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Introduction to Semicon
SCM
Allan ChenJune 16, 2001
Agenda
• Supply Chain Management (SCM) in
Semicon
• Semicon SCM Components
• Why Supply Chain Management
• Implementation
• Trend and Strategy
Supply Chain Management Supply Chain Management BlueprintBlueprint
Site Factory Planning
• Demand management• Fulfillment management• Allocation/Capacity management• ATP/CTP• Design Collaboration• E-Commerce
• Demand management• E-Procurement
Wafer Testing Final TestingFinal Testing
Semicon Industry
Assembly
• Supply Chain Planning• Global capacity allocation• Demand fulfillment
SuppliersSuppliers CustomersCustomers
ManufacturingProcess
ManufacturingProcess
InspectionInspection
ReceivingReceiving
PurchasingPurchasing
Production Production PlanningPlanning
SupplierSupplierMarketingMarketing
SalesSales
CustomerCustomer
DistributionDistribution
TransportationTransportationRaw
Material
Raw Material Finished
Goods
FinishedGoods
Order PromisingOrder
Promising
ForecastManagement
ForecastManagement
ProductDesign
ProductDesign
Order FlowOrder FlowPurchasePurchaseOrder FlowOrder Flow
Material FlowMaterial Flow Product FlowProduct Flow
Product Product DesignDesign FlowFlow
Integrated Manufacturing SystemIntegrated Manufacturing System
CustomerCustomerSupplierSupplier
What Is A Supply Chain in Semicon?What Is A Supply Chain in Semicon?
A supply chain is a network of facilities that performs the functions of procurement of material,transformation of material to intermediate and finished goods, and distribution of finished products to customers.
60 ~ 70 days
1 - 2 days9 - 14 days 15 - 20 days
Fabrication Probing Assembly Testing
diebank
F/G
FAB IFAB I
FAB 2FAB 2
C/PC/P F/TF/Twaferbank
SubASSYSub
ASSYSubF/T
SubF/T
• The Real Challenge in A Supply Chain - Uncertainty*• Different Sources of Uncertainties Exist along A Supply Chain
– Demand: forecasting mismatch, demand volume, product mix, unexpected changes
– Process: yield, machine downtimes, WIP, process hold– Supply: quality, reliabilities of FAB wafer supply and back-
end capacity supply
*Tom Davis, “Effective Supply Chain Management”, Sloan Management Review, 1993.
ASSY ProcessFAB
ProcessCP
Process
FT Process
DemandSupply
Supply
Supply Supply
Uncertainty Plagues the Supply Uncertainty Plagues the Supply ChainChain
The Semiconductor Supply Chain The Semiconductor Supply Chain Multi-level Supply ChainMulti-level Supply Chain
op2 op3 op4 op5 op6 op7
cop1 cop2 cop3
op8 op9 op10op1
Split Route
bop1 bop2
aop1 aop2
Main Route
op4 bop1 bop3 op9 op10op1Route_1
op4 op6 op7 op8 op9 op10op1Route_2
op2 op3 op4 cop1 cop2 cop3 op9 op10op1Route_3
Wafer process routing
Assembly steps
op5
op5
op5
op2
op2
op3
op3 op6
Split Route
Operation Steps: Semiconductor vs. Assembly
Rework route
Planning complexity for IC manufacturingPlanning complexity for IC manufacturing
0.220.22Lot#2Lot#2
EQP#1x
EQ#2D EQ#2E
• Planning over thousands of Decision Trees
EQP#1
EQ#2A EQ#2B EQ#2C
EQ#3A EQ#3B EQ#3C EQ#3D
EQ#2B EQ#2C EQ#2D
EQ#3B EQ#3C
EQ#50
0.220.22Lot#1Lot#1
OP1OP1
OP2OP2
OP3OP3
OP412OP412
OP413OP413
OP414OP414
0.220.22Lot#3000Lot#3000
0.180.18Lot##Lot##
0.350.35Lot##Lot##
0.150.15Lot##Lot##
EQP EQP EQP EQP EQP EQP
EQP EQP EQP EQP EQP EQP
• Capacity & Capacity & ConstraintConstraint
• Material ConstraintMaterial Constraint• ResourcesResources
Semiconductor SCM Components
SCM Enterprise Application Decision SCM Enterprise Application Decision SupportSupport
Supply Chain Event ManagementSupply Chain Event Management
Order ManagementOrder Management
Warehouse ManagementWarehouse Management
Transportation ManagementTransportation Management
International Trade LogisticsInternational Trade Logistics
Inventory ManagementInventory Management
Production SchedulingProduction Scheduling
Manufacturing PlanningManufacturing Planning
Distribution PlanningDistribution Planning
Supply PlanningSupply Planning
Supply Chain CollaborationSupply Chain Collaboration
Demand Planning and ForecastingDemand Planning and Forecasting
Supply Chain Network DesignSupply Chain Network Design
YearsYearsQuartersQuartersWeeks/MonthsWeeks/Months
Hours/Days
Hours/Days
Seconds/Minutes
Seconds/Minutes
OperationalPlanning
OperationalPlanning
TacticalPlanningTacticalPlanning
StrategicPlanningStrategicPlanning
Supply Chain ExecutionSupply Chain Execution
Supply Chain PlanningSupply Chain Planning
Supply Chain Event ManagementSupply Chain Event Management
Order PromisingOrder Promising
Inventory ManagementInventory Management
Production SchedulingProduction Scheduling
Material & Capacity PlanningMaterial & Capacity Planning
ATP/CTPATP/CTP
Supply Chain CollaborationSupply Chain Collaboration
Demand Planning and ForecastingDemand Planning and Forecasting
Sales and Operations PlanningSales and Operations Planning
YearsYearsQuartersQuartersWeeks/MonthsWeeks/Months
Hours/Days
Hours/Days
Seconds/Minutes
Seconds/Minutes
OperationalPlanning &
Control
OperationalPlanning &
Control
TacticalPlanningTacticalPlanning
StrategicPlanningStrategicPlanning
Supply Chain ExecutionSupply Chain Execution
Supply Chain PlanningSupply Chain PlanningOperations SequencingOperations Sequencing
Shop Floor ControlShop Floor Control
Resource RationalizationResource Rationalization
Semicon SCM Enterprise Application Decision Semicon SCM Enterprise Application Decision SupportSupport
Multi-Site Production PlanningMulti-Site Production Planning
Shop Floor ControlShop Floor Control
Operations SequencingOperations Sequencing
Multi-Level Supply Chain ManagementMulti-Level Supply Chain Management
Material & Capacity PlanningMaterial & Capacity Planning
Production SchedulingProduction Scheduling
Multi-Site Capacity ManagementMulti-Site Capacity Management
Resource RationalizationResource Rationalization
Order PromisingOrder Promising
ATP/CTP/PTPATP/CTP/PTP
Supply Chain Event ManagementSupply Chain Event Management
Supply Chain CollaborationSupply Chain Collaboration
Demand Planning and ForecastingDemand Planning and Forecasting
Sales and Operations PlanningSales and Operations Planning
Multi-Site Production TrackingMulti-Site Production Tracking
Why Supply Chain Management?Why Supply Chain Management?
•Lack of due date projection capability in foundry environment
•Quickly generate ATP & CTP to customer
•Limited visibility into capacity constraints
•Concurrent planning & optimizations of all constraints. Problem windows and real-time simulation capabilities to react in a timely manner
•Weak integration between planning and execution
•Enterprise visibility of planning process and multi-user access enable better process and and convincing results
FactFact
Planning Issues Faced Needs
FactFactCurrent Manufacturing planning issues Needs
•Lack of rapid re-plan capability •Reduce planning cycle time allows daily planning and rapid re-planning
•Lack of detailed execution schedule •With proper modeling, provides detailed execution priority/schedule
•Lack of what-if analysis in variety product mix situation
•Provide what-if analysis capability
• Islands of data, multiple excel spreadsheets consuming vast amounts of planner time
•Single entry of forecasting information, company-wide visibility
•Manual Work with limited dimensional view (e.g. Total volume by Product)
•Automatic tools with both planning and execution data inputs
Future Business Process ChangesFuture Business Process Changes
• Reduce planning cycle from a weekly to daily
• Integrate all fab areas as one team and quick
response for capacity allocation.
• Need a flexible system for start planners for
dynamic capacity situations.
• Solve problems from planning system instead of
execution system.
• Should integrate from customer to turnkey for
Virtual Fab requirement.
Example: Business analysis and solution Example: Business analysis and solution Customer order fulfillment performanceCustomer order fulfillment performance
• Scenario: Good individual site delivery performance but BAD overall delivery
performance, due to lack of integrated manufacturing targets.
