Case Study Summary
A global semiconductor company with revenue exceeding $10 billion faced critical operational challenges in managing supply chain planning during periods of high demand volatility. The company’s existing ERP-based planning system performed adequately when supply exceeded demand but failed significantly during demand explosion periods, unable to implement complex allocation rules or provide reliable customer commit dates.
The company needed a solution that could process thousands of daily orders automatically while providing accurate, dependable delivery commitments to customers across different tier groupings. By implementing Eyelit Technologies’ advanced supply chain planning solution with real-time ATP and CTP capabilities, the company transformed its order promising process to handle 3,500+ daily orders automatically, delivering significant improvements in commit date reliability, on-time delivery performance, and customer satisfaction while protecting against supply allocation imbalances.
The Company
The Company where Eyelit Technologies supply chain planning solution was implemented is one of the largest semiconductor companies in the world with revenue in excess of $10B. By deploying Eyelit Technologies, the Company has developed a well-integrated supply chain planning and optimization solution, with daily re-optimization such that the system automatically schedules commit dates to end customer in real-time based on up to date Available-To-Promise (ATP) and Capable-To-Promise (CTP). All orders are planned without planner involvement. If it is not possible to meet the customer’s initial request, it is re-planned, and the best commit date is offered automatically with no planner interception. Close to 3,500 new orders are processed per day both in real-time and batch.
After a commitment is made to each product group, by Technology or by Product, then the actual sales orders (work orders) will follow. Work orders arrive a number of times each day with a customer requested due date. The requested quantity is checked against committed quantity and a promised shipping date is then generated based on material and capacity availability. Traditionally, this is done based on the number of wafers and/or units (in the back-end processes).
Pain Points Before Eyelit Technologies Deployment
During Demand Explosion Challenges
- Planning Process Control Failure: The Company’s ERP-based planning system worked very well when supply > demand but failed in many respects when demand > supply
- Rule Implementation Limitations: Unable to adequately implement Company’s rule sets/characteristics to implement desired allocation/planning rules
- Pre-allocation Support Gaps: Needed scheduling to support pre-allocation of supply to different customer/tier groupings
- Commitment Volatility: Needed to avoid pushing out commitments to orders (due to supply side variability and customer/channel reprioritization)
- Their customers needed a date they could count on, even if they didn’t like the date
Supply Allocation Issues
- Commit Date vs Request Date Problems: Needed to allocate supply to demand based on commit dates, not request dates
- i.e. Improve request dates if supply picture improves, orders cancelled, etc.
Eyelit Technologies Solution
Availability Pool Management
- Offered pools of availability: In constrained supply environments, pre-allocate supply by a set of business rules (customer tiers and/or groupings)
- Supply Protection: Protect the Company from one customer or tier coming in and scooping all the available supply
Advanced Re-Planning Capabilities
- First Commit Date Scheduling: Reschedule first to First Commit Date using all supply, then improve (if possible) to Customer Request Date within the allocated supply
- Performance Improvements: Improved On Time Delivery performance to First Commit Date
- Schedule Stability: Reduced volatility in schedule dates
Flexible Rule Implementation
- User-based ATP/CTP Rules: User-based rules for ATP/CTP ‘easy’ to deploy into Eyelit Technologies and change as needed
System Integration
Real-time ERP Integration
Real-time integration to ERP via middleware was key to success for the project. Data elements integrated between SAP and Eyelit Technologies (all real-time):
- Materials Management
- Sales Order Processing: Includes characteristics that define allocation bucket. Order placed in SAP looks for availability in Eyelit Technologies, returns dates and quantities
- Inventory and Transfer Planning: Transfer plan decremented in Eyelit Technologies as inventory is received into FG. Automatically initiates re-planning
- Shipment Processing: Inventory reduced as shipment made
- Automated Re-planning: Rescheduled dates from Eyelit Technologies picked up and processed in SAP. Automatic replanning of materials based on data changes (new transfer plan, receipts to inventory, order priority change, etc.)
System Environment Integration
Eyelit Technologies was integrated to both the ERP system’s Order Entry as well as the MES system to receive real-time status of WIP for more accurate order commitments. As orders come into Eyelit Technologies from the ERP Order Entry, they are planned and commit dates are sent back to Order Entry and their customers.
Additional Benefits for the Company
Commit Date Improvements
- Highly accurate and reliable commits to their customers
- Use of capacity not Pseudo Package code forecasts
- Move from Forecast netting to true supply availability
- Recognize available WIP and Released Supply
Attribute-Based Planning Benefits
- More accurate ATP dates (Subcon, manufacture date)
- Enable future ability to add additional rules as the conditions change using attributes as desired
- Remove the need for substitution matrices, unnecessary product proliferation
- Notable Reduction in SKU
Batch Re-planning Capabilities
- Improve Supply Demand alignment
- Eliminate the need for single order requests to improve
- Automate the process of selected improvement to Customer Requested Date (CRD) while preserving Current Schedule Dates (CSD)
Results
The implementation of Eyelit Technologies’ real-time order promising solution transformed the company’s ability to manage complex semiconductor supply chains during demand volatility periods. The system now automatically processes close to 3,500 new orders per day without planner involvement, providing customers with reliable commit dates they can depend on. The solution’s advanced allocation rules and pools of availability prevent any single customer or tier from monopolizing supply, while the real-time integration with ERP and MES systems ensures accurate, up-to-date order commitments based on actual capacity and material availability.