Posted: May 18th, 2009, 4:08 am
即时生产模式曾被奉为经典，并令日本丰田名声大噪，然而在经济危机冲击之下，这种生产运营方式遇到了麻烦，给企业、尤其是行业价值链末端的企业带来了很大的危害，原因之一在于消费市场的需求预测困难，二在于派生需求（消费需求的变化导致生产需求的更大倍数的变化）
* MAY 18, 2009
<span style='font-size:14pt;line-height:100%'>Clarity Is Missing Link in Supply Chain</span>
By PHRED DVORAK
For a man who sells the chip "brains" that power millions of TVs, cameras and other gadgets, Levy Gerzberg found himself surprisingly unplugged last fall. In just a few short weeks, business virtually stopped.
He still marvels at the speed of the collapse. "I think about it today, and ask, 'Why did it happen so fast?' " says Mr. Gerzberg, CEO of chip designer Zoran Corp.
The reason is now starting to become clear. <span style='color:blue'>The world's complex "just in time" manufacturing supply chains are making it increasingly tough for Zoran, and any other single link in the chain, to know what's going on just a few links away. </span>Sometimes, Zoran itself doesn't even know how its own chips are used: One batch it thought was destined for DVD players instead turned up in digital picture frames.
<span style='color:blue'>The recession has exposed a harsh side effect of the supply-chain system. Because modern industry rewards suppliers with the leanest inventories and fastest reaction times, when economic crisis struck, tech companies up and down the line contracted as sharply as possible in hopes of being the ones to survive.
Forced to guess at demand for their products in a plummeting market, everyone hit the brakes, hard. An examination of the electronics supply chain -- from retailers all the way back to makers of factory machinery -- shows that, at almost every stage, companies were flying blind as they cut.</span>
"We're still not sure what happened," says Angelo Grestoni, owner of a California machine shop that mills aluminum parts for chip-making machines. He is many steps away from Zoran on the chain, but his clients, too, evaporated around the same time. Today Mr. Grestoni employs 150 people, down from 600 just 18 months ago.
The cumulative result: The tech pullback may have been overdone. In March, Best Buy Co. said it could have sold more electronics equipment in the three months ended Feb. 28, but its suppliers' deep cuts made it tough to keep shelves stocked. Suppliers "all decided to build a lot less," says Best Buy merchandizing chief Michael Vitelli.
<span style='color:blue'>As the contraction raced down the supply chain, its effects became amplified.</span> Rick Tsai, CEO of chip manufacturer Taiwan Semiconductor Manufacturing Co., has said that, in last year's final quarter, <span style='color:blue'>consumer purchases of electronics gear in the U.S. fell 8% from the prior year. But product shipments fell 10%, and shipments of the chips that go into the gear dropped 20%.</span>
The speed of the cuts are a big change from previous economic slumps. As recently as the early 2000s, companies compiled orders only monthly or quarterly; now they often do it every week. Their quicker reflexes this time kept their inventories from swelling dangerously, as happened last time, supply-chain experts say.
This has consequences for economic recovery. Although U.S. gross domestic product fell 6.1%, on an annual basis, in the first quarter, nearly half of that was due to inventory reductions. Since consumer spending actually grew 2.2%, some factories might need to increase output, economists say.
Production is starting to snap back, at least a little. Taiwan Semiconductor, or TSMC, in March boosted first-quarter earnings, and Zoran last month reported a jump in forecast orders.
Still, "It's easier to turn the switch off than turn it back on," says David Pederson, Zoran's vice president of corporate marketing. Growth forecasts also get muddied because several of Zoran's customers may be optimistically competing for the same manufacturing contract, he says, and they can't all win it.
Zoran is the kind of niche firm spawned by the widely dispersed global tech industry: It designs specialized video- and audio-processing chips for products such as cameras, TVs and cellphones. Its customers are mainly little-known Asian companies -- rent-a-factories, basically -- that manufacture the world's gizmos on behalf of brand-name giants like Toshiba Corp.
