Repetitive manufacturing in the semiconductor industry
"The number of transistors in an integrated circuit will double every 18-24 months leading to an exponential growth in the number of transistors" – Gordon Moore
This famous observation known as "Moore's Law" is valid nearly 40 years after Gordon Moore first published his paper in 1965.
Due to the rapid growth in technology and the need to manage huge volumes of data, the semiconductor industry has witnessed a massive growth in the performance to cost ratio. In the semiconductor value chain, the manufacturing stage contributes 55% to 80% of the value. Consequently, establishing control and effectiveness over the manufacturing process is a business imperative. It keeps the unit chip prices relatively stable and reduces marginal cost.
The high impact processes are Wafer Manufacturing and Assembly and Testing. Wafer Manufacturing is a highly technology-driven process and constitutes about 45% – 50% of the total cost. Assembly and Testing take place after Wafer Manufacturing. Once the test part meets the quality requirements, it becomes a finished component: The IC chip. ERP systems help control and manage the manufacturing processes in a systematic manner
SAP's Repetitive Manufacturing module handles operation and product cost control in semiconductor chip manufacturing. Since it is a process of mass production, standard production BOM along with rate routings can be used. Constituent components can be included in the material BOM at each stage (normally a semiconductor manufacturing has four stages – fabrication, sort assembly and test) along with direct materials. Similarly, rate routings can be maintained with the operation and activities defined for each operation. These activities may include labor cost, overhead cost to name a few. The functionality of reporting point at an operation can be adopted to arrive at unit consumption and activity cost. The back flush functionality can handle assembly, component and activity back flush (also referred to as yield back flush) with reversal. The process scrap can also be handled by the same functionality. The repetitive profile maintained in the material master dictates GI/GR back flush, reporting point back flush, error handling, movement types, etc. The linkage to product cost can be established by maintaining a product cost collector for material and site (Plant) combination. Typically, this results in the creation of a CO order in the background. The material movements and activity posting can all be captured against the product cost collector as a CO object. This data can then be further used to calculate the standard price of the semi-finished goods and finished components.
SAP provides a seamless integration of production planning and shop floor control with product costing per process stage. It ensures continuity in material and constituent part consumption, activity consumption and any other overhead/cost consumption over various stages of semi-conductor manufacturing. The costs can be captured accurately at each stage per product. It will help to accurately value the inventory, particularly WIP which for most of the time is difficult to calculate due to the constraints in semiconductor manufacturing. SAP Product costing helps in the precise calculation of standard price of FG components, helping you arrive at the exact margins.
Rhishikesh Andhari is a SAP Senior Consultant at Infosys. He has over six years of experience in Manufacturing and four years in SAP consulting. He has partnered with clients in High-Tech.
Currently, Rhishikesh is working as a Logistics Lead at a major semiconductor company. He has been involved in SAP roll out projects for service repairs at one of the leading companies in PC manufacturing. On this project, he worked on a SAP PS implementation project for business processes covering project planning, budgeting and procurement in setting up retail stores worldwide. He has worked on a Customer Information Management project at another semiconductor manufacturing company. It involved streamlining of SAP customer master database, establishing a governance model and authorization procedures.
Prior to SAP consulting, Rhishikesh worked at a leading paint manufacturing company in Project Management, Operations, Plant Maintenance and Procurement.
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Self billing for the Auto Industry: A practitioner's perspective
This session highlights the key process and design considerations of the SAP self billing solution for NA suppliers, where the order to cash business process demands payment automation using self billing documents and remittance advice.
Self billing invoicing enables customers to bill and remit payments electronically. Learn how to set up SAP self billing process for NA industry requirements and reduce overheads.
- Challenges in effective utilization of self billing process
- "Pay as you go pricing" model converts fixed costs to variable costs
- The best practices and customization inputs for self billing
- Role of self billing process in better cash application management
- Design considerations while customizing solution for your local requirements
Harpreet Singh Kohli is a consultant at Infosys' SAP Practice. He has four years of SAP experience in the automotive industry, including sales and distribution processes focused on AR processes such as self billing and retrobilling. Harpreet holds a bachelor's degree in engineering and post graduate degree in management.
Murugesan Kandasamy is a senior consultant with Infosys' SAP Practice. With eight years' SAP experience and 12 years' experience in the automotive industry, he focuses on facilitating solutions using SAP components in supply chain management and logistics. Muru has been working for Global SAP programs for different automotive clients.
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Key considerations for ePedigree implementation
The pharmaceutical industry has been incurring huge losses from counterfeit drugs and diversions. Pedigree regulations in the US attempt to govern the supply chain to minimize these. The regulations will only become increasingly demanding in the future.
Several states in the US have adopted pedigree legislation that requires a healthcare and life sciences company track and record via document trail (Pedigree) shipments of products which meet certain conditions.
Key challenges for a successful Pedigree implementation using SAP
- Complex business processes / legal scenarios
- Pedigree format standards
- Track and trace technologies, and solution providers
Key takeaways from this session
- Pedigree environment and requirements for healthcare and life sciences industry
- Understanding the technologies to be used for Pedigree implementation with SAP as ERP package
- Key considerations in successful implementation of the Pedigree solution
Anup Das is a consultant in the SAP practice at Infosys for three years. Anup has eight years of experience out of which four years were spent in SAP SD module with two end-to-end implementation experiences at Infosys. In the last one year, he has been involved with Florida and PDMA pedigree implementation for a US based client.
Prior to Infosys, Anup has spent five years with the largest automotive ancillaries company of India. He has worked on legacy system support, sales co-ordination and ERP implementation.
Anup is a SAP Certified Solution Consultant Supply Chain Management – Order Fulfillment with mySAP ERP 2005.
Learn more about Infosys
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