Graduation assignments Production and Logistics

2016-05 MSc assignment: Improving the control tower for after-sales service supply chains at ASML

Improving the control tower for after-sales service supply chains at ASML

April 28, 2016

The company

ASML is the world's leading provider of lithography systems for the semiconductor industry. ASML designs, develops, integrates, markets and services these advanced systems used by customers – the major global semiconductor manufacturers – to create chips that power a wide array of electronic, communications and information technology products.

ASML’s corporate headquarters is in Veldhoven, the Netherlands. Manufacturing sites and research and development facilities are located in Connecticut, California, Taiwan and the Netherlands. Technology development centers and training facilities are located in Japan, Korea, the Netherlands, Taiwan and the United States. Overall, ASML has more than 70 locations in 16 countries. ASML is traded on Euronext Amsterdam and NASDAQ under the symbol ASML.

With over 60 facilities, the ASML organization is extensive yet it is characterized by close cooperation — internally, and with customers and suppliers worldwide. The structure reflects ASML’s business strategy, which is based on technology leadership, customer focus and operational excellence. Consequently, innovation tailored to the strategic business segments is at the heart of the organization. And this is backed up by comprehensive logistics and customer support.

Global Logistics Services (GLS) is responsible for ensuring material availability to ASML’s factories and customers. Any break in material availability can have an unacceptable impact for our customers. So GLS must proactively identify and solve potential issues by working closely with our technical departments and customers, and actively managing an extensive supplier base. With over 350 highly educated and motivated people, GLS has contributed to ASML being named “Best Factory” in the Netherlands. In 2013, GLS was rewarded with the “VLM Nederlandse Logistiek Prijs 2013”. For more information, please visit http://www.asml.com/scm.

ASML has service contracts with their customers, in which performance agreements are made. For example, a maximum number of hours downtime that is allowed per time period . A service contract is typically based on multiple systems that a customer procured from ASML. To satisfy the customers and to avoid penalties for exceeding the maximum system downtime, ASML monitors the status of their service contracts. If, for example, ASML is running at 90% of the maximum downtime allowed for a certain service contract, an alert is generated that ASML is at risk, and interventions are needed to avoid more downtime.

Background of the project

This graduation project is part Work Package 3 of a larger research project called ProSeLoNext. This work package deals with the operational control of resources (e.g. service parts) for maintenance of assets, where tactical decisions (e.g. inventory levels) are given. Based on the actual status of the supply chains, it is important that upcoming issues like understocking or overstocking are identified early, such that preventive actions can be taken. Other fields are (i) identification of delays in the physical distribution process having serious consequences, such that corrective actions can be invoked, (ii) reverse logistics, i.e. whether to return and repair failed parts that have been removed from the assets, and how to route them with which priority level. This is part of the service control tower concept, aiming to co-ordinate operational control actions in a global service supply chain.

ASML has built an own service control tower at the level of individual stock keeping units (12NCs in the terminology of ASML: 12 digit numerical code) using Spotfire (http://spotfire.tibco.com/ ). Spotfire is a tool for data visualization and data analytics that is connected to the ERP system of ASML, being SAP. Using Spotfire, the status of the various 12NCs in the service supply chain is monitored, the development of the status for the next period is forecasted given demand rates and planned replenishment order arrival graphs, and alerts are generated to facilitate pro-active interventions to avoid issues like over- or understocking. Every week, ASML checks the alerts generated by the control tower, and decides in a meeting on interventions to prevent issues.

The assignment

Even though ASML already has an extensive and useful service control tower, there is still room for improvement. Extensions that still have to be covered are a.o.:

  • Establishing a link between the supply chain status at part level (12NCs) and the status of the service contracts. When ASML at risk for a certain service contracts, there should be a direct link to the underlying 12NC level to identify which parts related to this service contracts are at risk and so on which parts actions have to be taken. Also, ASML could profit from a translation of the deterministic forecast for the evolution of part availability in the next weeks to a forecast for the evolution of service contract performance in the next weeks
  • Inclusion of risk in the forecast for the evolution of the supply chain status at part level, and next also at service contract level. The current forecast is deterministic, whereas the failure behavior is (very) uncertain. Also, scheduled replenishment order arrivals from all suppliers are included in the forecast as certain events, whereas historic data may reveal that some suppliers are not that reliable and offer deliver later than promised. Including such information should lead to an estimate of risk that downtime may occur at the level of 12NCs and also at service contract level. Possible interventions could be assessed on their impact on both costs and risk reduction
  • Interventions that are currently taken in response of alerts are not tracked. To learn about the quality of interventions, it is useful to monitor the impact of these interventions to improve their quality in the near future.
  • Quality of alerts setting: Current interventions are done for parts with specific alerts. Review and check the quality of these alerts to improve the parts for which interventions are executed.

Your task is to set the scope of the research project and to define the steps to be taken. This includes a.o. a thorough analysis of the current service control tower as broadly sketched above, to identify the needs and wishes of ASML, to check the corresponding data availability, to set priorities to the extensions to be made, and to construct a time-phased plan to develop these extensions. Designing and implementing these extensions is further research and not part of this project.

Requirements

You are an enthusiastic MSc student Industrial Engineering and Management / Econometrics with good communication skills. You are able to work independently and to organize and run your own project smoothly. As English is the communication language within this research project because of several non-Dutch speaking researchers, we expect you to write your report in English.

Starting date

As soon as a qualified candidate is available

Contact persons

If you are interested, please send a CV and motivation letter to: