So what does it take to deliver superior customer experience? These include the ability to anticipate customers' needs in advance, the ability to keep promises and the flexibility to accommodate changing customer needs, rapidly.

Clearly, this is easier said than done. Look a little deeper and you will find that truly successful semiconductor companies excel at leveraging their supply chains in delivering superior customer experience.

At the very core, successful companies have invested efforts in mastering the fundamental building blocks of supply chain management: effective demand and supply management.

Following the economic slowdown in late 2008, an i2 Technologies-led analysis of 42 small-to-midsize fabless semiconductor companies revealed an interesting insight. In reaction to the downturn, some companies slammed the brakes too hard; others simply couldn't slow down fast enough.

Unable to comprehend changes in demand or transmit changes rapidly across the subcontracted supply chain, half of these companies saw a dramatic shift in their normalized inventory profiles.

As a result, these companies are either struggling with large amounts of capital tied in investments—not to mention higher risk of obsolescence—or are desperately scrambling to keep pace with customer orders, losing the opportunity to gain share.

Here are six suggestions for semiconductor companies that are looking to improve their demand and supply management processes during the current market downturn:

1. Focus on the products driving growth

Are you spreading your human capital too thin?

Forecasting customer demand, especially under changing macroeconomic conditions, can be a frustrating experience. Nevertheless, as long as customers' lead time expectations are shorter than manufacturing cycle times, demand forecasting is an unavoidable reality for semiconductor companies.

The key to maximizing returns on the forecasting process is to create the right focus. As we all know, not all parts are created equal. Twenty percent of the parts at many semiconductor companies drive 80 percent of unit volumes and revenues.

Companies should therefore segment the customer-product portfolio to focus higher human intelligence on the critical few while automating the rest using advanced planning solutions. Also, it is advisable to utilize exception reports to detect significant deviations between forecast and actual demand quantities while attending to outliers thereafter.

Leading semiconductor companies are able to segment their demand portfolios on a quarterly basis and utilize rules-based forecasting techniques to minimize drudge work.

2. Develop a system for speedy response

Are you fast enough?

A common lament across operations is the business units' or sales' ability to predict demand accurately. However, successful companies, even as they drive continuous improvement across their forecasting processes, alleviate the impact of forecast errors by focusing on speed.

Their supply chain processes are designed to capture changes in market demand as quickly as possible and then rapidly re-synchronize supply across the entire supply chain. Just a few years ago, it was acceptable to create a global supply-demand match on a weekly basis.

That is no longer the case because daily synchronization of demand and supply and rapid what-if analyses are becoming the norm. Leading companies use advanced planning systems to virtually eliminate all manual effort in creating updated plans that keep supply across front- and back-end manufacturing in tune with the latest view of demand.

3. Align your supply chain goals and processes

Are your people on the same page?

Yes, we know that customer demand is not reliable. But at any given point in time, do people in sales, product marketing, finance and operations all know the latest view of demand that is driving your supply chain? Or are you struggling with multiple versions of the 'truth' floating around the company in disconnected spreadsheets?

Eliminating islands of demand analysis and facilitating a single, easily-accessible repository for enterprise demand data alone can yield tremendous business benefits. Make that a priority for your company.

For historical reasons, front-end wafer planning has been separate from back-end assembly and test planning across many semiconductor supply chains. The die bank has long acted as the decoupling point in the supply chain.

Misalignments created by sequential wafer and assembly-test planning result in growing inventory in the die bank. Integrated end-to-end planning from wafers to finished goods is a prerequisite to keep operations team members in alignment with each other and their internal customers.

4. Establish a good measurements plan

Do you keep a supply chain scorecard, really?

What you can't measure, you can't improve. Well known as that is, it's remarkable how many companies struggle to keep a reliable and concise scorecard on supply chain performance.

To be successful in optimizing the supply chain, you need to set aggressive but realistic goals and measure forecast accuracy by comparing actual orders with forecast projections a manufacturing-cycle-time ahead. Also, compare delivery date performance to customer request dates and measure days-of-inventory in the supply pipeline.

Make these measurements visible and develop process playbooks in advance to respond to deviations and cut down the constant fire-fighting.

5. Create a system of continuous learning

Do your measurements drive blame or learning?

Most practitioners would agree that the supply chain journey is critically more important than the destination, for the destination might change as businesses evolve and we correct course accordingly. To motivate your team to start on a challenging path and then stay on it, make sure the journey is enjoyable.

Human beings are naturally curious and eager to learn. Along with driving clear accountability, supply chain measurements should also emphasize plan-do-check-act based learning cycles.

What do you do with forecast accuracy, or customer request date delivery performance measurements? Hopefully, these are followed by systematic root cause analyses, focusing on the critical few rather than the trivial many, and concrete action items based on that learning.

6. Simplicity is key to achieving objectives

Has complexity obscured clarity?

The semiconductor supply chain is arguably one of the most complex supply chains in the economy and the complexity often grows exponentially as a company continues to grow, making manual processes inefficient and infeasible.

What have you done to keep supply chain management simple, even when complexity continues to grow? Early in their growth cycles, leading semiconductor companies wisely invested in decision support capabilities to help simplify processes and the day-to-day lives of its supply chain personnel. What is simple gets understood; what gets understood gets done, quickly without compromising speed.

With recent advances in IT technology, advanced demand and supply planning solutions that were once deemed expensive and in the domain of large companies, are now affordable and available on-demand. Find out more about what's new, for complexity and clarity are not mutually exclusive.

"If winter comes, can spring be far behind?" reminds the poet Shelley. The good news about semiconductor cycles is that downturns are invariably followed by upturns. And so the next upturn will come, we all know, even as we discuss macroeconomics and debate exact timing.

What is more important, perhaps, is for us to take stock and evaluate where our companies are on the supply chain journey. Smart companies will be able to identify critical gaps and take corrective actions in time.

Customer experience is really not that elusive once we understand the critical role of demand and supply planning processes and take action to enable supply chain themes discussed in this article.

Is your supply chain ready?

Puneet Saxena is a practice director at i2 Technologies.