Oracle Shop Floor Management with Contract Manufacturer Integration and USJade Extensions

1. Oracle Shop Floor Management with Contract Manufacturer Integration and USJade Extensions Manoj Rathi, Principal Consultant USJade Corp. Jeff Lin, VP of Backend Operations Silicon Storage Technology, Inc. NorCal OAUG Training Day - January 21, 2009

2. Program Agenda • Introductions • Fabless Semiconductors: Features and Challenges • Silicon Storage Technology’s (SST) Challenges • USJade Solutions • Questions

3. Presenters Jeff Lin – VP of Backend Manufacturing Silicon Storage Technology (SST) • Project Sponsor LIMO (“Long-term Integrated Mfg Operations” ) Manoj Rathi, CSCP – Principal Consultant, USJade Corp. • 15 years in Manufacturing, Costing and Supply Chain. • Worked with Cummins for ~10 years before completing his MBA. • Worked with SST as lead manufacturing consultant for 18 months • Implemented OSFM/B2B and continued supporting SST as their acting Cost Accounting Manager for ~1 year. • Played expert role implementing OSFM/B2B at Telegent Systems, Inc. • Currently is Solution Architect and Project Mgr. for implementation of Lot Based Manufacturing Solution at Exar Corp.

4. USJade provides mission critical business solutions, delivering cost effective, revenue-impacting results Enterprise System Integration & Consulting firm Founded in year 2000 by former BIG4 consultants and industry experts Corporate Headquarters: San Jose, CA Offshore “Center of Excellence” in Pune, India “Right Shore” Delivery Model Experience with Global Implementations Over 160 Consultants Worldwide Certified Oracle Partner Oracle Business Accelerator: Exclusive Solution Provider for Fabless Semiconductor USJade Introduction

5. Domain knowledge and Industry specialization Successful track-record of customer satisfaction Client-focused approach From initial strategy to deployment that best meet our client’s needs Vendor-neutral Methodology With ability to make unbiased recommendations based exclusively on client's individual needs, objectives and technology environment Cost-effective, no compromise, revenue-impacting solutions Unparalleled passion for quality, dedication, and innovation Highly qualified and experienced team Committed to exceeding customer expectations Global Project Collaboration Model Utilizing cost effective Offshore Consulting resources USJade Introduction (Cont.)

6. Services Overview • Supply Chain Planning • Manufacturing • Warehouse Mgmt. System • Purchasing, Inventory, Costing • Order Management • Product Lifecycle Mgmt. • Financials & HRMS • Enterprise Process Management • Oracle CRM Applications • Oracle Data Warehousing • Business Intelligence • Information Management Services • Strategic Services • Enterprise Application Integration • Independent Testing • Technical Implementation • Infrastructure Support Services • Business Continuity & Disaster Recovery • IT Optimization / Green IT • IT Security & Identity Management

7. Services Overview (cont.)

8. Some of USJade’s Customers

9. Silicon Storage Technology, Inc. (SST) • Founded in1989 • Headquartered in Sunnyvale, CA • 700+ Employees in offices worldwide • Manufacturing outsourced to 40+ vendors • Customers include: Apple, HP, Infineon, IBM Motorola Nintendo, NEC, Philips and Sony http://www.sst.com/

10. SST & USJade: a Partnership • Guidance on Best Practices • Implementation of ERP and other Systems • Integration of IT Systems • Customization of IT Systems • Development of Process and IT Solutions • Ongoing Production Support • SST-USJade relationship: 3 years and going strong

11. Program Agenda • Introductions • Fabless Semiconductors- Features and Challenges • SST Challenges • USJade Solutions • Questions

12. Fabless Semiconductor Features & Challenges • Dynamic market conditions with high fragmentation on both supply and demand side. • Very short Product Life and Time to Market. • High product lead times- ~ 3 months • Lower margins and fierce competition • Globally dispersed operations • Too many channels to manage • Lot traceability issues

13. Fabless Semiconductor Features & Challenges (cont.) • Inadequate and delayed information in ERP systems • Web of sundry systems and reports outside ERP • Wide range of vendor communication (reporting) needs. • Various, dispersed communication channels • Poor visibility of lots in ERP system • lower inventory accuracy • delayed transaction processing • Poor supply-chain planning • Frequent lost sales opportunities and/or inventory write-offs.

14. Fabless Semiconductor Features & Challenges (cont.) • Inadequate controls on OSP charges and vendor payments • Complex cost accounting • Different OSP charges for different vendors • Operation Yield Costing and WIP Accounting • Inadequate variance analysis tools • Complex inventory reserve requirements • Complex auditing and compliance requirements

15. Agenda • Introductions • Fabless Semiconductors- Features and Challenges • SST’s Challenges • USJade Solutions • Questions

16. SST’s ChallengesPrevious Business Process & Challenges • Too Many intermediate island of systems to manage • Very complex and distributed error management • Near impossible lot tracking towards actual vendor events • Complex and inconsistent reporting

17. SST’s Challenges (cont.) • Separate systems for Operations and Financials • Separate product structures used for operations and standard costing • Redundancies and data-consistency issues • High job close variances • Manufacturing variances across stages were hard to identify • Poor lot traceability across vendors • Inadequate support for dynamic changes to job (e.g. vendor selection) • Splits, Merges and lot updates not/poorly supported • Additional lot information maintenance/propagation not supported

