Introduction to Semicon SCM Thomas Chen/Allan Chen June 16

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Introduction to Semicon SCM

• Thomas Chen/Allan Chen
• June 16, 2001

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Agenda

• Supply Chain Management (SCM) in Semicon
• Semicon SCM Components
• Why Supply Chain Management
• Implementation
• Trend and Strategy

3
Supply Chain Management Blueprint
Site Factory Planning
Semicon Industry
Wafer
Testing
Final Testing
Assembly

• Supply Chain Planning
• Global capacity allocation
• Demand fulfillment

Customers
Suppliers

• Demand management
• Fulfillment management
• Allocation/Capacity management
• ATP/CTP
• Design Collaboration
• E-Commerce

• Demand management
• E-Procurement

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Integrated Manufacturing System
Customer
Supplier
Product Design
Manufacturing Process
Raw Material
Finished Goods
Transportation
Inspection
Distribution
Receiving
Customer
Production Planning
Order Promising
Sales
Purchasing
Supplier
Marketing
Forecast Management
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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.

Sub ASSY
Sub F/T
30 70 days
9 - 14 days
15 - 20 days
1 - 7 days
FAB I
C/P
F/T
die bank
wafer bank
FAB 2
F/G
Fabrication
Probing
Assembly
Testing
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Uncertainty Plagues the Supply Chain

• 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

ASSY Process
Tom Davis, Effective Supply Chain Management,
Sloan Management Review, 1993.
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The Semiconductor Supply Chain Multi-level
Supply Chain
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Operation Steps Semiconductor vs. Assembly
bop1
bop2
Wafer process routing
Split Route
op2
op3
op4
op5
op6
op7
op8
op9
op10
op1
Main Route
cop1
cop2
cop3
aop1
aop2
Split Route
Rework route
Assembly steps
op4
bop1
bop3
op9
op10
op1
Route_1
op5
op2
op3
op6
op5
op4
op6
op7
op8
op9
op10
op1
Route_2
op2
op3
op2
op3
op4
cop1
cop2
cop3
op9
op10
op1
Route_3
op5
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Planning complexity for IC manufacturing
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Semiconductor SCM Components
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SCM Components
Supply Chain Management
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SCM Components
Supply Chain Management
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SCM Enterprise Application Decision Support
Supply Chain Event Management
Supply Chain Execution
Order Management
Supply Chain Planning
Operational Planning
Warehouse Management
Transportation Management
International Trade Logistics
Inventory Management
Production Scheduling
Tactical Planning
Manufacturing Planning
Distribution Planning
Supply Planning
Supply Chain Collaboration
Demand Planning and Forecasting
Strategic Planning
Supply Chain Network Design
Years
Quarters
Weeks/ Months
Hours/ Days
Seconds/ Minutes
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Semicon SCM Enterprise Application Decision
Support
Supply Chain Event Management
Supply Chain Execution
Order Promising
Supply Chain Planning
Operational Planning Control
Operations Sequencing
Shop Floor Control
Inventory Management
Production Scheduling
Tactical Planning
Material Capacity Planning
ATP/CTP
Resource Rationalization
Supply Chain Collaboration
Demand Planning and Forecasting
Strategic Planning
Sales and Operations Planning
Years
Quarters
Weeks/ Months
Hours/ Days
Seconds/ Minutes
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Multi-Level Supply Chain Management
Sales and Operations Planning
Supply Chain Collaboration
Supply Chain Event Management
Demand Planning and Forecasting
Order Promising
ATP/CTP
Resource Rationalization
Multi-Site Production Planning
Multi-Site Production Tracking
Multi-Site Capacity Management
Production Scheduling
Material Capacity Planning
Operations Sequencing
Shop Floor Control
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Why Supply Chain Management?
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Fact
Planning Issues Faced
Needs

• Weak integration between planning and execution

• Enterprise visibility of planning process and
  multi-user access enable better process and and
  convincing results

• 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

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Fact
Planning Issues Faced
Needs

• Islands of data, multiple excel spreadsheets
  consuming vast amounts of planner time

• Single entry of forecasting information,
  company-wide visibility

• Automatic tools with both planning and execution
  data inputs

• Manual Work with limited dimensional view (e.g.
  Total volume by Product)

• Lack of rapid re-plan capability

• Reduce planning cycle time allows daily planning
  and rapid re-planning

• Lack of what-if analysis in variety product mix
  situation

• Provide what-if analysis capability

• Lack of detailed execution schedule

• With proper modeling, provides detailed execution
  priority/schedule

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Future 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.

