Exploding the Myth of E-Procurement

Electronic procurement, the staple of Internet-based supply chain management that was thought to be the golden fleece to streamlining operations within the semiconductor industry, has lost a lot of its sparkle. In today's slow economic environment, staff downsizing is a way of life. Initially, e-procurement was very appealing because one person could do the job of many with the click of a mouse.

The ease of Internet purchasing created a fast path to sources. In fact, many fabs accumulated several hundred vendors supplying parts and goods — often duplicating services. The mid-level staff that analyzed procurement and interfaced with engineering is either gone or stretched too thinly over a wide range of responsibilities. Process engineers are in the position of continually requisitioning to keep tools up and running, and purchasing is filling those requisitions with the fastest available e-vendor.

Whether standard or e-based, the cost of requisitions in time spent generating the purchase order, shipping costs, stocking charges and miscellaneous fees is multiplied by each vendor used. The overwhelming scope of this has many fabs in a delicate balancing act between vendor overkill and matching their operations to the fluctuating demands of the semiconductor industry. Rather than deal with reconstruction of the supply chain and tooling management, many facilities are turning to a new type of outsourcing that takes over as little or as much of daily operations as the company wants to relinquish.

An integrated supply chain management company tailors service programs to the specific needs of the manufacturer. A very basic program can include parts management, where the service takes over all procurement of materials. It can include parts movement where on-site service contract personnel keep parts in stock near the fab floor for easy access. Services can include proprietary parts and materials that are specific to an individual toolset, gas and chemical management, technical training programs and even statistical process control (SPC). The service company keeps its staff at the fab facility on any basis required up to 24/7. Every service provided improves quality and radically cuts the number of invoices and purchase orders needed, as well as freight costs. Programs can even be provided on a consignment basis where the facility does not pay for any materials until it actually uses them in the tool.

With all these options, it is easy to see how these services benefit management both in overt cost savings and the more covert costs associated with labor. But how does the actual production floor benefit? What, if anything, does the process engineer gain from this type of service?

Engineers who should be dedicated to producing product often become too involved in the supply side of keeping their tools up and running. And yet, they are still seeing unscheduled downtime because of bottlenecks at critical tools — because it's extremely hard to serve two priorities and do both well. In this case, the procurement side takes a back seat to building product.

It is not unrealistic for an engineer to spend an hour or more every day trying to keep up with procurements. An engineer on the other side of the facility picking up spare parts means he is away from his tool. At the tool level, productivity is measured in wafer throughput. For maximum uptime, all supplies, spare parts and materials needed to keep these tools up and running have to be readily available to the process engineer at all times.

Contracting with a full-service provider serves these needs. The provider manages all generic consumables including o-rings, fasteners, fittings, vacuum components, filters, greases and sealants, quartz wear, lamps and ceramic parts — more than 100,000 products along with OEM-specific spare parts. Both the stockroom and the end user are prepared by implementing a middle-level "breadman"-style program (Fig. 1), which places all high-volume materials closer to the fab floor. The materials are typically located near the gowning area so engineers do not have to de-gown to get the spare parts and materials or pass through the multiple cleanroom areas.

1. Stocked spare parts can be located at the point-of-use, depending on the needed frequency and urgency of system uptime.

Considering that some fab facilities can rival a college campus in size, the breadman program can save the engineer miles of walking and hours of time going back and forth to the stockroom to get a $1 part. However, without that $1 part, the toolset might be down. With parts in stock at or near the tool area, he can quickly get the parts needed and resume maintenance on the tool. The services can also go deeper into the fab to point-of-use stocking locations for tool-specific support (Fig. 2). This puts key parts into cabinets located beside the toolset so the engineer does not have to leave the area at all.

	2. A tool-specific stocking program ensures that spare parts and materials are located in the cleanroom near the tools, so that it is unnecessary for engineers to leave the cleanroom to obtain them.

A good service provider will also build and supply preventive maintenance (PM) kits for the engineers. By doing this, the stockroom is not depleted of parts as the engineers search the shelves to fill these kits. It is all in one container, and the engineer only has to take it off the shelf. PM kits are specifically compiled for individual toolsets depending upon what processes the tool has been performing, and what type of maintenance needs to be performed.

