High tech spare parts management André van Goch Logistics Manager ASML Center of Excellence / Slide 1 20071112 ASML spare parts management Version 1 André van Goch
Contents ASML business Supply chain model Implementation & results / Slide 2
ASML Business Environment ASML: designs, integrates, markets and services advanced systems used by customers to create chips (IC) Industry: semi-conductor, capital equipment Business: B2B, High-Tech Close cooperation suppliers, customers, technology partners Technology Push: help customers shrinking IC patterns Market: highly volatile and cyclical Time to market: everything Position: from technology leader in past to market & technology leader now / Slide 3
ASML business Nano Lithography Equipment Main Technology Mechatronics Optics Software Purpose imaging IC patterns on silicon wafer Capital equipment Average selling price >14 Million Euro / Slide 4
ASML business Global Organization Worldwide HQ Veldhoven, NL U.S. HQ Tempe, AZ ASML Center of Excellence Linkou, TW 65 Sales & Service offices Installed base 2500+ systems / Slide 5 US$ 3.5 billion 6000 employees
Contents ASML business Supply chain model Implementation & results / Slide 6
Supply chain model Key figures ASML Service Parts customers demand per week WW stocking locations # parts (SKU) # service tools (SKU) # part engineering changes part price ( ) Part failure rate Key Logistics providers >250 1.000 65 10.000 3.000 200 20 ~ 1.000.000 2 ~ 30 yrs! 3 ~ 5 Inventory Planning based on mathematical models Quarterly planning review Input Planning Model Worldwide failure data Configurations of all installed equipments Service Level Agreement Cost parameters ERP System SAP, highly customized / Slide 7
Supply chain model Overview ASML supply chain management replenishment: 1-2 wks Local warehouse Source & supply spare parts 1 12 months Direct part Sales 1-2 wks Central Stock (NL, USA, SG) Global Freight forwarding network replenishment: 1-2 wks Emergency shipment: 1 day Local warehouse Routine Rush Contract Customers (<1h) Global Lateral Supply: 6-12 hours Warehousing (same and country) express logistics network Contract Customers (<1h) / Slide 8
Supply chain model Co-operation between ASML and University Business needs Parts Waiting Time < x % Local delivery < 1 hour; intercontinental < 36 hrs High part availability from nearest depot Requirements for the Planning Models Balancing stock cost with machine availability Customization to enable different customer contracts Make use of flexibility in transport when minimizing stock cost Cooperation ASML - Eindhoven University of Technology several PhD s and post-masters graduates take up the challenge since 2002 ASML and University define short term deliverables and long term goal. ASML implements the solutions in SAP. / Slide 9
Supply chain model Parts availability or equipment availability? Equipment Availability Available Down DTWP Down Time Waiting Parts (DTWP): the fraction of time equipment is not available due to waiting for service parts DTWP management was introduced at ASML to align spare parts inventory planning with semiconductor industry needs In past spare parts supply chain was optimized for Customer Service Degree (CSD): fraction of parts available in local depot / Slide 10
Supply chain model Equipment availability & Logistics scope Equipment Availability Running Wafers Scheduled for maintenance Not scheduled Scope Waiting for Parts (DTWP) Diagnostics and Repair Parts local Available (CSD) Local delivery Emergency delivery Failure Rate Reduction (OpEx) Stock Levels Parts local not available Parts Demand Inventory Planning Lead-time Machine Failures Demand Plan Replenishment Cycle time Interrelations between CSD, DTWP and OpEx/failure rate!! Consumption Confirmation Spare part Definition Parts quality program / Slide 11
Supply chain model Base logistics parameters and inventory cost Inventory Cost Inventory Cost CSD DTWP Potential conflict; customers need low CSD/DTWP, ASML low cost We can resolve this conflict by managing down the entire curve This requires improvements in part quality, part delivery and part demand / Slide 12
