Managing variability in the semiconductor supply chain

Within the semiconductor industry, the variability in both supply and demand is quite high; this uncertainty makes supply chain planning very difficult. We analyze the current tools and processes at a large semiconductor manufacturing company and then propose a framework for improvement based on hierarchical production planning. We present an appropriate decomposition for this specific planning problem and illustrate some limitations of traditional inventory models. New safety stock equations are developed for this planning problem based on a simple analysis using the basic ideas from probability theory. We also devise a new method to determine lead times that more accurately captures the actual lead time seen in the supply chain. Finally, an algorithm is developed to determine appropriate inventory levels and production allocation. These ideas, when used together, provide a powerful framework to properly manage supply chains in highly stochastic environments.

Department dc:contributor.department

Massachusetts Institute of Technology. Engineering Systems Division.

Grantor dc:publisher

Massachusetts Institute of Technology

Year dc:date.issued

2005

Author dc:creator

• Johnson, Jeffrey D. (Jeffrey David), 1979-

Advisor dc:contributor.advisor

• Stephen C. Graves.

• Engineering Systems Division.

Statement dc:rights

• M.I.T. theses are protected by copyright. They may be viewed from this source for any purpose, but reproduction or distribution in any format is prohibited without written permission. See provided URL for inquiries about permission.

Licence dc:rights.uri

• http://dspace.mit.edu/handle/1721.1/7582

Language dc:language.iso

en_US

Handle dc:identifier.uri

http://hdl.handle.net/1721.1/28926

OAI identifier oai:identifier

oai:dspace.mit.edu:1721.1/28926