Success Story
ON Semicoductor
By tightening control over overseas disbursements and automating netting workflows, ON Semiconductor reduced FX costs while supporting a disciplined cash management strategy.
countries
revenue (2015)
invoices processed per netting cycle
About
Headquartered in Phoenix, Arizona, On Semiconductor designs and delivers semiconductor products that help engineers solve complex design challenges across automotive, communications, computing, consumer, industrial, medical and military/aerospace markets. It operates manufacturing locations in 9 countries with reported revenue of $3.5 billion in 2015.
Solutions leveraged:
Challenges
ON Semiconductor needed stronger control and efficiency across high-volume, cross-border supplier payments, while reducing FX and payment costs. Some challenges included:
- Two netting cycles per month processed approximately 20,000 invoices into about 800 payments, creating significant operational complexity
- Multi-rail execution required consistent formatting and routing across ACH, wire, SEPA and SWIFT, with different identifiers and regional rules
- FX execution required reliable rate handling and timing so teams could complete processing without rework or exposure to rate movement
- Treasury needed liquidity control over overseas disbursements, including the ability to manage quarter-end timing when required
Solution
ON Semiconductor partnered with Ripple Treasury, powered by GTreasury, to operationalize high-volume netting and payment execution while improving liquidity control and FX efficiency. These solutions were deployed:
- Ripple Treasury Netting: Invoices were extracted from Oracle ERP, grouped by supplier name and/or bank account and uploaded with supplier, participant banking and invoice details. The team authorized participant information, imported FX rates and used Ripple Treasury Netting to create payment files and log reports for execution and reconciliation.
- Payment File Creation and Bank Connectivity: The team executed payments by sending XML files via sFTP to the bank, using customized file import formats and local payment methods for common currencies. The bank responded with EDI reports showing acceptance or rejection, followed by additional emailed reports including rate confirmations.
- ERP-To-Payments Reconciliation Support: Ripple Treasury Netting produced files that supported reconciliation between the ERP records and payments made, strengthening control and close readiness.
Benefits
- Liquidity control on overseas disbursements, including amount and schedule management
- Enabled a cash management strategy, including delaying payments at quarter end when needed
- Reduced overall FX costs by netting payments by business units in local currency and netting to suppliers in invoiced currency
- Reduced payment costs by sending low-value payments via ACH where possible
Conclusion
ON Semiconductor streamlined high-volume supplier settlement by pairing structured netting cycles with automated payment file creation, bank reporting and reconciliation support. The result strengthened liquidity control, reduced FX and payment costs and reinforced cash management discipline across global disbursements.