The Importance of Demand Management in the Semiconductor Industry

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In the semiconductor industry, there’s a lot that happens between when a product is being built and when the end customer receives the product. And very often, that end customer is not the “customer” listed on the sales order. Sales may be through distributors - either a sell-to or sell-through model - or through a contract manufacturer, an EMS Solution, vendor-managed inventory hubs, etc.

Below is an illustration of all the front-end processes for a the semiconductor value chain, the OSAT and the back-end processes along with the end-customer. Any one of the options on the right could be a customer. Or, they could simply be an intermediary option – a “customer” in terms of moving the product from the manufacturer to who actually ends up with it.

Semiconductor Value Chain

It’s been Tensoft’s experience in IoT space that the value chain is often even longer, and may have 4-5 steps between when the product is completed and the end customer demand signals. These additional steps - along with the fact that the end customer is not always the customer on the sales order - can create a number of challenges for these businesses. And these challenges may affect pricing, shipping management, forecasting and demand planning, revenue, part numbering, and distributor processes. (For an in-depth discussion on this, read this blog post.)

Tensoft hosted a webcast on "How to Manage Demand in a Distribution-based Model." Part of this presentation focuses on Tensoft’s solution to effectively manage demand for the entire semiconductor value chain, Tensoft DemandOps. To watch the recording, click here.

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