<span style='color:blue'>Complexities in the global supply chain make it tough to divine broad market trends</span>, says Randy Bane, an economist for Applied Materials Inc., which makes factory equipment used to build chips like Zoran's. Applied Materials had a loss of $133 million in its fiscal first quarter and a loss of $255 million in the second quarter, ended April 26 -- its first quarterly losses since 2003. It told employees to take four weeks of unpaid leave in the first half of this year, something it's never done before.
Just a decade ago, the supply chain had far fewer links, Mr. Bane says. Chip sales were driven largely by personal computers, and just a handful of companies were bellwethers for the industry. Today, everything has a chip in it, dramatically multiplying the complexity. Behavior is "much more difficult to predict," he says.
At one end of the information flow are retailers such as Best Buy. For the U.S. market, it sends orders to its suppliers once a week, along with private forecasts for the coming 52 weeks, based on sales at its 1,000 U.S. stores and broader economic data. Manufacturers scrutinize reports like these to decide what parts they need to order.
<span style='color:blue'>The system is geared to respond quickly to changes in consumer behavior. But that puts risk on suppliers' shoulders.</span>
Take DVD players: Best Buy orders them about six weeks before it wants them on shelves. However, a player's guts may take twice that long to make -- forcing gadget makers and their suppliers further down the chain to guess at demand for the various pieces.
Companies all along the supply chain live in mortal fear of piling up inventory. Profit margins are razor thin, and unsold inventory only loses value as newer technologies hit the market.
Last fall, as the financial crisis struck Wall Street in full force, shoppers at Best Buy became an endangered species. By early October -- the deadline to place orders for the all-important Thanksgiving shopping season -- Mr. Vitelli, the merchandising chief, abandoned Best Buy's prior forecasts and slashed orders to electronics giants such as Japan's Toshiba and South Korea's Samsung Electronics Co.
Demand was shrinking so rapidly, he says, he wasn't even sure how deeply to cut. "You actually had to pick a number with no knowledge whatsoever, because nobody knows anything," he recalls. For the three months ended Nov. 29, Best Buy's net income fell 77%.
If Best Buy felt ambushed, its suppliers had even less insight into consumer demand. The slashing began.
Two or three links down the chain, chip designer Zoran quickly felt the pain. Even before last fall's crisis hit, Zoran's customers were getting nervous, executives say. When Best Buy and other retailers cut their orders in October, it turned into a rout.
"Everyone was looking at others, asking, 'How much money do they have? Can they survive?' " recalls Mr. Gerzberg, Zoran's CEO.
Manufacturers cut deeply, then cut some more. Shipments of audio-visual products such as TVs and MP3 players fell 19% in November, 21% in December and 58% in January, the Consumer Electronics Association says. Zoran's fourth-quarter revenue fell 42%, the steepest drop since the company went public in 1995.
"There was a lot of guessing going on," says Mr. Pederson of Zoran. "Everybody under-bet to a certain extent."
The effects ricocheted across Asia. In Japan, the economy shrank at an annualized pace of 12.7% in the final three months of last year, the fastest drop in nearly 35 years.
In China, many of Zoran's factory customers furloughed their workers, says Mr. Gerzberg. In recent months, some 20 million Chinese migrant workers have lost their jobs.
Zoran doesn't actually make the chips it designs. Instead, it subcontracts with TSMC. Zoran slashed its chip orders -- as did many of TSMC's hundreds of other customers.
TSMC's chip factories fell quiet, says Rick Cassidy, head of North American operations. In December, its plants ran at an estimated 35% of capacity, the lowest in at least eight years, according to market researcher iSuppli Corp.
In subsequent months, TSMC asked around 20,000 of its workers to take as many as five days of unpaid leave a month. In January and February, TSMC said revenue fell 58% from a year earlier. And it said it will slash its 2009 purchases of factory equipment by some 20% from a year earlier. Across Taiwan, plunging demand for electronics led to record declines in Taiwanese industrial output.
