How does Brazil’s first and only maker of silicon wafers navigate uncharted waters and make time to focus on innovation?
Not long ago, Brazil was an emerging economy poised to become one of the fastest-growing in the world, alongside Russia, India, and China. But with no road map or industry ecosystem in place, its rise stalled.
The creation of semiconductor chipmaker Centro Nacional de Tecnologia Eletrônica Avançada, known as CEITEC S.A., is part of an ambitious government initiative to pull Brazil into the digital economy. The company’s main purpose is to accelerate the application of semiconductors across Brazil and Latin America through the production of computer chips. Most importantly, the government relies on CEITEC to drive the adoption of Internet of Things (IoT) solutions.
Driving GDP by Driving Cattle
CEITEC runs 24×7 to keep up with demand for millions of specialized RFID chips for cars, cattle, passports, and more – and reports its complex financial data in real time directly to the government’s finance system.
Its first commercial product was an advanced RFID device designed to track cattle. Embedded in a ring placed in the ears of 220 million cattle and dubbed “Chip do Boi,” the chip improves tracking and other processes for cattle management and exports. Annual demand for the specialized chip exceeds 1 million units and is part of the reason Brazil is expected to grab one-quarter of the global beef trade by 2024.
CEITEC’s factory can produce 70 million chips per year. It uses this capacity to design and manufacture chips for Brazilian passports, automobile registration, cargo tracking, medical traceability, and bankcards.
In at least one developed country, the semiconductor industry contributes as much as 15% to the GDP. This is what the government hopes CEITEC can achieve in Brazil.
– Ireno Demanarig, CIO, CEITEC S.A.
Experiencing Growing Pains in a New Landscape
CEITEC operates under a government mandate to report all financial operations to federal auditors. Doing so requires direct integration with government systems. Despite CEITEC’s product success, its finance systems and processes weren’t properly integrated internally, and couldn’t integrate seamlessly with government systems.
In fact, CEITEC was to become the first government-run company to integrate with Brasília, the nation’s capital, for real-time reporting. Without this integration, the company could have lost funding.
On the fabrication side, the company lacked material traceability throughout the production process. Its factory floor runs constantly and required optimization to meet demand. And enterprise-wide, employees needed faster access to accurate information for planning and decision making.
“Our production team and our material purchasing team didn’t have the same view of data,” Demanarig says. “That made planning difficult, and we had situations where we were running short on materials” – bringing production to a costly halt.
Boosting Resource and Time Management
To reach its full potential, CEITEC adopted SAP S/4HANA as its digital core. It also uses the SAP Best Practices for Semiconductor and Photovoltaic Companies package, as well as SAP Fiori apps for real-time data on mobile devices.
Within eight months, the company could implement global best practices for the semiconductor industry, achieve direct integration with government systems, accelerate financials with real-time reporting, and improve production processes.
Books close in the same month that they’re reported – well within government compliance – and the finance department’s workload has been cut in half.
Labor costs are also down, thanks to more automated production processes, assembly line troubleshooting, and less material waste.
CEITEC S.A. is now able to keep up with demand for millions of specialized RFID chips for cars, cattle, passports, and more – while raising the bar for its own standards and the future of Brazil.
We implemented a new ERP system without any negative impact on the infrastructure or interruption to our operations. We found the cost savings to be amazing. We got rid of our old database and avoided the cost of servers, storage, and software licenses. And the TCO has been very, very low – it doesn’t even compare with the cost of operating the old system.
– Ireneo Demanarig, CIO, CEITEC S.A.