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.