The Challenge and Benefit
Teradyne operates in a complex and volatile market. Teradyne’s products comprise 3,000 – 5,000 parts each. As Teradyne seeks cost savings through outsourcing relationships, new complexities are introduced into its global supply chain, which now spans five Teradyne and four subcontractor sites. Particularly long lead-times that can hamper responsiveness to change are a constant challenge. One of the most significant challenges is the transmission of frequent demand changes and the inability to lock in the supply with “frozen” demand windows. Outsourcing also creates new challenges in terms of inventory liability and managing excess and obsolete inventory.
In addition to an increasingly complex supply chain, Teradyne faces challenging demand fluctuations. The market has seen significant upswings during good times, while customers are quick to “slam on the brakes” in soft markets. It is not uncommon to see a product’s shipments double in one quarter and be cut in half over sequential quarters.
Teradyne concluded it required a supply chain management solution with global visibility and rapid response capabilities to manage changes in demand, understand supply consumption and how to manage supply disruptions, shorten lead times, and reduce excess and obsolete inventory.
Teradyne found that Kinaxis RapidResponse had the unique architecture to integrate not only with its Oracle enterprise resource planning (ERP) system but also with the ERP systems of its contract manufacturers while enhancing their responsiveness.