2005 Supply & Demand Chain 100 Case Study  Sun Microsystems / Servigistics

Profiles in Supply Chain Enablement: Tech giant pursues service excellence and streamlines its global service parts network for optimal operating performance

Profiles in Supply Chain Enablement: Tech giant pursues service excellence and streamlines its global service parts network for optimal operating performance

Company: Sun Microsystems (Santa Clara, CA)
Company Size: Large
Company Sector: Computers/Electronics
Area(s) of Enablement: Sourcing, Procurement, Fulfillment/Logistics, Product Lifecycle Management, Supply Chain Integration & Infrastructure, Decision Support
Enabler: Servigistics (Atlanta, GA)

SDCE 100 2005Case Study: Since its inception in 1982 Sun Microsystems has become the leading global supplier of network computing solutions. Sun's world-class services organization supports that success by consistently delivering high-availability service for their enterprise-class users.

The Challenge

The exponential growth Sun experienced during the 1990s caused the company to overstock service parts in order to achieve its service level agreement (SLA) commitments. Although Sun had grown to a large global organization, the company managed its service inventory locally through four separate geographies, operating independently on a variety of legacy transaction and planning systems.

Sun's executive management recognized the need to improve the company's operational efficiency globally while reducing inventory and maintaining high service levels. Sun executives mandated that the service team improve the service parts operations by implementing a standard service parts management system around the globe.

With their charge in hand, Sun's service team determined that the current "first-generation" service parts planning solution was not designed to manage a global service parts network and set off to find a system that could meet the company's evolving needs. Sun required a solution that could integrate its service parts processes globally while still maintaining regional flexibility. The challenge was to find a solution and solution provider that could integrate the company's existing systems, meet Sun's strict Six Sigma requirements and deliver global service parts management capabilities all at the same time.

Sun required a solution that could:

  • Meet all SLAs;

  • Help align the global service organization and operate on a single global instance system and leverage global economies of scale;

  • Enable flexible configuration;

  • Automate day-to-day processes to streamline operations;

  • Optimize inventory investment across all locations (central and field) based on desired service objectives;

  • Reduce part obsolescence;

  • Reduce orphaned part revisions through true complex parts chaining;

  • Ensure profitable service contracts through installed base and service contract planning;

  • Run on Sun technology.
The Solution

Ultimately, Sun's team selected Servigistics Planning solution, version 7.7, to address the company's global service parts management challenges. The implementation included integration with Oracle and multiple transaction systems. Sun completed implementation of the Servigistics solution in just under 25 weeks, with a total project budget of $5-$6 million.

By replacing their "first-generation" service part solutions with Servigistics, Sun has already experienced a return on investment of five times its original investment, with what Sun calls ROSS (Return on Sun Sigma). Three months following the global implementation, Sun measured $30 million ROSS and achieved ROSS of over $40 million after 12 months. Sun continues to track and measure ROSS for this project and expects it to reach $100 million in year three of the project.

Consistently delivering high quality performance results, Servigistics' solution enabled Sun to improve the company's already high standards of service excellence and streamline its global service parts network for optimal operating performance. In fact, in recognition of the value that the Servigistics solution delivered, Sun awarded the solution provider a Meritorious Supplier Award, which honors achievements in the areas of supplier cost effectiveness, quality, availability and technology.

Sun now uses Servigistics Lifecycle module to plan global last-time-buy or end-of-life processes as well as new product introduction and the associated seed stock requirements. The company was evaluating other Servigistics modules, such as a service optimization engine, which balances inventory between echelons and product items, and sourcing, which manages the buying process and vendor performance.

For more stories of successful supply chain implementations, read the "2005 Supply & Demand Chain Executive 100" article in the June/July 2005 issue of the magazine. Also watch the Today's Headlines section of SDCExec.com every Tuesday and Thursday for more in depth best practices drawn from this year's Supply & Demand Chain Executive 100.