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Example Business analysis and solution Customer
order fulfillment performance

• Scenario
• Good individual site delivery performance
  but BAD overall delivery performance, due to lack
  of integrated manufacturing targets.
• Issues
• FABs MPS dont meet CP/ATSs 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

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Planning Logic
Backward planning for plan lots
Wafer Start
Commit due
Wafer Fabrication
Circuit Probing
Assembly Packaging
Final Test
Wafer Out Date
Current WIP
Forward planning for WIP
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Implementation
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Supply Chain Management Blueprint
Overall Supply Chain Planning
Planning Global Optimization
Demand Planning
Allocation
Capacity Planning
Order Management
Output Planning
Fulfillment
Customer
Execution Fab Optimization
.....
Fab1
Final Test
Factory Planning
Fab2
Testing
Assembly
Fab6
MES
Dispatching
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Implementation Strategy Bottom-Up

• Getting start from Manufacturing Planning
• the basis of supply chain management
• manageable risks
• fast growth requirements for Fabs

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Implementation Strategy Top-Down
Global Collaboration
Step 1
Supply Chain Level Planning
Step 2
Step 3

• Getting start from Business Process Definition
• business goal driven
• clear process flow and target
• higher level driving force

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Objectives

• 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

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Solution development
In-house design Enhance Legacy system!?
?
Outsourcing Solution ?!
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Challenges

• 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 areas KPIs or
  measures.
• Business Process Reengineering (BPR)
• PM and team capability

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Implementation Milestone
9th
10th
11th
12th
3rd
1st
2nd
4th
5th
6th
7th
8th
Beta test
BSD
DSA Prototyping
Fab, Subcon, Mask,CP
Implementation
Conv.
Testing
Fine tune Enhancement
3 Fabs
7 Months
Rollout
2 Fabs
Rollout
JV Fabs
Rollout
Planning Collaboration
Change management
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Trend and Strategy
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From ERP to SCM to Supply Chain Collaboration
Supply Chain Collaboration

• help companies interact
• better with their customers,
• suppliers, and employees.
• Offered as hubs to support
• joint intra-enterprise and
• inter-enterprise planning and
• scheduling

SCM

• support the planning,
• scheduling, and fulfillment
• Allow cross-functional
• processes to coordinate
• activities across company
• departments

ERP

• Back-office functions alone
• Automate functional
• processes
• Ensure data consistency
• integrity
• provide a transactional
• backbone

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The History of ERP
Data source ??? MIC ITIS ??, May, 1999
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Business Application Evolution
Collaborative Commerce
Source Gartner
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Design/Engineering/Logistics Collaboration
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Total Supply Chain Management
Supply Chain Collaboration
Supply Chain Event Management
Order Management
ATP/CTP
Demand Planning and Forecasting
Multi-Site Production Planning
Multi-Site Production Tracking
Multi-Site Demand Capacity Allocation
Inventory Management
Production Scheduling
Material Capacity Planning
Operations Sequencing
Shop Floor Control
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e Foundry Hub Is Emerging

• On-line ordering, auction
• Consolidated buying
• Liquid market for surplus
• ( inv, spare parts, equipment)

• 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

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A Global Collaborative Commerce Web
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Web-Based B2B Transactions Should Skyrocket
( in billions)
Source Forrester Research.
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Global B2B Transaction Potential
( in billions)
109 CAGR
Source Forrester Research.
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Successful 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
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eFoundryTM Brings the Virtual Fab to Life
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Q A