Scan Compression has become an integral part of today’s design-for-test (DFT) methodology for achieving high quality test at lower costs. Just as scan matured over a span of 40 years we are going to see Scan Compression improve. In this paper we present one such improvement to scan compression. An intelligent scan chain design for proactively managing the Xs in scan compression architectures is presented. In-depth analysis via experimental data is used to show that very high X-tolerance can be achieved using the proposed technique without any changes to ATPG or compressor architecture. We also show that this eventually translates into higher compression ratio and lower test data volume.