Supply chain model Parts quality and impact on supply chain optimization OpEx program: reducing parts consumption leads to better Operating Expenditures for ASML customers by less downtime and less part costs = 10 parts/m/yr = 20 parts/m/yr OpEx program OpEx program = 20 parts/m/yr = 10 parts/m/yr DTWP CSD OpEx program in combination with a CSD agreement drives up Inventory Cost; It reduces inventory cost in combination with a DTWP agreement / Slide 13
Contents ASML business Spare parts supply chain model Implementation & results / Slide 14
Implementation & results Best in class solution Have real-time visibility of all material movements on their customers machines Base their stocking proposals and replenishment strategies on real-time consumption rather than demand Understand, control and neutralize the impact of upstream supply delays on equipment availability Optimize parts availability at all locations simultaneously in one planning run, and have the capability to deliver parts 7x24 from anywhere in the network / Slide 15
Implementation & results Waiting for Parts performance measurement system Equipment Availability Running Wafers Scheduled for maintenance Not scheduled Scope Waiting for Parts (DTWP) Diagnostics and Repair Parts local available Local delivery Emergency delivery Failure Rate Reduction Stock Levels Parts local not available Parts Demand Inventory Planning Lead-time Machine Failures Demand Plan Replenishment Cycle time Consumption Confirmation Spare part Definition Parts quality program / Slide 16
Implementation & results Key performance indicators < xx minutes / week / machine % DTWP 40 42 44 46 48 50 52 2 4 6 8 week 100 % > 90% local parts available FILL RATE 40 42 44 46 48 50 52 2 4 6 8 week Average <24hrs from anywhere in world hours 0 LEADTIME 40 42 44 46 48 50 52 2 4 6 8 week / Slide 17 parts/week 0 Decreasing parts usage CONSUMPTION 40 42 44 46 48 50 52 2 4 6 8 week
Case 1: Create a stocking proposal Customer 300 machines all identical machines Agreement > 90% CSD Part Cost/part Usage/yr part 1 5k 145 part 2 50k 95 part 3 150k 80 part 4 250k 60 part 5 1,000k 30 Assignment Create your own stocking proposal Meet CSD contract with lowest inventory Cost Winner: Lowest Inventory Cost / Slide 18
Case 2: Delight your customer and ask our CEO for additional inventory budget Customer 300 machines all identical TWINSCAN Agreement > 95% CSD Part Cost/part Usage/yr part 1 5k 145 part 2 50k 95 part 3 150k 80 part 4 250k 60 part 5 1,000k 30 Assignment Create your own stocking proposal Meet new CSD contract with lowest inventory Cost Questions How much more money do you need? Which parts do you additionally stock? What is the impact on DTWP? / Slide 19
Case 3: Focus on Machine Availability; Achieve 0.3% DTWP Customer 300 machines all identical TWINSCAN Agreement 0.3% DTWP Part Cost/part Usage/yr part 1 5k 145 part 2 50k 95 part 3 150k 80 part 4 250k 60 part 5 1,000k 30 Assignment Create your own stocking proposal Achieve DTWP < 0.3% Questions How do you accomplish your goal? What is the impact on CSD? / Slide 20
Case 4: real life @ ASML 500 Customers all with different CSD and DTWP commitments; some unclear 3,000 machines, non identical 10,000 parts, no failure info on new parts 65 warehouse locations across the globe 200 parts with quality improvements Supplier leadtimes 1-12 months Challenge DTWP < 0.5% Estimate what Inventory budget you need? Price for the winner A job as a planner in ASML Logistics (visit www.asml.com) / Slide 21
High tech spare parts planning Conclusion Main levers of the high tech spare parts planning system for improving equipment availability: Accessibility of real-time data Quality of demand information Planning algorithms and mathematical capabilities to control the different paramterers like DTWP, CSD, parts usage Control over the entire supply chain Flexibility in distribution network / Slide 22 ASML Eindhoven University Global 3 rd party logistics providers
Thank you! www.asml.com / Slide 23