Positioning a Decoupling Point in a Semiconductor Supply Chain under Demand and Lead Time Uncertainty

Abstract

Most of high-tech industries are facing unpredictable demand, short product lifecycles, and globally-spreading logistics. To surmount such a challenging environment, semiconductor industry practices have found the “push-pull strategy”, which is a hybrid approach of make-to-stock and make-to-order, as an effective solution. The position of a “decoupling point”, which is the boundary between make-to-stock and make-to-order, is one of the critical elements that influence a successful implementation of the push-pull strategy. This research addresses this issue by investigating the positioning of a decoupling point in a semiconductor supply chain based on the qualitative framework and simulation analysis. Several guidelines on how the decoupling point should be positioned under demand and lead time uncertainty are presented.