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    2 - Semiconductor SCM

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    Raghvendra Awasthi
    The semiconductor supply chain is characterized by long fabrication times, complex manufacturing processes involving hundreds of steps, and volatile customer demand. This complexity presents challenges for on-time delivery. The supply chain must be viewed holistically rather than focusing on individual issues. Accurate forecasting is critical due to long lead times, and a push-pull strategy with optimal decoupling points can help balance make-to-stock and make-to-order operations. Companies should invest in advanced forecasting tools, optimize inventory levels, and implement integrated business planning to improve on-time delivery performance.

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    2 - Semiconductor SCM

    Uploaded by

    Raghvendra Awasthi
    54 views2 pages
    The semiconductor supply chain is characterized by long fabrication times, complex manufacturing processes involving hundreds of steps, and volatile customer demand. This complexity presents challenges for on-time delivery. The supply chain must be viewed holistically rather than focusing on individual issues. Accurate forecasting is critical due to long lead times, and a push-pull strategy with optimal decoupling points can help balance make-to-stock and make-to-order operations. Companies should invest in advanced forecasting tools, optimize inventory levels, and implement integrated business planning to improve on-time delivery performance.

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    Semiconductor Supply Chain Management

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    2- Semiconductor SCM

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    The semiconductor supply chain is characterized by long fabrication times, complex manufacturing processes involving hundreds of steps, and volatile customer demand. This complexity presents challenges for on-time delivery. The supply chain must be viewed holistically rather than focusing on individual issues. Accurate forecasting is critical due to long lead times, and a push-pull strategy with optimal decoupling points can help balance make-to-stock and make-to-order operations. Companies should invest in advanced forecasting tools, optimize inventory levels, and implement integrated business planning to improve on-time delivery performance.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    54 views2 pages

    2 - Semiconductor SCM

    Uploaded by

    Raghvendra Awasthi
    The semiconductor supply chain is characterized by long fabrication times, complex manufacturing processes involving hundreds of steps, and volatile customer demand. This complexity presents challenges for on-time delivery. The supply chain must be viewed holistically rather than focusing on individual issues. Accurate forecasting is critical due to long lead times, and a push-pull strategy with optimal decoupling points can help balance make-to-stock and make-to-order operations. Companies should invest in advanced forecasting tools, optimize inventory levels, and implement integrated business planning to improve on-time delivery performance.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    The supply chain in the semiconductor industry is characterized by long

    fabrication cycle time and non-linear manufacturing process. It involves


    close to 500 processing steps. This complexity, combined with the highly
    erratic electronics market (the consumers for chipsets), presents a unique
    challenge for the semiconductor supply chain.
    Below diagram represents the typical semiconductor supply chain

    For the semiconductor industry, one of the critical KPI is on-time shipments
    as their end customers, such as phone manufacturers, and other electronic
    OEMs rely on the on-time supply of the chipsets.
    On-time In-Full delivery can only be achieved if we see the supply chain as a
    whole, instead of focusing on the individual suboptimal subprocesses such
    as excess inventory or fill rate.
    The Challenges
    Due to the complexity of the semiconductor supply chain, it is imperative to
    have the right forecast at the starting of the planning process. An inaccurate
    forecast can lead to issues such as fabrication execution delays, capacity
    constraints, testing execution delays, and insufficient inventory of Die bank
    as well as of finished goods.
    The short product life cycle, combined with low accurate forecast and global
    logistics network, can be handled by an efficient push-pull strategy where
    “make-to-stock” and “make-to-order” can provide a hybrid solution. The
    effective placement of boundary points (also known as decoupling point)
    between “make-to-order” and “make-to-stock” is essential. As the Front-
    End operations usually take longer lead time of 6 to 8 weeks compared to
    Back End operation, which can complete in 1 to 2 weeks, efficient inventory
    planning in the form of placement of decoupling point is even more critical.

    The Road Ahead


    The starting point should be better demand forecasting. Companies should
    invest in State of the Art forecasting tools which leverage attribute-based
    forecasting as well as advanced demand sensing. They can also relook at
    their forecasting hierarchies to identify the right level of market prediction.
    Companies can think of the implementation of an advanced Sales &
    Operations (S&OP) planning process, which should include various sub-
    processes such as new product introduction, demand-supply balancing, and
    financial reconciliation.
    Inventory both at the decoupling point level as well as at the finished goods
    level should be further optimized. A reduced inventory cycle time is
    desirable, which can reduce inventory obsolescence.
    Finally, management should utilize the S&OP process to create a
    management control dashboard with what-if analysis capabilities.
    With the above measures in place, the limited visibility and silo planning can
    be replaced with Integrated Business Planning (IBP), the On-time delivery in
    full can be achieved, making the semiconductor supply chain more efficient.

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