Excellence in Manufacturing Execution and Customer Response
The semiconductor industry today is being revolutionized. But unlike other changes
in the industry, such as larger wafers or new lithography tools, this revolution
is not only about technology but also about how companies need to do business.
Staying competitive requires that companies change both their business and operations
practices to stay ahead of the competition. Shorter time-to-market, higher scheduling
ability, better profit margins, higher number of products and product developments,
and of course minimized costs together with top quality are essential.
The successful semiconductor manufacturer has to accommodate these complex, sometimes opposed and contradictory, requirements to fulfill the customer demands as well as to ensure their own profitability. In all this, enabling a highly flexible and visible manufacturing and enterprise strategy plays a major role.
Semiconductor firms are also increasingly finding that they must be involved on a timely basis with not only their own business but their customer's business as well. Integrated circuits (IC) companies must provide their products and services to customers quickly and with the highest quality while reducing the turnaround time between order and delivery. Customer responses are fast becoming real-time, and timely manufacturing and delivery becomes a worldwide concern.
Few systems deliver such information for any of the semiconductor manufacturers. Shop floor management (SFM) solutions, such as Oracle's, help semiconductor companies in achieving excellence in manufacturing execution and customer response. They achieve this through adoption of a flexible, integrated information system that sees a company as a single entity worldwide. SFM solutions provide extended shop floor control by providing real-time status information on work orders, support for advanced shop floor WIP (work in progress) transactions, dynamic routings, reduced lead time, detailed lot tracking and many other capabilities. This enables fast manufacturing turnaround to the customer through a real-time system that looks worldwide at all possible sites for wafer capacity, assembly and test, and inventory/distribution, and links these, also in real-time, to global supply-chain planning.
This convergence of customer responsiveness along with manufacturing excellence is clearly an effective way to add new customers, build the revenue base, and increase throughput above and beyond heavy capital investment in new fabs and equipment. Many customers use this convergence of customer responsiveness and manufacturing excellence as a key differentiator for their positioning in the semiconductor industry.
Semiconductor Industry — Current State
The rise of global competition and improvements in technology is enabling companies to break away from an insular approach to manufacturing and be more responsive to customers. These developments have raised the stakes for IC manufacturing by putting new emphasis on reduced cycle times, and increased product yield in addition to advancing process technology. However, the core of this revolution is the supply chain requiring visibility of products being manufactured at shop floors worldwide, and complete integration of demand and order entry with all manufacturing execution systems (MES). This virtually puts the customer interests directly onto the fab floor, which then fans out to every downstream member of the chain. It puts an end to older stand-alone supply chains that supported local make-to-plan fabs, and rarely had real-time visibility in company's global operations. This revolution is also redefining customer relationships by including up-to-the-minute information via the Internet on order status, yield, quality and costs in addition to commitment on delivery. In addition, semiconductor manufacturers expect this data to be timely since market, demand and supply events cannot wait for batch updates that are often too late for an appropriate response. To provide this capability, today's business environment requires a single repository for business and production.
These requirements make the integration between corporate enterprise and manufacturing the cornerstone for future success. Most semiconductor companies use MES from a third-party vendor but not all sites within a single company use the same MES supplier. In fact, it is common to find that fabs may also differ on toolsets used, and other data collection systems for test, yield, business and quality analysis. It is imperative then that a product be able to transgress such disparities as serial flows, batch and discrete processes, and variances in tools bringing them together in a simple and effective manner. To bridge this gap between ERP and disparate MES systems requires a methodology that addresses differences in routing, shop floor transactions handling, "lifecycle" or "end-to-end" product genealogy of products, yield-based operations costing, and WIP. All of these are included in SFM. But why are they so important?
Traditionally, enterprise software has managed production costs and computed manufacturing targets but was never intended to have lot genealogy or lot tracking capability. Even within the fab specialized data, material control (MCS) or document management (PDM) systems (often unique to that fab) may handle changing product specifications and lot process instructions but not always follow variations in lot routing and recipes so such information is still left un-automated. MES systems often facilitate lot movements but are ill equipped for special dispatching to keep equipment utilization and WIP volume high. What exists presently are local, co-existing systems such as MES, MCS, PDM and ERP that independently collect and analyze particular sets of fab data with little collective interaction. Each has its important role to fill and is important to fab management. Currently, global allocation of resources and transactions, intra-fab capacity planning, sophisticated lot moves, product binning, and automated dispatching are beyond the capabilities of such systems. However, since most are well ingrained into the production processes, fabs will be reluctant to replace them. These software tools are still important to existing semiconductor business. What is needed is a new approach that optimizes these tools but not at the expense of interrupting production.
SFM — A Killer Application
SFM meets this need by understanding that MES and ERP systems are interdependent and must work with each other to satisfy customer demand. Integration is necessary to track occurrences in the fab that will impact the entire supply chain process. Events such as bottlenecks (i.e. a lack of key pieces of equipment due to downtime), lot mis-processing, re-routing of lots, customer demand changes, or unexpected fab downtimes are all "supply-chain sensitive" events that affect both customer and manufacturer. The core capabilities within SFM have been designed to handle exactly these kinds of events. They easily fit with standard MES systems from many reputed vendors systems to vertically integrate multiple fabs at different locations at an enterprise level using real time data. These modules also provide the ability to input customer orders directly onto the "shop floor" (i.e. fab), do costing/operational yield analysis, and reduce inventory and working capital. In addition, SFM compliments existing systems so replacement of current MES infrastructures under most cases is not required.
