Supply Chain Management at a Chip Tester Manufacturer

Abstract

We developed a linear programming based tool for managing the supply chain of a company that manufactures computer chip testers. These testers are used by the makers of computer chips to test their quality. Long leadtimes, significant yield losses, and capacity restrictions, problems that are ubiquitous in semiconductor manufacturing, were also present in this supply chain. The complexity of the supply chain was preventing this company from efficiently managing the material flows. In addition, it was difficult to react, quickly and effectively, to (i) changes in customer demands, (ii) yield losses at a supplier, (iii) equipment breakdowns, etc. To overcome these difficulties, we developed an analytical tool that maximizes the profit while taking into consideration customer requirements, lead times, yields, capacity restrictions, and WIP inventories in the supply chain. The results were significant savings in planning time and the ability to react to uncertainties.