Strategic Capacity Planning Article Presentation (Tracie) Introduce Team Formal Greeting/Icebreaker November 29, 2010 Kevin C. Barker, Tracie Butcher, Eric Chancellor, Chris Craig, and Diane Fenstra

Agenda Background Concept Analysis Conclusion (Tracie) Present Agenda

BACKGROUND (Tracie) Introduce Chris (Chris) Introduce Topic “Background” BACKGROUND Chris

Week Four Objective Evaluate Factors that Guide Strategic Capacity Planning Semiconductor Manufacturing Industry Article (Chris) One of the week four objectives is to evaluate factors that Guide Strategic Capacity Planning An article written by Na Geng and Zhibin Jiang from China review strategic capacity planning for the semiconductor manufacturing industry. Author’s reason for the research was to illustrate the importance of strategic capacity planning in the semiconductor manufacturing industry due to high capital investment costs Chris

(Chris) Introduce Eric (Eric) Introduce Topic “Concept” CONCEPT Eric

Strategic Capacity Planning Definition Article Authors Textbook Team (Eric) – Authors define strategic capacity planning as “the determination of the sequence and the timing of tool purchases and, possibly, retirements, which is a multi-criteria decision-making process involving trade-offs among finance, throughput, cycle time and risk” (p. 3639). Textbook definition – “provide an approach for determining the overall capacity level of capital-intensive resources – facilities, equipment, and overall labor force size – that best supports the company’s long range competitive strategy” (p. 431). Simple definition (team’s interpretation) – plan that allows a firm to locate and input resources at the right time to determine the capacity of manufacturing the firm’s product. Eric

ANALYSIS (Eric) Introduce Kevin (Kevin) Introduce Topic “Analysis” The article talks about strategic capacity planning within the semiconductor manufacturing industry, presents challenges to strategic capacity planning, and provides methods/models in strategic capacity planning for firms to follow. ANALYSIS Kevin

Challenges Complex fabrication process Rapid changes in technology and products Long lead time and high cost of capacity increment High uncertain demand and capacity (Kevin) – Challenges in capacity planning within the semiconductor industry include the following four issues: - Complex fabrication process - Rapid changes in technology and products - Long lead time and high cost of capacity increment - High uncertain demand and capacity Kevin

Capacity Planning Models/Methods Static capacity model Neighborhood search methods Simulation-based methods Methods based on the queuing model Mathematical programming methods The LP Model The SP Model Other Methods (Kevin) – For the purposes of brevity, we will not explain in depth these models. Our intent here is to simply list different capacity planning models in existence according to article authors. These models help organizations formulate and develop strategic capacity plans within the semiconductor manufacturing industry. - Static capacity model (analysis using spreadsheet) - Neighborhood search methods (find a better decision than current one within current decision level) - Simulation-based methods (create a simulation to test; accurate, but takes lots of effort, time and energy) - Methods based on the queuing model (estimates performance of tool procurement planning) - Mathematical programming methods (capacity extensions) - Linear programming (LP) model (corporate capacity planning model) - Stochastic programming (SP) model (demand uncertainties – probability approach) - Other methods Geometric Brownian motion process Optimal control theory approach Continuous-time strategic capacity planning model Economic decision model Kevin

CONCLUSION (Kevin) Introduce Diane (Diane) Introduce Topic “Conclusion” CONCLUSION Diane

Review Strategic capacity planning objective Semiconductor manufacturing example Value Final thoughts (Diane) – Strategic capacity planning is one of the learning objectives for Week Four The article provides a good example of different models/methods to help firms improve and implement strategic capacity planning within the semiconductor manufacturing industry. Firms can also adapt these methods/models for different industries. The value of strategic capacity planning relates to profit. Organizations who understand their manufacturing capacity and develop strategic plans that maximize capacity output are better able to reduce costs and make money. Strategic capacity planning is vital within all manufacturing realms, but more so in industries with high capital investment costs such as high tech industries like the semiconductor manufacturing example. Our team feels that this article provides a good focus on the importance of strategic capacity planning and we have a better understanding of the importance of strategic capacity planning within the manufacturing world. Diane

QUESTIONS? (Diane) – mention comic (Team) – answer questions, receive feedback Team

References Chase, R. , Jacobs, F. , and Aquilano, N. (2006) Operations management for competitive advantage. (11th ed). New York: McGraw Hill/Irwin. Retrieved November 18, 2010 from University of Phoenix Student Online Resource Forum, Course Materials Section. Geng, N. and Jiang, Z. (2009, July). A review on strategic capacity planning for the semiconductor manufacturing industry. Retrieved November 23, 2010 from University of Phoenix Online Resource Library – EBSCOHost. Photos. (2010). Miscellaneous presentation photos. Retrieved November 23, 2010 from http://www.google.com/images. Reference list for presentation

Team Matrix RESPONSIBILITIES Team Member - 1 Name: Tracie Individual Responsibilities & Roles RESPONSIBILITIES 1.Writer / Researcher 2. Integrator 3. Grammar/Spell Checker 4. APA Reviewer 1 Team Member - 1 Name: Tracie X 2 Team Member - 2 Name: Diane 3 Team Member - 3 Name: Kevin 4 Team Member - 4 Name: Chris 5 Team Member - 5 Name: Eric Team Matrix