Modeling supply contracts in semiconductor supply chains
Proceedings of the 2011 Winter Simulation Conference (WSC)
Semiconductor manufacturers face high demand uncertainty due to volatile and rapidly changing technology development as well as inaccurate customer forecasts. The paper first presents a description of contract clauses used in semiconductor supply chains, obtained through a literature review and a field study. The paper then presents a review of the literature on studies in supply chain contracts focusing on flexibility contracts and capacity option contracts. Finally, the paper presents models
... er presents models to study contract flexibility and capacity reservation options for a semiconductor manufacturer supplier and a buyer. The purpose of the models is to compare a representative standard flexibility contract currently used in semiconductor supply chains and a capacity options contract. 2113 978-1-4577-2109-0/11/$26.00 ©2011 IEEE Knoblich, Ehm, Heavey, and Williams case study semiconductor manufacturer. This is followed by Section 3 which provides a short review of past studies on contracts with flexibility clauses and capacity option contracts. Section 4 provides a description of models proposed for SC contract analysis. Finally, conclusions and further work are described. FIELD STUDY To understand better the contract clauses used in the semiconductor sector, the contract clauses used in a case study company were documented and mapped onto classifications found in the literature. In Tsay, Nahmias, Agrawal, Tayur, Ganeshan, and Magazine (1999) a classification of contract clauses used in SC is described. In the case study company contract clauses given in Tsay, Nahmias, Agrawal, Tayur, Ganeshan, and Magazine (1999) were observed, such as, decision rights, pricing, minimum purchasing commitments, quantity flexibility, buyback or returns policies, allocation rules, lead time and quality. Further clauses were also found in the case study company such as, demand signal, rescheduling, stock and run rate. Products in the case study, as typically found in the semiconductor sector, were classified into Commodity, Application Specific Standard Products (ASSP), Customer Specific Products (CSP) and End of Life (EOL) products. Below is a summary of contract clauses found in the case study company, used across the different product types, to govern the operation of the SC between buyer and seller.