As a leading designer and developer of semiconductor products across multiple industries, Exar Corporation knows the value of being connected. Customers need to know that the products they purchase through Exar are in good hands every step of the way, and that responsibility falls on Vice President of Supply Chain Management Dan Wark. “Everything from when the orders get in to the amount of inventory that we’re building every day to when we make shipments, I’m responsible for all of that,” Wark explains.
It’s a responsibility Wark doesn’t take lightly, as would be expected when one considers the scope of Exar’s supply chain operations. The company sources semiconductor products from manufacturers around the world and distributes them to more than 10,000 customers in the Americas, Europe, the Middle East, Asia and Africa. Wark says the company’s supply chain operations cover every step of the way from procurement through customer service for the product after it reaches the customer.
Wark brought a lot of experience to Exar when he joined the company in early 2012. He has been involved in the semiconductor industry since 1978, and his experience ranges from packing boxes and filling orders himself to managing procurement and warehousing for large-scale operations.
Exar specializes in the design, development and marketing of high-performance semiconductor products that are used in applications ranging from power management and connectivity to data storage and networking. Exar outsources all of its manufacturing to partners around the world, primarily in Asia.
Streamlining the Chain
Although the competition is strong in the semiconductor market, Wark says Exar Corporation holds several key advantages in its supply chain operations that make it a preferred partner for customers around the world. For example, on the customer-facing side of the business, Exar has excellent channel distribution, with distribution networks that cover most of Asia and Europe and allow fast, efficient delivery of products to customers.
Wark says another significant advantage for Exar is the use of Oracle software platforms throughout its operations. With a strong IT foundation in place, he explains, Exar can leverage its technological advantage into stronger efficiencies from an operations planning perspective.
On the manufacturing side of Exar’s supply chain operations, Wark says his focus since joining the company has been on consolidating and realigning the supply chain. The goal has been to increase the company’s purchasing power and better align with its strategy going forward. In the past, Wark says, Exar might have had two or three suppliers that provided identical services, but now its focus is on reallocating orders to fewer suppliers to give Exar greater purchasing power from each supplier.
Wark points to another example of how the company has made strides recently to consolidate its operations. Previously, the company had brought products made in Asia to California for testing, where they would need to be warehoused before they were tested and then shipped out to mostly Asian markets. By relocating those operations entirely to Asia, Exar avoids the need to warehouse so many products and reduces shipping costs.
Wark describes the company’s current initiatives in its supply chain operations as a process of continuous improvement, but one in which many of the most significant changes will be completed in the coming year. One of the biggest changes Exar is working on is to replace the gold in its products with copper-based materials. Wark says this will reduce costs and make sourcing easier for the company.
Exar also is grappling with how to support some of its products with extremely long lifecycles. With ongoing consolidation of the supply chain, Wark says, it may not make sense for the company to continue to maintain those products because of the additional time and resources they require. He says the company is considering what to do in those cases because it does not want to damage its ability to grow its topline revenue.
In the immediate future, Wark says that the relative maturity of the semiconductor industry will lead to more changes through mergers and acquisitions rather than through start-ups and technological advancements. He says Exar expects to go through substantial organic growth as well as growth through acquisitions. Whatever the future holds for Exar, Wark says the company will continue to hold true to the principles and commitment to a first-rate supply chain that have brought it to where it is today.