4-4-06 Semiconductor Production Planning

4-4-06 Semiconductor Production Planning - 04/06...

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Production Planning 04/06 Semiconductor Semiconductor Production Planning Production Planning Rob Leachman University of California at Berkeley April 4, 2006
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Production Planning 04/06 Agenda Industry background Elements of production planning Basic planning techniques IMPReSS planning system at Harris Corp.
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Production Planning 04/06 Background Evolution of competition in the semiconductor industry: – Proprietary designs –Price – Quoted lead time – On-time delivery ("customer service") Increasing need to improve delivery quotation and production scheduling
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Production Planning 04/06 Background (cont.) Evolution of manufacturing network: – State-of-the-art production facilities now cost billions of $, located around the globe – Cycle times to build products are now 2-3 months – 5,000 - 100,000 finished goods – Demand forecasts are prone to error Increasing need to control and direct manufacturing network
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Production Planning 04/06 Legacy practices Internal manufacturing network run much like a supply chain Multiple planning groups (e.g., marketing, central planning, factory planning) exercising local control Limited information exchange between local systems. Negotiations required to achieve a plan – slow and infrequent planning cycles – considerable judgment and uncertainty involved
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Production Planning 04/06 Trends in performance • Most firms in the industry in last 5-10 years have improved on-time delivery percentages from 70s to 80s • A few have improved to high 90s by making fundamental changes • • Formal, mostly automated planning system • • Frequent and swift re-planning of entire supply chain • • Organizational change away from multiple planning groups to single organization maintaining the data and procedures of the formal system
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Production Planning 04/06 On-time delivery 100 01 23 4 > 4 -1 -2 -3 -4 < - 4 Shipment week minus quoted week % of line-item shipments (1H90) 50 Company F1 Company F2 ARE YOU SELLING A LOTTERY OR A SERVICE?
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Production Planning 04/06 What makes planning hard • Factory capacity is uncertain and complex • Yield and cycle time is uncertain • Demand is uncertain • Should we wait for an order or build to forecast? • Binning, substitution, alternative source products • Decentralization of planning, lack of information and incorrect information
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Production Planning 04/06 Two types of planning cycles Incremental planning cycle: add new demands to production plan without adjusting the rest of the plan Full regeneration or batch planning cycle: re-plan everything • Companies with limited capacity and a variety of products perform batch planning cycles to allocate capacity efficiently • Incremental planning cycles are used to plan build-to- order products without waiting for next batch cycle Both kinds of planning cycles can be done in same company
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Production Planning 04/06 Basic Planning Concepts: The Production Planning Cycle Elements of the production planning cycle: Quantify and prioritize demands
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4-4-06 Semiconductor Production Planning - 04/06...

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