I've worked in the semiconductor universe for many years, and what AMD has achieved is truly extraordinary. For the last seven years, E2open has been on a fascinating journey with AMD as it worked to bring agility and competitive advantage into its supply chain by meeting the need for end-to-end insight. This process included building an integrated platform for finance, planning, global operations and logistics, and factory operations.

When we first began our work with AMD in 2006, 90 percent of the company's manufacturing was performed in-house. Since then, AMD has evolved into a fabless semiconductor company that outsources 80 percent of its manufacturing. More than 150,000 transactions from AMD's global supplier network, which includes 30 factories, flow into and out of the E2open environment every day.

AMD recently completed another critical leg of its supply chain journey: financial transformation. From the outset, AMD had a goal of bringing financial insights to its supply chain operations decisions. Like many companies, its finance function was disconnected from supply chain information, and could not effectively assess how decisions made in the supply chain would affect costs. So, AMD decided to consolidate its finance and operations processes on E2open as well as on SAP, its ERP solution.

In a recent webcast hosted by Supply Chain Digest, in which I took part, Katrin Schulenberg, senior director IT for AMD, explained the impact of this consolidation on the company's supply chain. She said that as AMD's suppliers (none of which use the same manufacturing platform) and factory operators move products through the manufacturing process, information about the manufacturing stage of those products passes through the E2open solution. Then, that information flows from E2open into the SAP environment - and to AMD's finance team.

By bringing finance, operations, engineering, and suppliers together on a common platform, AMD has essentially solved the challenges of transparency and collaboration in its global supply chain. This platform provides the visibility and integration the company needs to succeed in an outsourced model.

Some of the benefits AMD has experienced as a result of this transformation:

  • It can now more accurately assess the cost associated with every internal or external manufacturing step.
  • It is able to continually improve product quality.
  • It has reduced supplier errors by 95 percent.
  • It has achieved 99.9 percent inventory accuracy.

In addition, AMD has been able to move to a no-invoice model on E2open and SAP, leveraging the Evaluated Receipt Settlement process in the latter solution. When a certain point is reached in the manufacturing process, E2open sends a trigger to the SAP side, and AMD issues payment to the supplier for work actually performed. This is not only a more efficient process, but a more accurate one, and it eliminates the potential for suppliers to overcharge AMD for services.

These are only some of the dramatic results that AMD shared during the webcast. AMD is truly a leader and visionary in supply chain transformation. It has to be: AMD operates in a fiercely competitive landscape that demands it does what is necessary to be best in its class.

If your organization is facing challenges with multi-tier visibility and collaboration in its supply chain, spend a few minutes with AMD's story and the lessons the company has learned throughout its 7-year transformation. It's been a long journey, but one that clearly has been well worth the time and effort. E2open is proud to have played a key role in helping AMD realize its supply chain vision.

You can view the webcast "Aligning Operations and Finance for Better Decisions, Accountability and Visibility" here.

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