18. SST’s Challenges (cont.) • Additional lot information maintenance/propagation not supported • High discrepancy between vendor and system data. High PI error rates • Lot Genealogy and transactions were hard to trace • Rework was paid using expense POs- no traceability to lot/job • AP accrual discrepancies were very high. Reconciliation of liabilities would span across years • Job close process was a big issue as completed jobs were hard to identify due to leftover quantities in one of the operations • Material Weakness identified in Inventory Management area by PWC • Mainly related to PI, Reserves and standard Costing • Employee morale was low due to system issues

19. Agenda • Introductions • Fabless Semiconductors- Features and Challenges • SST Challenges • USJade Solutions • Questions

20. USJade Solutions and Extensions • Low risk Oracle Shop Floor Mgmt (OSFM) Implementation • B2B – Integrated lot tracking system • Automated and enhanced OSP purchasing and AP system • Single report OSP verification from WIP moves to AP invoice • Enhanced WIP accounting review and job-close process • Enhanced Lot Genealogy Report • Wafer level (sublot ) details • Streamlined and fast standard costing ; easy validations • Streamlined Inventory reserves • Manufacturing variance capitalization • POS solution

21. OSFM Implementation Project Overview • Coupled with B2B, OSP automation, Part number changes, conversion and changes to other systems • Manufacturing flow converted from 2 stage to 5 (+) stages • Standardized product structure and part numbers • WIP routings converted to Network routings • Created BOMs for new product structure • Operation Yields entered to enable yield costing and accounting • New Sub-inventories created to allow for additional stages • New variance/valuation accounts created for granularity • Reports created for users to verify items/ BOMs/ Routings load • Costs rolled up and updated for new items

22. OSFM Implementation Project Overview (cont.) • Old and New product cost reports. • Dynamic data conversion (lot level): • All lots in INV and WIP converted to new parts/stages. • Child lots created with vendor support wherever needed. • Reports created to compare before and after lot qty/values. • Lot attributes added to lots/jobs. • OSFM interfaces used to process vendor reported manufacturing events (part of B2B solution) • OSP automations • Implemented USJade OSP verification report to trace OSP from OSFM move transaction to AP invoice

23. Integrated Lot Tracking System - B2B GUI for User Admin, Customer and Vendor Mapping, Error Correction, and Reporting B2B Transactions From Manufacturing Vendors Portal for Customers to View and download Manufacturing Transactions B2B Inbound/ Outbound/ Middleware B2B Database B2B Outbound/ Customer Portal USJade Custom Adaptors Oracle EBS with OSFM, ASCP,PO Manufacturing, Financials, Order Management

24. B2B Architecture

25. B2B Key Features • Automation and Single Error correction console • Automated file processing for business transactions (WIP, INV, SO, PO, AP etc) • File Loader (Manual, FTP, B2B, EDI others) • Canonical Mapping • Custom Adapter for Oracle • HTMLDB/R12 ADF – Web application for error management • Vendor Reporting Guide • The solution can be scaled to a fully automated real-time B2B/EAI solution using middleware technologies like: Oracle SOA Suite, TIBCO, Gentran, Web Methods, Oracle EDI/XML gateway etc.

26. B2B Events to Transaction Mapping

27. B2B GUI- Error Correction • User Error Management and Corrections • Edit Manual Transactions

28. B2B GUI- Reports and Audits • Exceptional Auditing and Reporting Capabilities

29. B2B GUI- Admin and Setups Vendor Management and Admin Capabilities

30. Integrated Lot Tracking System- B2BKey Benefits • Greater visibility into the supply chain • Lot traceability by manufacturing stage (wafer, sorted wafer, etc.) • Lot movement between Vendors easily traced • Quick reporting of Manufacturing Transactions • Faster processing of Manufacturing Transactions • Realistic vendor WIP • Standardized reporting format • Scalable solution • Centralized Error Management • Improved Vendor reporting accuracy • B2B foundation for automating additional processes

31. OSP Integrations • WIP lot movements mapped and integrated with Purchasing, WIP costing and AP in a closed loop system • Automatic PO Release functionality • Automatic receiving on OSP charges in the job based on completion of operation • Changes in lot due to split, merge or other WIP lot transaction are automatically propagated to purchasing. • Reports to identify discrepancies in OSP activities. • Enhanced vendor payment process and automated AP Invoice matching • High productivity improvements in purchasing and AP

32. Work In Process (WIP) Costing & Job Close Process • In depth understanding of Oracle WIP costing and job close process including estimated yield accounting • USJade extension to Oracle standard functionality to validate jobs and analyze variance. • Reports unusual and missing expected transactions. • Easy communication between cost-accounting and operations • Potential to improve cost-accounting team productivity and minimize errors/discrepancies. • Efficient and clean auditing features

33. Enhanced Reports • USJade lot genealogy • Provides additional information in a customized format • Provides information about all lots related to queried lot within and across inventory orgs • OSP verification – WIP-move to PO and AP links. • Standard costing verification Reports • Good die per wafer- actual vs. standard • Operation yield performance report • Historical and expected PPV for on-hand and open PO qty. • Inventory reserves Report • Manufacturing Variance Capitalization

34. & Q A

35. Contact Us Manoj Rathi Principal Consultant USJade Corp mrathi@usjadecorp.com Office: 408-436-8303 x48 USJade Corp 2001 Gateway Place, Suite 570W San Jose, CA 95110 http://usjadecorp.com USJade Ltd. E-Space IT Park, A-3, 2nd Floor, 102 D/E, Wadgaon Sheri, Pune-Nagar Road, Pune 411-014