Semiconductor products finds application in various industry verticals that requires digital technology embedded in their end products to enrich them with the ability to program, configure, connect to other devices, automate or provide extra features to delight the customers. Analog semiconductor application are also diverse such as in the field of power electronics, servo control application and energy. Some examples are machine control units in automobiles, smart mobile phones, and control units in industrial automations, robotics, solar energy etc.
With a wide range of application, semiconductor industry commands a business little more than $330 billion worldwide. Supply chain in the semiconductor industry is characterized by the price sensitivity, constant innovation, product complexity, collaboration with manufacturing partners and globalization of its value chain. The semiconductor product is not an end product by itself and is usually used to build one and hence its supply has a significant impact to the business downstream. Low margin in this business requires higher volume turnover for them to be in green. Competition and the above challenges forces the industry to emphasize on the customer delivery performance and service levels to their clients, who are from diverse segments in the market. They have to add value not only to the technology through innovation but also to the supply chain process by reduced cost along with reduced reaction time to demand.
Customer delivery function is identified as the priority one processes to sustain in the semiconductor business. It involves order capturing, calculating demand, delivery promising, tracking logistics till ownership transfer to customer and keeping customer informed. This is supported by the planning function to ensure service levels that reduces or prevent line down situations for their clients and maintain optimum inventory. The key performance elements of the customer delivery that depends on the supply chain are -
a. Reaction time to the demand. The ability to respond with promises or exceptions to the client.
b. Ability to meet the customer demand as per the schedule with negligible or no slippages
c. Real time status information availability. This is the ease of accessing status of inventory in terms of location, reservation and quantity.