From: Subject: Online Minicase W3.1 Date: Sun, 27 May 2007 22:06:45 +0430 MIME-Version: 1.0 Content-Type: multipart/related; type="text/html"; boundary="----=_NextPart_000_00C3_01C7A0AB.50ACEB70" X-MimeOLE: Produced By Microsoft MimeOLE V6.00.3790.3959 This is a multi-part message in MIME format. ------=_NextPart_000_00C3_01C7A0AB.50ACEB70 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable Content-Location: http://higheredbcs.wiley.com/legacy/college/turban/0471705225/web/minicase/ch03/w3_1.html Online Minicase W3.1 =20

The Problem

The semiconductor (or chip) industry is one of the most competitive = global=20 industries. The rivalry among Japan, Korea, Taiwan, and the United = States is=20 fierce, and prices are continuously being driven down. When the economy = is weak,=20 demand for computers weakens, resulting in price cuts and losses to the = chip=20 manufacturers.

One way to survive is to customize products. = National=20 Semiconductor Corporation (NSC) (national.com) has over 10,000 = products.=20 However, this creates a problem for customers: When they need a chip, = customers=20 provide specifi- cations to several chip manufacturers, collect catalogs = and=20 samples from the manufacturers, and then contact them for prices and = technical=20 details. This takes a considerable amount of time and effort.=20

Connectivity problems due to different hardware, software, and=20 communication standards had forced NSC to resort to the telephone, fax, = and=20 regular mail to communicate and collaborate with its customers. The=20 communication channels that were available prior to the Internet were = either=20 regular telephone lines or private communication lines, both of which = were=20 expensive. Electronic data interchange (EDI) was in use, but it was = limited to=20 transaction processing and was carried on an expensive value-added = network=20 (VAN), so many customers refused to use it. Transmission of pictures, = charts,=20 and diagrams, a major part of the NSC product catalog, was a very = difficult=20 task. NSC found it just too expensive and cumbersome to handle = communication and=20 collaboration with customers over its old system.

The Solution

NSC introduced an innovative solution. The company posts detailed=20 descriptions of its 10,000 products on its corporate portal*=20 (national.com). The portal allows NSC=92s customers to access = product=20 information 24 hours a day. Browsing through the information, customers = are able=20 to download the documents they need. The Web site is also used by the = company=92s=20 employees to search out information quickly and accurately, and to = receive more=20 direct feedback from customers.

*The Internet terms italicized in this case are defined later in = this=20 chapter, or in Technology Guide 5, or in Chapter 4. Another, generic = source for=20 Internet terms that you do not know is the Web site=20 whatis.techtarget.com.=20


NSC=92s Web site visitors use a search engine that helps them find a = matching=20 product, based on product specifications in the online =93Knowledge = Base.=94 It also=20 uses custom software that can extract information from existing = databases and=20 automatically format it in the HTML programming language. (HTML = helps in=20 preparing documents that appear on the Internet; see Technology Guide = 5.) Since=20 2002, National=92s customers also use a sophisticated open system = customer=20 interface based on WebMethods integrated platform and B2B standards = introduced=20 by RosettaNet. This enables fast search by customers for parts and = components.=20

NSC customers can also build personalized Web sites (titled = =93My Bill of=20 Materials=94). These personalized sites can host information related to = customer=20 projects and their requirements, and any other pertinent information. = Customers=20 can select the information to be made accessible to NSC. Through the=20 personalizedWeb sites, NSC delivers the latest product information of = interest=20 to individual customers. This application is part of the corporate=20 extranet system. The arrangement also allows NSC to watch the = inventory=20 level of chips at customers=92 facilities, and automatically ship = products to them=20 when the inventories are low. For example, the Internet links enabled = Tektronix=20 Inc. (a major customer) to discontinue paper files of past and current = inventory=20 parts. Product specifications and availability are automatically updated = and=20 linked to Tektronix=92s system. This in turn has enabled NSC to = reengineer its=20 distribution system.

The search process is supported by an = electronic=20 form that is easily filled in by customers, and by a menu of=20 hyperlinks to related products and services. The system is used = both by=20 customers and by NSC engineers. Its benefits are the following: reducing = the=20 sample-ordering process by days or weeks; expediting the design of new = products;=20 increasing the exposure of NSC products by a factor of 10 (customers now = download 10 times as many documents as they did using just e-mail); = providing=20 more information to customers; providing direct and expeditious feedback = from=20 customers; increasing quality and productivity; improving the = company=92s=20 relations with its business partners; and increasing profitability and=20 competitiveness.

The NSC Web site offers design assistants and=20 simulators to guide customers in designing their products. Using this = facility,=20 customers can input their system specifications, find the devices that = fit the=20 specifications, validate design by simulation, and order the required = parts. NSC=20 also provides behavioral models and software to support the design = process.=20 NSC=92s design-assistant tool kit was estimated to save National=92s = design=20 customers $50 million in the first year.

A visit to the site in = May 2004=20 revealed many new features. For example, the analog university = provides=20 many online seminars, and there are an online technical journal, an = online=20 biweekly newsletter, online research tools, a locator to find the = nearest=20 distributors, a list of job openings, and much more. Information is = available in=20 several languages.

The Results

The Internet solution enables NSC to use electronic catalogs = instead=20 of paper ones, thus saving the company typesetting, printing, and = mailing=20 expenses. The electronic catalogs also can be kept much more current = than paper=20 catalogs could. In addition, customers can view catalogs and download = detailed=20 documents in order to analyze products more closely. Large customers get = customized catalogs. The e-mail capabilities allow rapid communication = between=20 NSC engineers and customers. The site also offers selfconfiguration that = helps=20 customers to configure the chips they need. Added software and hardware, = such as=20 videoconferencing and screen sharing, let NSC engineers collaborate with = customers electronically, allowing them to work simultaneously on the = same=20 documents from different locations. All this is done at a relatively low = cost.=20

NSC=92s sales and profitability increased significantly = immediately after=20 the introduction of the Web-based applications and Internet solution. In = 1998,=20 NSC earned the best extranet application award from Internet Week and = Network=20 Computing. The system also has enabled the company to minimize the = damage caused=20 by the slowdown of sales of new technology by 20 to 40 percent in = 2002=962003.=20

Sources: Compiled from Internet Week (March 9, 1998); = National=20 Semiconductor press release (October 16, 2000), WebMethods.com = (National=20 Semiconductor Success Story, accessed May 5, 2003); and visit at=20 national.com (May, 2004).=20

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