Improvement of on-Time Delivery In A Semiconductor Company in the Philippines: A Case Study

Abstract

On-time delivery (OTD) is a metric that measures the efficiency of a supply chain. it affects customer retention which is crucial in any business. The Covid-19 pandemic considered one of the most severe disruptions in supply chain history has caused high shifts in demand and supply resulting in late deliveries. These shifts are more evident in the semiconductor industry which supplies most of the automotive, industrial, and medical devices. One semiconductor company decreased its OTD to 85.84% during the pandemic which is far from the acceptable OTD of 95%. This paper aims to address late deliveries, bringing back the company’s OTD to 95%. Late supply is the top contributor to late deliveries which was addressed through transshipment mixed integer linear programming considering the least transit time. OTD has improved by 3.7-8.8%, however, 95% OTD is still not met. To further improve OTD, the next top contributors were addressed. This paper focused only on controllable factors, namely, execution, capacity, allocation, planning-related, and others. Stochastic linear programming was used to find the fastest time through each site. These further improve OTD by 2.2-4.8% which in some instances would exceed the target of 95% OTD.