"<span style='color:blue'>Usually the guy at the rearmost end suffers the most</span>," says Morris Chang, TSMC's chairman.
In Santa Clara, Calif., those cuts came as a rude shock at the offices of Applied Materials, which builds factory equipment used to etch circuits and bake chemicals onto semiconductors.
As recently as last summer, Applied's in-house economist, Mr. Bane, had expected second-half business to grow. Instead, it laid off 2,000 workers and asked all remaining 12,000 employees to take unpaid leaves.
Mr. Bane gives presentations on what's happening in the market to some of Applied's immediate suppliers -- including Mr. Grestoni, the owner of the California machine-tool shop who's had to lay off hundreds of his employees.
In fact, Applied is one of Mr. Grestoni's biggest customers. One of Mr. Grestoni's shops, D&H Manufacturing Co., won Applied Materials' supplier-excellence award for 2007 and 2008.
The downturn is brutalizing Mr. Grestoni's business. He's now sitting on a year's supply of some products, rather than the typical three months. "We've got millions of dollars of inventory we can't sell, and we're paying storage fees on it," he says.
One recent morning, Mr. Grestoni walked by empty rows and stilled machines at D&H. In one section stands six powerful milling machines in which sharp, whirling blades carve blocks of metal. Fifty people used to work there. Today, only one remains.
He paused by a pile of aluminum blocks, each roughly the size of a microwave oven. One has large round holes milled out of the center, for wafer-processing chambers. "In October, we get an order to do six of these," he says. Then, the customer delayed the order. "You're looking at 60 grand here."
Mr. Grestoni expects sales for his three machine shops this year to total less than $50 million, compared with $100 million in a typical year.
There are a few hopeful signs. Best Buy has seen improved sales. Zoran on April 28 said it expects business to pick up in coming months, even though first-quarter sales fell 37%. And TSMC ended its factory furloughs in April.
But Mr. Grestoni is still waiting. "We've probably hit the bottom," he says. "Now the question is, how long are we going to stay here."
source: <a href='http://online.wsj.com/article/SB124260855682928885.html' target='_blank'>http://online.wsj.com/article/SB1242608 ... 85.html</a>
* MAY 18, 2009
<span style='font-size:14pt;line-height:100%'>Clarity Is Missing Link in Supply Chain</span>
By PHRED DVORAK
For a man who sells the chip "brains" that power millions of TVs, cameras and other gadgets, Levy Gerzberg found himself surprisingly unplugged last fall. In just a few short weeks, business virtually stopped.
He still marvels at the speed of the collapse. "I think about it today, and ask, 'Why did it happen so fast?' " says Mr. Gerzberg, CEO of chip designer Zoran Corp.
The reason is now starting to become clear. <span style='color:blue'>The world's complex "just in time" manufacturing supply chains are making it increasingly tough for Zoran, and any other single link in the chain, to know what's going on just a few links away. </span>Sometimes, Zoran itself doesn't even know how its own chips are used: One batch it thought was destined for DVD players instead turned up in digital picture frames.
<span style='color:blue'>The recession has exposed a harsh side effect of the supply-chain system. Because modern industry rewards suppliers with the leanest inventories and fastest reaction times, when economic crisis struck, tech companies up and down the line contracted as sharply as possible in hopes of being the ones to survive.
Forced to guess at demand for their products in a plummeting market, everyone hit the brakes, hard. An examination of the electronics supply chain -- from retailers all the way back to makers of factory machinery -- shows that, at almost every stage, companies were flying blind as they cut.</span>
"We're still not sure what happened," says Angelo Grestoni, owner of a California machine shop that mills aluminum parts for chip-making machines. He is many steps away from Zoran on the chain, but his clients, too, evaporated around the same time. Today Mr. Grestoni employs 150 people, down from 600 just 18 months ago.
