Academic journal article The Journal of Business Forecasting Methods & Systems

Planning Process in a Multi-Unit Environment: Philips Semiconductors' Experience

Academic journal article The Journal of Business Forecasting Methods & Systems

Planning Process in a Multi-Unit Environment: Philips Semiconductors' Experience

Article excerpt

Describes week-by-week planning process used by Philips Semiconductors ... process starts with customers and ends with customers ... shows how a decentralized organizational structure can work in harmony to achieve the economy of scale.

Philips Semiconductors is a multi-national and multi-unit company, head-quartered in Eindhoven, The Netherlands. It has offices in Europe, North and South Americas and Asia. Manufacturing facilities are located in Western Europe, United States, Taiwan, Thailand, and Philippines. It employs about 29 thousand people and its total revenue in 2001 was $4.6 Billion. It is among the top 10 semiconductor manufacturing companies.

DECENTRALIZED OPERATION

Philip Semiconductors is comprised of eightBusiness Units (BU), which reports directly to the headquarter. These eight units are:

* Discrete and Multi-market ICs

* Digital Consumer Systems

* Display Systems

* Analog Consumer Systems

* Mobile Consumer

* Mobile Communications

* Identification

* Emerging Businesses

Each Business Unit is a strategic group that directs several Business Lines (BLs). Each Business Line operates as a profit center and has full business responsibility. Although 8 Business Units direct a total of 27 Business Lines, each Business Line manages its business almost independently and competes with each other for manufacturing capacity. This decentralized organizational approach requires well-synchronized and robust processes to take full advantage of economies of scale.

PLANNING PROCESS

Every Business Line is responsible for its own forecasting and has designated personnel to perform this task. This decentralized forecasting ensures that this important business process is close to the business of the Business Line. But it needs alignment of the 27 Business Lines throughout whole Philips Semiconductors to leverage economies of scale and to bundle the purchase power of the organization. A monthly Forecast Planning Cycle that aligns all Business Lines works as follows:

Week 1: In week 1, the RSO (Regional Sales Organization) consolidates information obtained from the market and customers, which is used to provide a first shot of the forecast to the Business Line. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.