• Issues– FABs’ MPS don’t meet CP/ATS’s delivery needs– Invisibility of FABs’ planning/execution changes to CP/ATS– Lack of Push/Pull mechanism for Fab lots under defined target
• Current Status– MPS just cover Fabs only, CP/ATS MPS were generated based on current WIP– Replace projected out date with scheduled out date when lots were delayed– Managed manually
• System Solution– Manage overall capacity for FABs, CPs, ATS, EBO, PC & IE – Generate integrated target for Fab, CP, ATS and EBO by backward planning– Update lot schedule out date for back-end stages by daily – Raise demand/supply changes to drive back-end re-planning– Coordinate FABs/CP/ATS/EBO planning modules for Push/Pull decision– Re-plan for execution violation by weekly
WaferFabrication
CircuitProbing
AssemblyPackaging
FinalTest
Backward planning for plan lots
Commit dueWafer Start
Forward planning for WIP
Wafer Out DateCurrent WIP
Planning LogicPlanning Logic
ImplementationImplementation
Supply Chain Management BlueprintSupply Chain Management Blueprint
PlanningPlanningGlobal Optimization
MES
ExecutionExecutionFab Optimization
Dispatching
.....
Overall Supply Chain Planning
FactoryPlanning
Customer
Fab1Fab2 Fab6 Testing Assembly
Final Test
Demand PlanningDemand Planning AllocationAllocation Capacity PlanningCapacity Planning
Order ManagementOrder Management Output PlanningOutput PlanningFulfillmentFulfillment
Implementation Strategy – Bottom-Implementation Strategy – Bottom-UpUpStep 3Step 3Step 3Step 3
Global CollaborationGlobal CollaborationGlobal CollaborationGlobal CollaborationIncreasing velocity with partners Increasing velocity with partners through collaborationthrough collaboration
Increasing velocity with partners Increasing velocity with partners through collaborationthrough collaboration
Getting start from Manufacturing PlanningGetting start from Manufacturing Planning
• the basis of supply chain management• manageable risks• fast growth requirements for Fabs
Supply Chain LevelSupply Chain LevelPlanningPlanning
Supply Chain LevelSupply Chain LevelPlanningPlanningStep 2Step 2Step 2Step 2
Increasing velocity within Increasing velocity within company supply chain using company supply chain using global plannerglobal planner
Increasing velocity within Increasing velocity within company supply chain using company supply chain using global plannerglobal planner
Step 1Step 1Step 1Step 1 Increasing velocity within each manufacturing Increasing velocity within each manufacturing site using factory planning system site using factory planning system
Increasing velocity within each manufacturing Increasing velocity within each manufacturing site using factory planning system site using factory planning system
Factory LevelFactory LevelOptimizationOptimization
&Planning&Planning
Factory LevelFactory LevelOptimizationOptimization
&Planning&Planning
Factory LevelFactory LevelOptimizationOptimization
&Planning&Planning
Factory LevelFactory LevelOptimizationOptimization
&Planning&PlanningFactory LevelFactory LevelOptimizationOptimization
&Planning&Planning
Factory LevelFactory LevelOptimizationOptimization
&Planning&Planning
Implementation Strategy – Top-Implementation Strategy – Top-DownDownStep 1Step 1Step 1Step 1
Global CollaborationGlobal CollaborationGlobal CollaborationGlobal Collaboration
Getting start from Business Process DefinitionGetting start from Business Process Definition
• business goal driven• clear process flow and target• higher level driving force
Supply Chain LevelSupply Chain LevelPlanningPlanning
Supply Chain LevelSupply Chain LevelPlanningPlanningStep 2Step 2Step 2Step 2
Step 3Step 3Step 3Step 3 Factory LevelFactory LevelOptimizationOptimization
&Planning&Planning
Factory LevelFactory LevelOptimizationOptimization
&Planning&Planning
Factory LevelFactory LevelOptimizationOptimization
&Planning&Planning
Factory LevelFactory LevelOptimizationOptimization
&Planning&PlanningFactory LevelFactory LevelOptimizationOptimization
&Planning&Planning
Factory LevelFactory LevelOptimizationOptimization
&Planning&Planning
ObjectivesObjectives
• Provide a predictable customer capacity
commitment
• Improve visibility of capacity efficiency
• Improve quality of decision process about allocation
• Improve investment and resource utilization
• Quick response to demand/supply variance
• Improve accuracy of total projected out date
• Enhance customer order tracking visibility
• Improve global SC operation efficiency
• Improve delivery deadline performance
Solution developmentSolution development
? In-house design In-house design Enhance Legacy system!?Enhance Legacy system!?
Software Package ?!Software Package ?!
• Efficiency - Solutions are ready now (6 months for a site)
• Quality - Professional IT skills with domain knowledge
• Expansion - More feasible functions were
implemented
• Maintenance - Easier to make upgrade by vendor
• Market trend -
• Solution was verified by market
• System development and maintenance outsourcing
Software Package !!Software Package !!
ChallengesChallenges• Resources
– Resources consuming
– Need more and more involvement and commitment from users for:• Data Collection and Validation
• Model Design Input & Feedback
• Functionality validation
• Planning Scenario Development and checking
• Legacy system adapting and interfacing
• Tradeoff between a variety of objectives
– Ex. Max Utilization vs. Customer Satisfaction
– Requires management support to synchronize overall and each individual area’s KPIs or measures.