The cumulative result: The tech pullback may have been overdone. In March, Best Buy Co. said it could have sold more electronics equipment in the three months ended Feb. 28, but its suppliers' deep cuts made it tough to keep shelves stocked. Suppliers "all decided to build a lot less," says Best Buy merchandizing chief Michael Vitelli.
<span style='color:blue'>As the contraction raced down the supply chain, its effects became amplified.</span> Rick Tsai, CEO of chip manufacturer Taiwan Semiconductor Manufacturing Co., has said that, in last year's final quarter, <span style='color:blue'>consumer purchases of electronics gear in the U.S. fell 8% from the prior year. But product shipments fell 10%, and shipments of the chips that go into the gear dropped 20%.</span>
The speed of the cuts are a big change from previous economic slumps. As recently as the early 2000s, companies compiled orders only monthly or quarterly; now they often do it every week. Their quicker reflexes this time kept their inventories from swelling dangerously, as happened last time, supply-chain experts say.
This has consequences for economic recovery. Although U.S. gross domestic product fell 6.1%, on an annual basis, in the first quarter, nearly half of that was due to inventory reductions. Since consumer spending actually grew 2.2%, some factories might need to increase output, economists say.
Production is starting to snap back, at least a little. Taiwan Semiconductor, or TSMC, in March boosted first-quarter earnings, and Zoran last month reported a jump in forecast orders.
Still, "It's easier to turn the switch off than turn it back on," says David Pederson, Zoran's vice president of corporate marketing. Growth forecasts also get muddied because several of Zoran's customers may be optimistically competing for the same manufacturing contract, he says, and they can't all win it.
Zoran is the kind of niche firm spawned by the widely dispersed global tech industry: It designs specialized video- and audio-processing chips for products such as cameras, TVs and cellphones. Its customers are mainly little-known Asian companies -- rent-a-factories, basically -- that manufacture the world's gizmos on behalf of brand-name giants like Toshiba Corp.
<span style='color:blue'>Complexities in the global supply chain make it tough to divine broad market trends</span>, says Randy Bane, an economist for Applied Materials Inc., which makes factory equipment used to build chips like Zoran's. Applied Materials had a loss of $133 million in its fiscal first quarter and a loss of $255 million in the second quarter, ended April 26 -- its first quarterly losses since 2003. It told employees to take four weeks of unpaid leave in the first half of this year, something it's never done before.
Just a decade ago, the supply chain had far fewer links, Mr. Bane says. Chip sales were driven largely by personal computers, and just a handful of companies were bellwethers for the industry. Today, everything has a chip in it, dramatically multiplying the complexity. Behavior is "much more difficult to predict," he says.
At one end of the information flow are retailers such as Best Buy. For the U.S. market, it sends orders to its suppliers once a week, along with private forecasts for the coming 52 weeks, based on sales at its 1,000 U.S. stores and broader economic data. Manufacturers scrutinize reports like these to decide what parts they need to order.
<span style='color:blue'>The system is geared to respond quickly to changes in consumer behavior. But that puts risk on suppliers' shoulders.</span>
Take DVD players: Best Buy orders them about six weeks before it wants them on shelves. However, a player's guts may take twice that long to make -- forcing gadget makers and their suppliers further down the chain to guess at demand for the various pieces.
Companies all along the supply chain live in mortal fear of piling up inventory. Profit margins are razor thin, and unsold inventory only loses value as newer technologies hit the market.
Last fall, as the financial crisis struck Wall Street in full force, shoppers at Best Buy became an endangered species. By early October -- the deadline to place orders for the all-important Thanksgiving shopping season -- Mr. Vitelli, the merchandising chief, abandoned Best Buy's prior forecasts and slashed orders to electronics giants such as Japan's Toshiba and South Korea's Samsung Electronics Co.
Demand was shrinking so rapidly, he says, he wasn't even sure how deeply to cut. "You actually had to pick a number with no knowledge whatsoever, because nobody knows anything," he recalls. For the three months ended Nov. 29, Best Buy's net income fell 77%.
If Best Buy felt ambushed, its suppliers had even less insight into consumer demand. The slashing began.
