventional Total Supply model and developed an alternative approach, making it possible to satisfy in a more specific way the requirements of the customer and to also meet the needs of small and medium sized businesses. The result is a 'Full Service Concept' developed on modular principles, and consisting of three basic modules: Module 1 – products and services that are customer-specific with the security of price and delivery Module 2 – product management Module 3 – logistic service

Module 1 Within the concept of this module, the following services can be included while the separate services 'Product Management' and 'Logistics' can be excluded:

• Support for customer projects such as the introduction and qualifying of cleanroom products
• Product development to customer requirements
• Creation of synergy effects through experience exchange between customers
• User training
• Development of constructive dialogue between customer and manufacturer
• Available 24 hours a day, seven days a week

Module 2 Although all customers can benefit from professional product management, the inclusion of this second module means that Basan can be contracted to seek for alternative products and to compare specifications

Module 3 Integrating the third module completes the 'Full Service Concept'. The Logistic Service offers the creation and administration of consignment stores, complete planning of materials and transport, reports and statistics of material movements, use of the SAP supported logistic systems through to complete systems integration, access to three central stores in Europe, direct despatch from manufacturer – when the products are not in stock – and control of material movements through barcode reading. The Full Service Concept is a pragmatic solution that offers wide-ranging advantages even for lower volume usage. The modular approach creates the conditions that enable us to focus on the customer's specific requirements, to take account of technical product concerns within the first module and to make possible the creation and further development of products.