1. Fordyce, Fournier, Milne, Singh Illusion of FAB Capacity in Central Planning – hunt for CAPAVAIL 1 The Ongoing Challenge - Tutorial The Illusion Of Capacity Incorporating the Complexity Of FAB Capacity (tool deployment & operating curve) into Central Planning for Demand-Supply Networks for the production of semiconductor based packaged goods with substantial non-FAB complexity Cycle Time Tax and the Operating Curve in steady-state start patterns part 2 of 4 Ken Fordyce & John Fournier, IBM Prof. John Milne, Clarkson University Dr. Harpal Singh, CEO Arkieva

2. Fordyce, Fournier, Milne, Singh Illusion of FAB Capacity in Central Planning – hunt for CAPAVAIL 2 Hunt for CAPAVAIL and the Operating Curve

3. Fordyce, Fournier, Milne, Singh Illusion of FAB Capacity in Central Planning – hunt for CAPAVAIL 3 Outline Overview of the Demand Supply Network for the production of semiconductor based package goods –Warring factions Decision Tiers –Aggregate FAB Planning –Central Planning Two major challenges –Planned lack of tool uniformity –Inherent variability Basics of Aggregate Factory Planning –Can this wafer start profile be supported –Near Term Deployment –WIP Projection Basics of Central Planning –Basic Functions –Historical emphasis on non-FAB complexity Alternate BOM for example –Handle FAB Capacity with limits stated as wafer starts Wafer start equivalents evolved to nested wafer starts –Second look at capacity (CAPREQ and CAPAVAIL) Linear methods in central planning engines FAB complexity creates miss match Operating Curve and Cycle time Tax

4. Fordyce, Fournier, Milne, Singh Illusion of FAB Capacity in Central Planning – hunt for CAPAVAIL 4 definitions CAPREQ - establishing a consumption rate for each unit of production by that manufacturing activity for the selected resource CAPAVAIL - providing the total available capacity for the resource. connecting manufacturing releases (starts) to resource consumption with a linear relationship

5. Fordyce, Fournier, Milne, Singh Illusion of FAB Capacity in Central Planning – hunt for CAPAVAIL 5 Two Major Challenges Planned Lack of Uniformity - not all tools for a manufacturing process have identical profiles: What operations they handle & their production rate Inherent - in the manufacturing line forces us to plan for unused capacity (tools ready to go, but idle due to lack of WIP) - Operating curve

6. Fordyce, Fournier, Milne, Singh Illusion of FAB Capacity in Central Planning – hunt for CAPAVAIL 6 CAPAVAIL, Cycle Time, & a Taxes Central & FAB Planning make two demand supply network decisions –quantity of wafer starts (explicit decision made by CPE) –committed cycle time (input to CPE) Typically cycle time is “fixed” and not linked to starts decision In fact committed cycle time influences capacity available –Longer cycle times, more effective capacity available –Shorter cycle times, less effective capacity available since capacity available influences starts, the two decisions (starts and cycle time are not independent –Shorter cycle time, less starts –Longer cycle time more starts use operating curve to link cycle time and effective capacity available via a cycle time tax

7. Fordyce, Fournier, Milne, Singh Illusion of FAB Capacity in Central Planning – hunt for CAPAVAIL 7 Operating Curve Trade off between –Output (starts) and cycle time Cycle time is often measured as a multiplier of raw process time (RPT) called cycle time multiplier (CTM) –Some times called XF (x factor – for multiplier) Cycle time = CTM x RPT

8. Fordyce, Fournier, Milne, Singh Illusion of FAB Capacity in Central Planning – hunt for CAPAVAIL 8 Trade-off between effective capacity available and cycle time For Blue Operating Curve to achieve a CTM of 5.00 Requires accepting Tool utilization of 80% Which Means 20% of your capacity has to SIT IDLE If you are willing to accept CTM of 6.0, then only 17% of your capacity has to sit idle Effective CAPAVAIL is 80% of “Raw” CAPAVAIL Effective CAPAVAIL is 83% of “Raw” CAPAVAIL IDLE IS TAX

9. Fordyce, Fournier, Milne, Singh Illusion of FAB Capacity in Central Planning – hunt for CAPAVAIL 9 Martin-Morrison Operating Curve – some basics Cycle Time Estimate Based on Utilization  CTM is the cycle time multiplier of raw process time (RPT) – measure of cycle time  util is tool utilization of the entity (expressed as a percentage) – facility, tool set, checkout clerks, etc.  offset represents several of aspects of the process that generate wait time that cannot be eliminated.  M is the number of identical parallel machines or servers. Typically this value ranges from 1 to 4  α represents the amount of variation in the system (arrival times, service times (including machine outage, raw process time (RPT), and operator availability)) and controls how long the curve stays flat. The lower the value of α the less variation and the longer the curve stays flat.

10. Fordyce, Fournier, Milne, Singh Illusion of FAB Capacity in Central Planning – hunt for CAPAVAIL 10 Martin-Morrison Operating Curve – some basics Utilization Required based on Cycle Time Decision  Utilization fraction of tool set required to meet cycle time commit Solve Previous Equation for Util Given a CTM target, calculate tool utilization required This drives idle without WIP

11. Fordyce, Fournier, Milne, Singh Illusion of FAB Capacity in Central Planning – hunt for CAPAVAIL 11 Capacity Available Tax Rate to meet cycle time commit  CAPAVAIL tax rate is required idle without WIP to meet cycle time target  If the cycle time target requires a 80% utilization, then the “tax” is 20%  If the raw CAPAVAIL is 100 units, then 20 units must be “set aside” to meet the cycle time commit  20% of the time the tool set should be ready to go, but idle no WIP where util is a function of the cycle time commit and the operating curve for tool set

12. Fordyce, Fournier, Milne, Singh Illusion of FAB Capacity in Central Planning – hunt for CAPAVAIL 12 Martin-Morrison Operating Curve – some basics Capacity Required Uplift Factor (ULF) to meet cycle time commit  Alternative is to place “tax” on capacity required (CAPREQ)  This is done with uplift factor  If util is 0.80, then the uplift factor is 1.25 (=1/0.8)  If core CAPREQ is 10, CAPREQ to account for required idle capacity is 12.5 = (10 x 1.25)

13. Fordyce, Fournier, Milne, Singh Illusion of FAB Capacity in Central Planning – hunt for CAPAVAIL 13 Martin-Morrison Operating Curve – some basics

14. Fordyce, Fournier, Milne, Singh Illusion of FAB Capacity in Central Planning – hunt for CAPAVAIL 14 Therefore effective Capacity Available depends on the cycle time commit relationship normally not a component of CPE formulations cycle time “decisions” are made prior to creation of the central plan in “off line” analysis and seen as an “estimate” of capability as much as a decision in aggregate FAB planning using algebraic methods incorporating cycle time tax is straightforward, but cumbersome Challenge is to incorporate this into the day to day central planning process where complications abound –example ramp up or ramp down of cycle time

15. Fordyce, Fournier, Milne, Singh Illusion of FAB Capacity in Central Planning – hunt for CAPAVAIL 15 “Tax” to cover variability High cycle time, low tax Low cycle time, high tax