The impact of SFM can be seen clearly in an example from a recent installation at a major semiconductor manufacturer. This customer projected that the total time from customer order entry to delivery (to the customer) was 95-146 days. Even a theoretical model, which assumed that initial testing of the customer design was not required as it was a re-order, estimated that about 24 days would be needed with no front-end order processing. Using SFM, the entire process reduced to less than 7 days with no initial design qualification. The order process cycle alone predicted to be about two weeks long became a succinct 15 hours. Clearly, all of this included order entry of the customer's latest demand, match to global capacity, identification of which factory was optimal for this order, and input of the order into the specific factory build schedule. This completed in less than a day. All of this is valuable today not tomorrow.
In summation, the key to better planning, increased profits, and strong customer partnerships within the semiconductor sector over the next decade will depend on a strong, global supply chain and integrated execution systems. As the market evolves to a make-to-demand economy, successful companies will have optimized enterprise and manufacturing infrastructures over all of their manufacturing and distribution sites. This puts the ERP/MES interface at the center, and all progress in this area for any firm must begin there. The SFM platform is an excellent place to start.
Business Values Derived From SFM
SFM, as part of Oracle's E-Business Suite, is a single vendor solution that either provides comprehensive shop floor functionality as well as enables the integration of third-party MES packages. Customer and shop floor transactions are captured in a single repository, facilitating customer demand and supply synchronization, supply chain planning and analysis. For some customers, SFM also provides a part of MES functionality, thereby enabling them to even remove their old MES. If manufacturing operations, however, require a third-party MES product, SFM provides hooks into its functionality via APIs, mirroring shop floor transactions within ERP in real time. Oracle's SFM is a standard software package, eliminating the need for custom MES solutions or minimizing the effort of designing and integrating MES systems with the Oracle ERP environment.
Meanwhile, the semiconductor industry has, in recent years, gone through a paradigm shift that has grown beyond the capabilities of traditional manufacturing. One of the major shifts relates to customer intimacy. Customer intimacy means having a real-time, accurate perspective of the enterprise at any given moment. Several examples portray this perspective. The salesperson is now required to give on the spot accurate information about his/her customer's manufacturing lots and their status. Semiconductor companies' customers are requiring detailed information about whether their lots went through certain pre-qualified manufacturing facilities/equipment. Production planning managers need genealogy snapshots to proactively isolate potential problems due to faulty lots moving downstream and spreading through the manufacturing space. SFM is a collection of enhancements to applications that fulfills and enables each of these scenarios and more. By the simple act of allowing the integration of the data at each shop floor back to the enterprise, SFM enables the synchronized and event-driven enterprise.
Process transparency and data sharing in the design house/foundry model are a significant step towards better managing the supply chain for the semiconductor industry. For the fabless company, this equates to being able to readily access data pertinent to them from their foundries. Although transparency of data may not be the major roadblock here (these were made available through technologies such as EDI), there certainly can be improvements made in the speed and accuracy of the data. SFM permits the fabless company to receive data from their foundries on a real time basis.
For the semiconductor company that owns the privilege and responsibility of having its own manufacturing facilities (i.e. fabrication), SFM strives to achieve real-time synchronization across the entire corporation at any given time. This means that for the innovative market leader who owns multiple front end facilities and multiple assembly and test facilities spread out around the world, a user based at headquarters in the U.S. is able to have adequate visibility into every aspect of manufacturing for a given sales order. The sales person is able to respond in real time to a customer about the status of his/her order, and also is able to commit with confidence to any change in demand the customer may require. In the semiconductor enterprise, Oracle E-Business Suite strives for corporate-wide manufacturing synchronization and a level of transparency throughout demand to fulfillment, which facilitates better customer care and, ultimately, intimacy. SFM is the cornerstone to data synchronization, an IT aspect of infrastructure that is essential in succeeding with such a model.
SFM Functional Specifications
SFM is a package of extensions to core manufacturing in Oracle's E-Business Suite. These extensions include extensive modifications to the WIP, BOM (bill of materials), inventory, and cost management modules. Figure 1 describes an overview of the added features made available through SFM.
Figure 1: SFM Functional Specifications
Summary
SFM, such as Oracle's shop floor management solution, is a tool that can significantly increase profits and lower operating costs. High equipment utilization is fine but it is not a substitute for timely market response. No IC producer or foundry can afford not to transition itself into a worldwide, e-business company because the competition will. The old methods and information infrastructures are no longer satisfactory. Maintaining them is costly, manpower-intensive, and time-consuming. Simply adding equipment to make profit is no longer optimal. Internal strategies based on extensive runs and large inventories are things of the past. External, customer-centered strategies focused on short runs on a wider mix of products with quick turnarounds based on customer demand is the new paradigm. The economics are changing and success in the future semiconductor marketplace will belong to those who are prepared.
