Supply chain inventory control in semiconductor manufacturing

As the semiconductor industry faces more and more fierce competition, it is essential for semiconductor supply chain to integrate back-end and front-end to provide better service to customers. This research develops a semiconductor supply chain monitoring scheme based on the concept of echelon WIP inventory and CONWIP system. The first step in the proposed scheme is to construct a two-echelon model with the goal of minimizing the echelon WIP inventory control limits under target service levels. Next, this two-echelon model is extended to a multi-echelon model. The proposed scheme has been validated through simulation study. Based on the simulation validation results, conclusions are drawn as follows: 1) The proposed scheme can derive the multi-echelon WIP inventory limits effectively; 2) Compared to the traditional stage-based inventory monitoring scheme, the proposed echelon-based monitoring scheme can obtain a higher service level with lower inventory levels.