Forward echelon-based inventory monitoring in semiconductor supply chain

As the semiconductor industry faces more and more fierce competition, it is essential for semiconductor supply chain to integrate front-end and back-end to provide better service to customers. In order to enhance the service levels and improve the performance of the whole supply chain, the front-end member (fab) is more effective in coordinating all members to share their information and synchronize their operations. As a result, the goal of this research is to develop a forward echelon-based inventory monitoring scheme based on the concept of echelon WIP inventory and CONWIP system. The first step in the proposed scheme is to construct a forward echelon-based model with the goal of minimizing the echelon WIP inventory control limits under target service levels. Next, this two-echelon model is solved by a proposed algorithm. The proposed scheme has been validated through simulation study. Based on the simulation validation results, conclusions are drawn as follows: 1) The proposed algorithm can derive the forward echelon-based WIP inventory limits effectively; 2) Compared to the traditional stage-based inventory monitoring scheme, the proposed forward echelon-based inventory monitoring scheme can obtain a higher service level with lower inventory levels.