Case Study Summary
Pulse Electronics, a Technitrol company and global leader in electronic component manufacturing, operates design centers, manufacturing facilities, and customer care operations across the Far East, North America, and Europe. The company faced significant challenges coordinating supply chain operations across multiple time zones, managing inventory in global distribution centers, and providing accurate delivery commitments to customers. By implementing Eyelit Technologies’ integrated supply chain management system with 850 EDI demand links and real-time collaborative planning capabilities, Pulse transformed their global operations. The solution delivered improved order promising accuracy, reduced pipeline inventory, shortened planning cycle times, and enhanced visibility across their extended enterprise network.
Pulse – The Essential Component Manufacturer
In March 2002, Intel recognized Pulse as a repeat winner of its prestigious “Supplier Continuous Quality Improvement Award” for outstanding commitment to quality and performance, and services deemed essential to Intel’s success.
Pulse components are commonly found in all the IT and communication products that have become part of our lives. And, in fact, without those components, today’s computers, networks, wireless phones and other information/communication technologies simply would not operate.
Pulse, a Technitrol company, is a global leader in the design and manufacture of products that mount onto printed circuit boards — along with microprocessors, integrated circuits and other elements — to regulate a signal’s intensity, rate of flow, timing and electromagnetic interference. Its magnetic components and modules meet the needs of every household-name manufacturer in the IT, power conversion and communications industries.
On an annual basis, Pulse registers some 2,000 new designs, produces hundreds of new products and refines hundreds of existing products with new innovations. It has design centers, manufacturing facilities and customer care operations in the Far East, North America and Europe. This extended enterprise environment resulted in Pulse seeking to adopt a global supply chain management strategy, integrated with demand planning and manufacturing operations. The benefits, Pulse reasoned, would include faster response time to orders, lower inventory costs and more intelligent planning and scheduling.
Key Objectives
In its request for proposals (RFP) from possible vendors, Pulse identified the following key objectives:
Improve customer service through improved order promising accuracy
Reduce total pipeline inventory
Provide Internet visibility into global supply chain planning, forecasting and manufacturing execution operations
Provide on-line problem notification and resolution tools
Shrink cycle times for planning and re-planning
Shorten calculation times for delivery date quotations to customers
The Solution Selection
Pulse cited: Eyelit Technologies’s ability to model extremely complex supply chain environments; aggregate data from multiple sites; enable collaborative planning with suppliers, subcontractors and other stakeholders; and its willingness to partner with Pulse to ensure the system would meet other unique requirements.
Further, since Pulse, like other Technitrol companies, was rapidly growing by acquisition the supply chain solution had to be massively scalable. Eyelit Technologies was designed for scalability and integration with any data source, to meet the needs of a heterogeneous marketplace.
Global Operations Challenges
Pulse’s largest volume manufacturing facilities are located in China, separated by nine time zones from the company’s head office in San Diego, CA. Manual collaboration with a scheduler located 16 hours in the future is, simply, not possible. Schedules, capacity, on-hand inventory and local Manufacturing Execution system (MES) data needed to be extracted and integrated with the planning side, to provide more accurate capable-to-promise (CTP) dates to customers, up-to-date requirements for subcontractors and suppliers, and to identify the most profitable production scenarios for Pulse. Eyelit Technologies enabled all internal stakeholders to work from the same plan.
Pulse distributes many of its products directly to customers. It also has two major distribution centers (DCs) — one in the US, the other in Europe. Every effort is made to minimize inventory at these DCs, by shortening production cycles and integrating demand information with Eyelit Technologies’s planning system.
EDI Integration and Communication
Some 850 EDI demand links have been established, resulting in an average of 150 demand feeds per week, through a secure virtual network. On the supply chain back end, Pulse will be using the system to automatically communicate demand requirements directly from production plans.
Both new demand and changes to existing requirements will be transmitted as they occur, reducing the cycle time of communication to a matter of seconds. Further, buyers and suppliers, working off of the same data, will be able to better manage exceptions and maintain inventory targets.
Industry Challenges and Requirements
In electronic component and module manufacturing, responsiveness and flexibility are critical factors. A product’s lifecycle can be shorter than its development cycle, meaning its break-even point has to be quantified, reached and taken into account when compiling forecasts.
Collaborative planning, based on the most accurate and up-to-date information on the demand side, supply side and execution side has become a critical business issue. Manufacturers, such as Pulse, that have integrated Eyelit Technologies solutions to rapidly deal with these issues are more efficient, more responsive to changing market conditions, and better positioned for growth.
Company Growth Through Acquisitions
Since Technitrol acquired Pulse in 1995, it has assisted the company increasing market share with the subsequent acquisition of multiple related companies and technologies. For example, two additional acquisitions — Nortel Networks magnetic components business in 1997 and FEE Technology, S.A. in 1998 — made Pulse a global leader in telecommunications and power conversion magnetics. The 1998 acquisition of Valor Electronics (GTI Corporation) solidified Pulse’s market leadership in magnetic components for enterprise networking equipment.
In October 2000, Pulse acquired various assets of EWC, a manufacturer of magnetic components primarily for the defense and aerospace industries. Pulse also acquired Electro Componentes Mexicana (Grupo ECM), a manufacturer of inductive components primarily for automotive applications, in March 2001. And Carlsbad, California-based Excelsus, a leading North American producer of customer-premises digital subscriber line filters and other broadband accessories, was acquired in August 2001.
Pulse Acquisitions Timeline
1995: Technitrol acquired Pulse. It has assisted the company increasing market share with the subsequent acquisition of multiple related companies and technologies.
1997: Nortel Networks (Magnetic components business)
1998: FEE Technology, S.A. (Telecommunications and power conversion magnetics) and Valor Electronics (Magnetic components for enterprise networking equipment)
October 2000: EWC (Manufacturer of magnetic components)
March 2001: Electro Componentes Mexicana (Manufacturer of inductive components)
August 2001: Excelsus (Producer of customer-premises digital subscriber line filters and other broadband accessories)
Future Growth and Scalability
Pulse’s current research and development efforts are focused on growth opportunities in high-speed networking, customer premises broadband equipment, wireless communications, Internet telephony, automotive controls and military/aerospace electronics.
This will result in an increased product offering, expanded and diversified manufacturing operations, new customer and supplier relationships and greater volumes of data to model. The scalability of Eyelit Technologies’s solution is such that new data sources can be added and higher volumes of data processed in a matter of weeks.
Market Position and Competitive Pressures
Pulse serves a market that touches each and every person in the industrialized world. Its magnetic components and modules are critical to the functionality of all IT and networking/communication products. The price point of those finished products has been under attack by competitive forces and product lifecycles are shorter than ever, requiring component suppliers, such as Pulse, to accelerate operations and drive cost from all areas, including the supply chain.
Conclusion
Pulse chose Eyelit Technologies as its supply chain solution provider to enable collaborative planning across a global enterprise to deliver a higher return on manufacturing assets with faster, more efficient operations.
Further, Pulse is ready to integrate data sources from newly acquired companies, customers and suppliers, regardless of the systems and platforms they may be running. With Eyelit Technologies, Pulse has further demonstrated its commitment to the success of its own customers, which is exactly what you’d expect from a company honored by Intel with the “Supplier Continuous Quality Improvement Award.”