• Business Process Reengineering (BPR)
• PM and team capability
99thth 1010thth 1111thth 1212thth 33rdrd 11stst 22ndnd 44thth 55thth 66thth 77thth 88thth
Implementation Milestone
BSDBSDDSA & PrototypingDSA & Prototyping
ImplementationImplementation
Conv.Conv.
Beta test
RolloutRollout
JV Fabs
RolloutRollout
3 Fabs
TestingTesting
RolloutRollout
2 Fabs
Planning CollaborationPlanning Collaboration
Change managementChange management
Fine tune & Enhancement
7 Months
Fab, Subcon, Mask,CP
Trend and Strategy
From ERP to SCM to Supply Chain From ERP to SCM to Supply Chain CollaborationCollaboration
• support the planning, scheduling, and fulfillment• Allow cross-functional processes to coordinate activities across company departments
ERPERP
SCMSCM
Supply Chain Supply Chain CollaborationCollaboration
• Back-office functions alone• Automate functional processes• Ensure data consistency & integrity• provide a transactional backbone
• help companies interact better with their customers, suppliers, and employees.• Offered as hubs to support joint intra-enterprise and inter-enterprise planning and scheduling
Business Application Business Application EvolutionEvolution
Source: GartnerSource: Gartner
Collaborative Commerce
Design/Engineering/Logistics CollaborationDesign/Engineering/Logistics Collaboration
Go to MarketGo to Market
Design Collab.
InformationSharing
TechnicalSupport, etc.
Communicatione.g. Discussion
PilotRunPilotRun
RiskProduction
RiskProduction ProductionProduction
Engineering Collab.
Evaluation Evaluation Initiation Initiation Design Implementation
Design Implementation
Logistics Collab.
Customer Customer
DocumentSharing
tsmc tsmc
Total Supply Chain ManagementTotal Supply Chain Management
Operations SequencingOperations Sequencing
Shop Floor Control
Shop Floor Control
InventoryManagement
InventoryManagement
Production SchedulingProduction Scheduling
Material & Capacity Planning
Material & Capacity Planning
Multi-Site Production
Planning
Multi-Site Production
Planning
Multi-Site Production
Tracking
Multi-Site Production
Tracking
Multi-Site Demand &Capacity Allocation
Multi-Site Demand &Capacity Allocation
Order Management
Order ManagementATP/CTP/PTPATP/CTP/PTP
Demand Planning and Forecasting
Demand Planning and Forecasting
Supply Chain Event ManagementSupply Chain Event Management
Supply Chain CollaborationSupply Chain Collaboration
e Foundry Hub Is Emerginge Foundry Hub Is Emerging
• Lab simulation• Design for fabrication• IP library• Knowledge management• Design rules
• PDM• Product Life Cycle Management
• Supply chain management• Logistics management• B2B integration• ERP, CRM
• On-line ordering, auction• Consolidated buying• Liquid market for surplus ( inv, spare parts, equipment)
A Global Collaborative Commerce WebA Global Collaborative Commerce Web
Web-Based B2B Transactions Should SkyrocketWeb-Based B2B Transactions Should Skyrocket
0
200
400
600
800
1000
1200
1400
B2C
B2B
1999 2000 2001 2002 2003
Business-to-Consumer 18 33 52 76 108
Business-to-Business 109 251 499 843 1,331
($ in billions)
Source: Forrester Research.
Global B2B Transaction PotentialGlobal B2B Transaction Potential
0
500
1000
1500
2000
2500
3000
3500
1998 1999 2000 2001 2002 2003
US
Global
($ in billions)
1998 1999 2000 2001 2002 2003
US 39 109 251 499 843 1,331
Global 80 170 390 970 2,000 3,200
Source: Forrester Research.
109% CAGR
Successful IT Strategies for FoundrySuccessful IT Strategies for Foundry
• Put customers at the center of IT systems
• Provide rapid access to fab information remotely
• Cluster fab Manufacturing Execution Systems
• Internet is the standard communication channel with customers
• Integrate with upstream and downstream supply chain
Source: Quincy Lin, Senior Vice President, TSMC
QuickerDocumentDownload
eFoundryTM
Suite
AcceleratingTime-to-volumeTime-to-market
EnhancedDesign
Environment
EnhancedSecurityControl
YieldData
Analysis
Better Operation
Environment
SmootherInformation
Flow
New TechIntroduction
BetterUser
Interface
EnhancedService
ExpandedTechnicalSupport
eFoundryeFoundryTMTM Brings the Virtual Fab to Life Brings the Virtual Fab to Life
Q & A
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