Two or three links down the chain, chip designer Zoran quickly felt the pain. Even before last fall's crisis hit, Zoran's customers were getting nervous, executives say. When Best Buy and other retailers cut their orders in October, it turned into a rout.
"Everyone was looking at others, asking, 'How much money do they have? Can they survive?' " recalls Mr. Gerzberg, Zoran's CEO.
Manufacturers cut deeply, then cut some more. Shipments of audio-visual products such as TVs and MP3 players fell 19% in November, 21% in December and 58% in January, the Consumer Electronics Association says. Zoran's fourth-quarter revenue fell 42%, the steepest drop since the company went public in 1995.
"There was a lot of guessing going on," says Mr. Pederson of Zoran. "Everybody under-bet to a certain extent."
The effects ricocheted across Asia. In Japan, the economy shrank at an annualized pace of 12.7% in the final three months of last year, the fastest drop in nearly 35 years.
In China, many of Zoran's factory customers furloughed their workers, says Mr. Gerzberg. In recent months, some 20 million Chinese migrant workers have lost their jobs.
Zoran doesn't actually make the chips it designs. Instead, it subcontracts with TSMC. Zoran slashed its chip orders -- as did many of TSMC's hundreds of other customers.
TSMC's chip factories fell quiet, says Rick Cassidy, head of North American operations. In December, its plants ran at an estimated 35% of capacity, the lowest in at least eight years, according to market researcher iSuppli Corp.
In subsequent months, TSMC asked around 20,000 of its workers to take as many as five days of unpaid leave a month. In January and February, TSMC said revenue fell 58% from a year earlier. And it said it will slash its 2009 purchases of factory equipment by some 20% from a year earlier. Across Taiwan, plunging demand for electronics led to record declines in Taiwanese industrial output.
"<span style='color:blue'>Usually the guy at the rearmost end suffers the most</span>," says Morris Chang, TSMC's chairman.
In Santa Clara, Calif., those cuts came as a rude shock at the offices of Applied Materials, which builds factory equipment used to etch circuits and bake chemicals onto semiconductors.
As recently as last summer, Applied's in-house economist, Mr. Bane, had expected second-half business to grow. Instead, it laid off 2,000 workers and asked all remaining 12,000 employees to take unpaid leaves.
Mr. Bane gives presentations on what's happening in the market to some of Applied's immediate suppliers -- including Mr. Grestoni, the owner of the California machine-tool shop who's had to lay off hundreds of his employees.
In fact, Applied is one of Mr. Grestoni's biggest customers. One of Mr. Grestoni's shops, D&H Manufacturing Co., won Applied Materials' supplier-excellence award for 2007 and 2008.
The downturn is brutalizing Mr. Grestoni's business. He's now sitting on a year's supply of some products, rather than the typical three months. "We've got millions of dollars of inventory we can't sell, and we're paying storage fees on it," he says.
One recent morning, Mr. Grestoni walked by empty rows and stilled machines at D&H. In one section stands six powerful milling machines in which sharp, whirling blades carve blocks of metal. Fifty people used to work there. Today, only one remains.
He paused by a pile of aluminum blocks, each roughly the size of a microwave oven. One has large round holes milled out of the center, for wafer-processing chambers. "In October, we get an order to do six of these," he says. Then, the customer delayed the order. "You're looking at 60 grand here."
Mr. Grestoni expects sales for his three machine shops this year to total less than $50 million, compared with $100 million in a typical year.
There are a few hopeful signs. Best Buy has seen improved sales. Zoran on April 28 said it expects business to pick up in coming months, even though first-quarter sales fell 37%. And TSMC ended its factory furloughs in April.
But Mr. Grestoni is still waiting. "We've probably hit the bottom," he says. "Now the question is, how long are we going to stay here."
source: <a href='http://online.wsj.com/article/SB124260855682928885.html' target='_blank'>http://online.wsj.com/article/SB1242608 ... 85.html</a>