It's not that traditional ERP Inventory systems don't work for everyone - they just don't work well for fabless semiconductor operations. Trying to make them fit 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.
So, what's missing in traditional ERP inventory systems that fabless semiconductor companies really need to have in their systems? Here's a short list:
1) Genealogy (Process History Tracking) - Traditional ERP Inventory functionality simply does not provide genealogy tracking. Fabless semiconductor 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, and 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).
2) Specific Product Identification (Lot Number/Date Code) - Most traditional ERP systems only offer Lot Tracking or Serialization - with one tracking number associated with the part. Most fabless companies mark their product with more than one key tracking attribute - often the Fab Lot Number and Date Code. A common additional complexity is lot splits and lot merges - which makes it more important to accurately collect the individual tracking attributes for your product.
3) Product Attributes - Beyond the product identification attributes, there is often other information that fabless companies would like to collect 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. Traditional ERP Inventory systems typically do not let you collect unlimited attributes about your product during the production process.
4) Process Cost History - Traditional ERP Inventory systems offer no solution for maintaining a process cost history. They also do not support semiconductor product costing and inventory earned value requirements. Semiconductor costing has complexities and unique requirements unlike any other product. Fabless operations typically need to maintain complete cost history by step in the production process. They need to understand standard and actual cost and yield by step in the production process, and detailed cost variances by step.
5) Reclamation Handling - Traditional ERP Inventory systems lack the ability to allow previously discarded materials to be brought back into the system. Fabless semiconductor operations often need a system for reclamation of previous yield loss (bonus). They need to have 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.
6) Location Tracking - Traditional ERP Inventory systems do not distinguish inventory by company. Fabless Semiconductor operations typically need to track locations by vendor. Ideally, they should 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.
7) Integration with Operations Management - Traditional ERP Inventory systems are not designed to integrate with semiconductor WIP tracking or WIP costing. For fabless semiconductor operations, ERP Inventory integration with WIP tracking and WIP costing is a bare minimum for an effective business system.
Tensoft's Fabless Semiconductor Management (FSM) delivers an affordable, flexible alternative to traditional ERP Inventory systems. Tensoft FSM 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 FSM can also integrate with your manufacturing subcontactors.
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 that will scale as you grow.