Success story
ON Semiconductor
Industry• Semiconductors

Solution• OpenText™ B2B Managed Services

Semiconductor supplier sharpens
competitive edge

ON Semiconductor reduces supply chain costs, meets customer needfor seamless exchange with OpenText B2B Managed Services
Results
Reduce supply chaintransaction costs
Increase capacity tosuccessfully address fluctuatingtransaction volumes
Cost-effectively and quickly adopt
new industry-standard technologies
Increase the company’s share ofcustomers’ purchases“Many customers are looking to take out complexity andcost, and speed up their supply chain. OpenText helps us tobe responsive to their desires and requirements to increase
the amount of electronic data interchange, thus enabling
frictionless business transactions. That’s a big part of our plan
to earn a greater share of our customers’ semiconductor wallet.”David Wagner

CIO
ON Semiconductor

Semiconductor supplier sharpens competitive edge

With its global logistics network and strong portfolio of power
semiconductor devices, ON Semiconductor is a preferred supplierof power solutions. The company’s development and manufacturing
centers span the globe and employ more than 22,000 people worldwide.

Competitive market, disparate protocols

Many customers think of power semiconductor devices as commodities.
Although ON Semiconductor strongly disagrees with that view, it isfrequently the perception under which the company must operate.
Consequently, to win a larger share of the market while avoiding a pricing
race to the bottom, ON Semiconductor must find other ways to differentiate itself. ON Semiconductor believes that it can achieve a competitive
advantage by improving the ease, quality, speed and processing costs ofthe transactions—purchase orders, shipping notices, acknowledgements,invoices, etc.—that it exchanges with its customers. Enhanced electronic
data interchange was an obvious path to achieving these objectives.

With most of ON Semiconductor customers already using electronic
communications of some sort to interact with their suppliers, there wasno consistency or standardization. Different customers used different
technologies and protocols such as electronic data interchange (EDI)
and application-to-application interfaces.

In fact, an ON Semiconductor survey conducted found that eachcustomer employs an average of 2.9 different connectivity options. The
survey showed EDI as the most used business-to-business connectivity
standard today, with 73 percent of respondents employing it. Moreover,the use of the RosettaNet protocol is particularly strong in Europe,
which requires further support to gain market share in those regions.

In addition to supporting that one protocol, the company wanted to beable to offer customers a portfolio of EDI options that would support not
only the technologies in use today, but also those that would come on
stream in the future.

Developing numerous protocol capabilities in-house would require a verylarge upfront investment in hardware, software and skills. Because ofthis, ON Semiconductor opted to use OpenText B2B Managed Services
instead of building out the protocol capabilities inhouse.
TMSeamless data exchangeWith B2B Managed Services, an experienced team of specialists
using best-in-class methodologies has access to a state-of-the-art
network and hosting infrastructure. The result is seamless dataexchange and transformation between business partners of all sizes
and technological sophistication.
OpenText acts as the intermediary between ON Semiconductor and itstrading partners in both EDI and RosettaNet environments, running overa variety of communications infrastructures, including transmitting dataover the EDI network. In addition, the platform automatically matches
related transactions and monitors transaction traffic, automaticallyalerting ON Semiconductor in the event of any errors or exception
conditions and helping customers to join the trading network.
While owning, managing and maintaining all of the hardware and softwarenecessary to run the VAN, OpenText also monitors the infrastructure andprotects it with a comprehensive high availability solution to provide
near 100 percent uptime.
Once ON Semiconductor and one of its customers come to an agreement on what data they are going to exchange and how they are going“OpenText helps us stay
current with our trading
partners’ technologies,
which is important to us.”Todd Johnson

IT Applications Director
ON Semiconductor

Semiconductor supplier sharpens competitive edge

to exchange it, the company uses B2B Managed Services to ensure
protocols and standards set up in the EDI or RosettaNet environments
are harmonious, allowing the companies to successfully interact.

amount of electronic data interchange, thus enabling frictionlessbusiness transactions. That’s a big part of our plan to earn a greater
share of our customers’ semiconductor wallet,” he explained.

After the setup is complete, the parties on both sides of the supply
chain—ON Semiconductor and its customers—interact through a single
hub. Each company can use a protocol and communication technologyof their choosing as the VAN takes care of all of the transmission andtranslation necessary to exchange data and transactions between theparties. Consequently, ON Semiconductor manages only one interface,rather than having to connect individually to 500 different customers.

“What we’re getting as a result of our relationship with OpenText isthe ability to scale our costs more appropriately as we go rather thanhaving to make a large investment to build our own infrastructure
to handle the new standards,” added Wagner. “We’ve come up with aplan that allows us to look at RosettaNet and address these costs ina much more incremental and palatable way.”

Because OpenText maintains sufficient excess capacity to serve its
large customer base, ON Semiconductor can immediately scale up or
down its traffic through the VAN as required. Furthermore, the company
pays for usage rather than incurring a large up-front cost and ongoing
fixed expenses to build and maintain the infrastructure and staff thatwould be required to facilitate peak transaction flows across a growing
customer base.
OpenText provides around-the-clock monitoring and service for the VAN,
ensuring that ON Semiconductor and its customers can get support
whenever they need it. This support capability would have been costly tomaintain in-house, as ON Semiconductor’s diverse customers operate intime zones spanning the globe and some of them run 24/7 operations.

Frictionless transactions, competitive edge

According to David Wagner, CIO at ON Semiconductor, customers are
their key area of focus. “Many customers are looking to take out complexity and cost and speed up their supply chain. OpenText helps us
to be responsive to their desires and requirements to increase theReady-made, on-demand expertise is another major benefit that ON
Semiconductor receives from B2B Managed Services. According toTodd Johnson, IT applications director at ON Semiconductor, “OpenText
helps us stay current with our trading partner’s technologies, which
is important to us. It helps us migrate quickly into the leading–edge
technologies such as RosettaNet. Having OpenText as a managed
services partner makes it very easy to deal with those scenarios.”

About OpenText“The team from OpenText has worked with us in a creative andsolution-oriented fashion to help us deliver better solutions to ourkey customers. This allows us to differentiate ourselves from ourcompetitors and position ourselves to earn a bigger componentof our customers’ semiconductor business. We look forward tocontinuing to drive this capability. The thing that is very positive
for us is that we are working with a partner who is helping us tomeet our goals, while allowing us to scale our costs appropriately,”concluded Wagner.

Customer stories

OpenText, The Information Company,
enables organizations to gain insight
through market leading information
management solutions, on-premises orin the cloud. For more information about
OpenText (NASDAQ: OTEX, TSX: OTEX)
visit opentext.com.

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