To put this into perspective, as all in the industry are well aware, a tool can cost millions of dollars. In a typical $1.5B fab, $900M to $1B of that is invested in process tools. Uptime is extremely critical, even during market downturns. With fabs costing upwards of $100,000 an hour or more, tool downtime can negatively impact the return on the fab investment.

Engineering and the vendor personnel work as a team. When a tool comes down for preventive maintenance, before it is taken apart to replace o-rings, seals, etc., the engineer has the on-site service personnel decommission the tool. The service person will purge all gases out of the lines and test appropriate areas to ensure that the tool is safe to work on. After engineering maintenance, the service provider goes back in and recommissions the lines by purging everything out with very high-purity nitrogen or argon. They will analyze the tool and materials and ensure that the purities of the materials are right, and then supply the process gases to the tool. The service personnel are there with the engineer and the tooling as part of the overall fab structure.

Many times, once tools are taken apart, some of the parts have to undergo special cleaning and be refurbished; for instance, applying a coating, anodizing, etc. The service contract company can handle this too. If an engineer is seeing poor performance because of worn parts, the technology is at his disposal to correct the problem.

The purpose of the service is to surround the process engineer and his tool with a host of technologies that improve tool performance and uptime. The engineer working with the tool does not have to concern himself with anything but manufacturing wafers.

A small fab could have three or four contract people that circulate through that facility. A large facility with multiple services including gas and chemical management, ultrapure water management, spare and consumable parts management, etc., could have 10-20 times that many. As service personnel circulate through the facility, they are visible to the engineers so they can be quickly called on to help with any problem an engineer might be experiencing with a tool.

As technical support, contract services generally have locations around the world and are all linked on a corporate database. If one customer facility is having a problem, it is shared with all locations so the best solution can be found in the shortest amount of time. Suddenly, best practices, ideas and technology advances are all accessible to the engineers at any customer facility within a matter of minutes or hours. The contract service personnel act as a worldwide technical connection or a solution search engine.

This service can be applied beyond tool or process issues. A good service provider will also have an emergency response team. Every site has a computer setup hooked to the corporate network so there is instant information available regarding all material and safety data sheets.

Engineers are concerned with tool consistency. One of the services a contract supplier could offer might be considered within the area of SPC. It will perform a baseline analysis on a tool using state-of-the-art, highly sensitive instrumentation that analyzes gas or chemical concentrations down to parts-per-trillion levels. This establishes the baseline for that tool. Then, over a period of time the tool and the gas and chemical supply systems are rechecked to see if performance has changed.

Data are also kept on the reliability of all gas and chemical delivery systems, and tool parts are supplied so the service provider can spot trends that may indicate a problem with a component in the supply systems. With the use of the worldwide database links, it can go to the fab manager and show a comparison between the efficiency of his tooling compared with other fabs producing similar products, i.e., a type of benchmarking. In some cases, the contract service can show that the fab does not need to spend more money on expensive materials or supply systems.

The service provider can also supply data showing consumption levels on parts. Any spikes in use of a particular part might indicate that a tool is not running efficiently. Basically, a good service provider is not just a passive supplier that fills slots with parts. It looks for ways to optimize the operation, and would participate in facilities operations, be involved in planning meetings and work with fab engineering staff and management.

Currently, the Supplier Relations Action Council (SRAC) is investigating integrated supply chain management services, and plans to bring the best providers to the table for advanced discussions. This is a solid indication that these types of services will become a valuable asset for keeping the semiconductor business in the black, regardless of market fluctuations.

The fact that the purchase power of contract service companies buying for multiple global facilities passes a huge cost savings along to all their contracted customers is enough to make any fab take a second look at this type of service. Savings can be $800,000 to $1M in vendor-associated costs alone for a large fab. Those are significant numbers to management. From the engineering point of view, a good service company treats a 1 cent o-ring the same as it would a $10,000 electrode. Every part is managed by a support person to make sure the part is where it needs to be at all times.

The value of an integrated supplier is availability and economy; both are attractive reasons to invest time in understanding the details of such a program.