What's Missing in Traditional ERP Inventory Systems for Semiconductor Manufacturers?

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Traditional ERP inventory systems are invaluable to thousands of manufacturing companies worldwide.  But for semiconductor manufacturers? Forget about it!

It's not that traditional ERP Inventory systems don't work.  They just aren't designed to fit the processes that are at the heart of fabless semiconductor production. Fabless companies have tried for years to make these traditional systems fit their needs, but this is much like trying to force your left foot into your right shoe. You may be able to jam it in, but it won't be comfortable or highly functional . . . and you won’t be able to walk very straight once the shoe's on the wrong foot.

Luckily, the things that are missing in traditional ERP inventory systems are the core strengths of the Tensoft Fabless Semiconductor Manufacturing product - Tensoft SemiOps. Let’s take a closer look.

Take genealogy or process history tracking, for instance. Traditional ERP Inventory functionality simply does not provide genealogy tracking. Fabless operations typically need to track their entire process history, mapping every step the product has been through, including re-work. For each production step, you need to know the process completed, the vendor used, the procurement and production information -- plus all of the key attributes collected. Once you have this genealogy attached to a product, fabless operations typically need complete forward and backward tracking by genealogy from the production process to the customer and back (returns).

Tensoft SemiOps tracks and saves a complete, auditable process history of every vendor and production step, including detailed product and production information by individual step. Every part has full genealogy associated with it at all times.

Specific product identification by lot number or date code offers yet another challenge. Most traditional ERP systems only offer lot tracking or serialization – with only one tracking number associated with the part.  Fabless companies mark their product with more than one key tracking attribute – often using a fab lot number and date code. Lot splits and lot merges add more complexity, which makes it even more important to accurately collect the individual tracking attributes for your product.

Tensoft SemiOps tracks wafer lot, vendor lots, and internal lots at every step of the production process. In fact, our customers can maintain and track complete lot histories, with product identification and process genealogy for both forward and backward tracking. Lot splits and merges are also fully supported.

Fabless companies need to track detailed product attributes during the production process. Examples include: the test program used, the test board, the mask set, an internal lot number, and the assembly lot number. This is well beyond the capabilities of more traditional manufacturing systems. With Tensoft SemiOps, an unlimited number of production attributes can be tracked and used for detailed analysis.

Traditional ERP Inventory systems offer no solution for maintaining a process cost history, and they fail to support semiconductor product costing and inventory earned value requirements.  With costing complexities and unique requirements that are unlike any other type of product, fabless operations typically need to maintain a complete cost history by production process step. They also need to understand standard and actual cost, yield and detailed cost variances – all by production process step.

Tensoft SemiOps supports standard cost variable support. Cost per production step can include input materials, consumed materials, overheads and vendor costs. Each cost is stated appropriately for variance analysis and cost history.

Traditional ERP Inventory systems cannot do reclamation handling, which allows previously discarded materials to be brought back into the system.  Fabless operations often need a system for reclamation of previous yield loss, or bonus. They need the ability to bring back previously discarded materials -- including the full product genealogy – and allow them to be put back into inventory with appropriate costs.

Tensoft SemiOps allows for re-working, re-screening and re-testing. It supports test analysis and production enhancement, reclamation and bonus processes, as well as re-test and re-screen production processes -- capturing detailed scrap and yield information, as well as quarantine material and variances.

Traditional ERP Inventory systems do not do location tracking. Fabless operations typically need to track locations by vendor. Ideally, they should also be able to track unlimited locations for each vendor. For example, if your fabs, test houses and packaging house have multiple locations, you should be able to track materials at each location. Tensoft SemiOps tracks wafer lot, internal lot, and vendor lot for every step in the manufacturing process. Unlimited production attributes can be tracked and used for detailed analysis.

Traditional ERP Inventory systems are not designed to integrate with operations management.  For fabless companies, ERP inventory integration with WIP tracking and WIP costing is a bare minimum for an effective business system. Tensoft SemiOps offers complete WIP and inventory management support for semiconductor operations, including yield and cycle time history, consolidated WIP status, complete forward and backward product genealogy, complete lot and product attribute tracking, all fully integrated with planning, customer service and ERP.

Tensoft SemiOps delivers an affordable, flexible alternative to traditional ERP Inventory systems. It provides a sophisticated, web-based solution to all of problem areas described above, as well as extensive semiconductor accounting, sales, production, supply chain, and manufacturing execution functionality. Tensoft SemiOps can also integrate with your manufacturing subcontractors. To learn more about Tensoft SemiOps, read this fact sheet or contact us.

If you're involved in ERP software selection in the semiconductor industry, talk to us before you begin a lengthy and expensive ERP implementation, or before you resign yourself to another year of inefficient, error-prone systems. For a reasonable cost today, you can make a long-term investment in Tensoft SemiOps that will scale as you grow.

by Tensoft, Semiconductor ERP and Supply Chain Solutions

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