Semiconductor Quartzware Strategic Sourcing Process
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Detailed plan with templates to conduct a Strategic Sourcing Project for Semiconductor Quartzware used in FABs. Potential Total Cost Savings 205 to 40%. The general process could be used for other consumable items as well.
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Semiconductor Quartzware Strategic Sourcing Process
- 1. Semiconductor Quartzware Strategic Sourcing Process Bill Kohnen Detailed Plan with Templates to conduct a Strategic Sourcing Project for Semiconductor Quartzware used in Fabs July 2013 Bill Kohnen
- 2. Overview • Quartzware is used in all Semiconductor Fabs in a variety of critical process applications • Generally considered a consumable item and while not a top item is significant and as a commodity item there is an opportunity to reduce cost • Total cost can also be reduced by addressing Inventory Management and Technical Approaches 30% 20%20% 15% 10% 5% Fab Consumable Spend Silicon Gas Chemicals maintenance Quartzware Clean Room Potential Total Cost Saving of 20% to 40% July 2013 Bill Kohnen
- 3. Potential Savings Levers and Targets Supply Based Opportunity Opportunity for Savings Best Case Negotiate Existing Suppliers no benchmarking >5% 20% Negotiate Existing Suppliers with benchmarking 5% to 10% Change among current Supplier 10% to 15% Qualify New Supplier 15% to 20% Inventory Reduction Opportunity for Savings Best Case Shared Inventory 15 % Reduction 45% Vendor stocking 15 % Reduction Increased use of repair 10% Reduction Improved handling proceedures 5% Reduction Technical Cost Reductions Opportunity for Savings Best Case Materials Substitution 10% 15% Process adjustment 10% Modify requirements for existing parts 10% July 2013 Bill Kohnen
- 4. Process 1. Gather information on total usage 2. Data Analysis 3. Preliminary Price Benchmarking 4. Review Opportunities 5. Full RFQ to Supply Base 6. Negotiations 7. Suppliers Selected 8. Regular review of Key Metrics July 2013 Bill Kohnen
- 5. Step 1: Gather Information Step 1: Gather Information on Total Usage From Sites Time Resources Required Contributors Items Purchased 3 Weeks Access to ERP Data Site Purchasing Unit Cost Detail Info from fab Site Operations/Inventory Suppliers AP Data AP 12 Month Usage Visit to sites Project Lead Inventory Level Conference Calls Inventorty turn Primary reasons for reorder Process Where used Supplier Performance Ceramic vs Quartz usage Repair Get actual payment information from AP Forecast usage July 2013 Bill Kohnen
- 6. Step 2: Data Analysis Step 2: Data Analysis Time Resources Required Contributors Category 2 Week Data Primarily Project Lead Supplier Con call to confirm and clarify Site Operations/Inventory Site AP Process Summary History Forecast July 2013 Bill Kohnen
- 7. Step 3: Preliminary Benchmarking Step 3: Conduct Preliminary Price Benchmark of Sample of Items Time Resources Required Contributors Small team 4 weeks Important to make actual visits Project Lead Identify sample of representative parts for quote ~ 5% to 10% of total Rep from each site Visit Current Suppliers Visit Potential Suppliers July 2013 Bill Kohnen
- 8. Step 4: Opportunity Identification Step 4: Present Opportunities to Management Time Resources Required Contributors Share Summarry Internal Data 2 Weeks Prepare Inforamtion Project Lead Share Preliminary Benchmark price data Access to Executive Team Exec team Discuss and get agreement on Sic vs Quartz, Inventory levels, repair process and also future shared metrics Also one or 2 team members Get buy in for next steps to include: Full RFQ Qualification of new sources as needed Assigning full Cross functional team including Purchasing, Operations, QA, Process Develop full RFQ including total requirements for quality, shipping, inventory, leadtimes etc.. July 2013 Bill Kohnen
- 9. Step 5: Full RFQ Step 5: Full RFQ Sent to Suppliers Time Resources Required Contributors 3 Weeks Prepare Inforamtion Project Lead Supplier Response Full Cross Functional team Supplier Questions Suppliers July 2013 Bill Kohnen
- 10. Step 6: Review and Negotiate Step 6: Cross Functional RFQ review and Negotiations Time Resources Required Contributors Cross Functional team detailed review 3 Weeks Meeting with Suppliers Project Lead Identify top responses to continue negotiation with QA as needed Full Cross Functional team Initiate full QA audit if needed for a potential new supplier Supplier Questions Suppliers July 2013 Bill Kohnen
- 11. Step 7: Selection Step 7: Suppliers selected and internal plans put in place 2 Weeks Resources Required Contributors Transfer Detail Responsibilty for transition to sites Full Team Transition details at sites July 2013 Bill Kohnen
- 12. Step 8: Review Key Metrics Step 8: Quarterly metrics and deep dive review annually Quarterly Resources Required Contributors Review Spend and Savings Meetings with Suppliers Project Lead Review Inventory Levels Data Preparation Site Reps Review Suppler Performance Review Status of Qualifications Review New requirements Review Forecast July 2013 Bill Kohnen
- 13. Templates For Process • Detail Summary for all Sites • Detail By Site • Summary By Supplier • Detail By Supplier July 2013 Bill Kohnen
- 14. Detail Summarry All Sites FAB1 FAB2 FAB3 Category # Items Annual Spend Inventory Level Value Inventory Turns # Items Annual Spend Inventory Level Value Inventory Turns # Items Annual Spend Inventory Level Value Inventory Turns Bell Jars Boat Holder Inserts Boat Holders Diffusion Boats Diffusion Tubes End Cap Epitaxial Systems Hanger Supports Lattice Trays Paddle Systems Pedestals Pull Rods Removable Baffles Sensor Sheaths Sleds Storage Tubes Tanks Thermocouple Sleeves Repair Total July 2013 Bill Kohnen
- 15. Detail By Site FAB1 Item Supplier Part # Description Process Where Used Unit Cost Annual Spend Inventory Level Value Inventory Turns Part Quality Supplier Performance Bell Jars Boat Holder Inserts Boat Holders Diffusion Boats Diffusion Tubes End Cap Epitaxial Systems Hanger Supports Lattice Trays Paddle Systems Pedestals Pull Rods Removable Baffles Sensor Sheaths Sleds Storage Tubes Tanks Thermocouple Sleeves Repair July 2013 Bill Kohnen
- 16. Summary By Supplier Supplier FAB1 FAB2 FAB3 Total Supplier Performance Applied ceramics Ferrotec Heraus LP glass Multilab Plansee St Gobain TGP Tosoh Untied Silica Wonik Others July 2013 Bill Kohnen
- 17. Detail By Supplier FAB 1 FAB2 FAB3 Item Part # Description Unit Cost Annual Spend Inventory Level Value Inventory Turns Part # Description Unit Cost Annual Spend Inventory Level Value Inventory Turns Part # Description Unit Cost Annual Spend Inventory Level Value Inventory Turns Bell Jars Specific part # Boat Holder Inserts Boat Holders Diffusion Boats Diffusion Tubes End Cap Epitaxial Systems Hanger Supports Lattice Trays Paddle Systems Pedestals Pull Rods Removable Baffles Sensor Sheaths Sleds Storage Tubes Tanks Thermocouple Sleeves Repair July 2013 Bill Kohnen