Electronics: Lean, Mean, And Ready For GrowthElectronics: Lean, Mean, And Ready For Growth

Bonner is more concerned with trying to better integrate TI's supply chain to receive customer requirements and order confirmations and to better manage inventory for customers. Toward that end, the company's IT organization implemented a system called Multi-Factory Flow in January. The system lets TI more accurately plan and track products in the manufacturing pipeline.

The biggest challenge has proven to be the quality of the data that trading partners provide. "The system isn't the difficult stuff," Bonner says. "It's the confidence in the data and working on the business processes."

TI also has been working to provide quality data to its customers, and that effort has had regulatory benefits as well. In June, the company launched a Web site that lets customers determine which of its parts meet the European Union's lead-free and green rules that take effect in 2006. "Customers, particularly in the EU, have to certify their products don't contain any environmentally undesirable by-products of manufacturing," Bonner says. "So being able to provide information like that to a large number of customers is something that we spend time on."

As concerned as electronics companies claim to be about government regulations, they seem to be more focused on regulating themselves. Four years of belt-tightening have left the industry understandably concerned about running lean and mean.

At TI, that has meant a tight coupling of business technology with business units. Business units control the project-oriented funding backing IT-based projects, rather than IT. "We've given away the funding deliberately with the idea that we want to have business sponsors propose the projects," Bonner says.

Bonner says this system has helped keep costs under control while ensuring that beneficial projects get approved, because senior business executives have to understand and defend expenditures. Says Bonner, "The duality of what you centralize and what you decentralize is really the secret sauce for how our IT has been effective."

INDUSTRY LEADERS Company Revenue in millions Income (loss)
in millions Panasonic USA $71,921 $405 Raytheon Co. $18,109 $365 Texas Instruments Inc. $9,834 $1,198 Lexmark International Inc. $4,755 $439 Applied Materials Inc. $4,477 ($149) Micron Technology Inc. $3,091 ($1,273) National Semiconductor Corp. $1,983 $283 Agere Systems Inc. $1,840 ($338) LSI Logic Corp. $1,693 ($309) American Power Conversion Corp. $1,465 $177 Cadence Design Systems Inc. $1,119 ($18) Marvell Semiconductor Inc. $820 $46 Polaroid Corp. $753 $91 Sharp Laboratories of America -- -- Financial data is from public sources and company supplied.
Revenue is for latest fiscal year.
Dashes indicate companies requesting financial information not be disclosed.

SNAPSHOT INSIDE COMPANIES Average portion of revenue spent on IT 3% Companies using radio-frequency identification 25% Companies globally sourcing products and supplies 75% HOW COMPANIES DIVIDE THEIR I.T. BUDGETS Hardware purchases 14% IT Services or outsourcing 13% Research and development 3% Salaries and benefits 35% Applications 22% Everything else 13% INDUSTRY FINANCIALS Average year-over-year revenue change 0% Average year-over-year net income change 112% DATA: information RESEARCH
See year-over-year shifts in business-technology practices for this industry.
Compare and contrast this year's data with last year's.

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