hillik rave, evp operations & engineering

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Feb. 2008

Hillik Rave, EVP Operations & Engineering

Supply Chain past, present and future

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Ceragon story….

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Company Profile

Ceragon Networks Ltd. is a leading provider of high-capacity

Ethernet and TDM wireless backhaul solutions.

These solutions are designed to deliver voice and data

services.

The main driver of Ceragon's business is its modular FibeAir®

product family, a cutting-edge, high-capacity solution for

wireless backhaul transport of broadband services over IP and

SONET/SDH networks.

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Ceragon Strategy – running fast on two feet

Time Time 2006 2008 2010 2012

Sales Sales

Core-SDHNew-IP

Ceragon's Sales

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Operations mission

Execute the customers’ delivery requirements

while meeting Operations’ targets in:

Quantity, Time, Cost, and Quality.

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Qty (Links)

0

20, 000

40, 000

60, 000

80, 000

100, 000

120, 000

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Links

Start up

Global

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Delivery L.T. (days)

2006

0

10

20

30

40

50

60

70

80

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

2007

8

Cost ($ per link)

Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q2 08 Q3 08 Q4 08

2007 2008

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RMA Ratio (%)

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Supply-Chain Management: Past, Present and Future

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Supply chain has evolved in stages from a set of disparate

disciplines a generation ago into an entirely different entity with

broad scope and strategic function.

A generation ago, it was defined as customer service, traffic

management, and warehousing - each function standing alone.

From there it evolved into Physical Distribution, expanded into

Logistics, morphed into Integrated Logistics and then blossomed

into Supply Chain Management.

Supply Chain - Past

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Most recently, Supply Chain Management evolved into Supply

Network Management, reflecting the web-based integration and two-

way communication that is becoming dominant today.

Supply Chain - Present

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The evolution continues today as several major forces reshape Supply

Network Management

Vast growth in global sourcing.

Nature disasters continues raising havoc with transportation.

Energy and oil pricing – manufacturing / suppliers closer to customers.

Shift of economic and military power toward China, India and Russia.

Developed countries getting older and developing countries getting younger.

Post 9/11, the importance of security.

Customs and Border Protection.

The supply chain isn’t what it used to be and never will be again.

Supply Chain - Present

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Global competition, outsourcing and poor visibility — have

increased supply-and-demand risks.

Tremendous need to transform static supply chains into

dynamic one to boost their operational responsiveness.

lack of trust and coordination, and inability to allocate profits

fairly.

Many supply chain partners have conflicting goals and

objectives.

Solutions need to be explored in order to align those goals and

objectives, perhaps in the form of incentives and contracts for

the benefit of all members of the chain.

What are the current supply networks drivers?

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Why are today’s supply networks inefficient?

Supply chains are not well integrated.

Production cannot access real-time purchasing information.

Up-to-date parts and component information is not available.

Frequent supply shortages occur because of machine breakdowns

or transportation hazards.

Short product life cycles result in high demand variability and poor

forecasting.

Complexities are present due to globalization and outsourcing.

High levels of inventories result from unforeseen events and poor

visibility.

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New management concept ―global collaboration ‖.

global perspective, security needs, stormy disruptions, collaborative

planning and more advanced business processes and systems.

A global trading company doing business in many countries, and

each country has its own information requirements, with different

formats, communication technology, compliance requirements, etc.

best practices and data integration has never been greater—and

never more visible in the executive suite.

Supply chain - future

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The future will see the emergence of many-to-many connections

between trading partners in supply chain networks, resulting in

a challenging environment for business,

As for technology, the Internet will bring about the creation of

information models that will enable supply chain professionals

to "see everything at one time."

Companies that are not among the leaders of the next version

of supply chain / network management will have lower

performance that impacts the consumer, trading partners,

finance, sales, marketing, supply chain, customer service—and

the bottom line!

Supply chain - future

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Ceragon future Models

Hubs, consolidation & order management center

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Global shipments – concept

SO

Order

Managemen

t CenterW

H

Hu

b Virt

W

HHu

bVirt

WH Hu

b

Virt

Customers

Customers

Customers

Subcontractor

Flex

Suppliers

Suppliers

Suppliers

Suppliers

Subcontractor

Remec

Customers

Ceragon

MF

G

APAC

Europe

Israel

USA

ECI, Kaitec

Filtel, UMTI

Xian Putian

Andrew, RFS

Nokia, Sagem, Saf

WH = Local WH

Hub = Gate way

WH Hu

b

Virt

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Control Tower ->Hubs –>Consolidation ->Drop shipments

End Customers

Information Flow

Physical Flow

USA Hub APAC Hub EUROPE Hub

Order Management

Center

ISRAEL Hub

EUROPESingapore Consolidation

Hub

Ceragon order

fulfillment

Drop shipment

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Ceragon IT systems planned to support future growth

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IT Future Model:

2008 – Operations IT systems

ERP System – MFG

Demand Planning Supply Planning Shipments

Collaboration - JDA

Subcontractors / Suppliers Customers

Order fulfillment Center Production trees - PDM BI

Sales force Quality Forwarders

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Demand Planning

Sales

Demand

Shaping

Baseline

Forecast

Customer Driven, Adaptive Forecasts

Customer

Withdrawals

Segmented Shipments or

Orders

Initial Demand

Plan

Sales Patterns

Customer

Orders

Sense & Respond

Adjusted

Demand Plan

Demand

Decomposition

Demand

Classification

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Supply planning & collaboration

Demand Supply Chain

NetworkConstraints

DemandForecasting

SupplySources

Process Control

Infrastructureand

History Data

DemandSupply Gap

Closure Optimization

Exception analysisWHAT IF

Update of Actual

Performance(Daily)

Marketing Information

&Parameters

InventoryReplenishment

Decisions

PO

WE

RE

D

BY

M

F

G

P

R

OP

OW

ER

ED

BY

PO

WE

RE

D

BY

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Global shipping System

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Thank you