Supply Chain Resilience And Agility: Two Critical Sides Of The Same Coin

Over the past three years of major global disruptions, the supply chains of many industries have sharpened their focus on resilience. Today, discussions on electronics industry resilience center on redundancy across suppliers, multi-tier supplier mapping, nearshoring, reducing the number of unique parts, regionalizing supply chains, and business continuity planning.

Resilience connotes a strategic view of the supply chain over at least one year, with a focus on the design of the supply chain network. But agility – the ability to be flexible, nimble, and quickly adjust to disruptions over a shorter term, typically less than one year – is equally important. Agility suggests a transactional focus on any change in demand or supply across the supply chain. A holistic view of the end-to-end supply chain needs to zero in both agility and resiliency.

Over the years, many semiconductor companies have honed their supply chain planning and sourcing processes to meet the ever-changing needs of players across the electronics supply chain—from IDMs and fabless design houses to foundries, OSATs, and electronics manufacturing service providers (EMS). However, for most companies, the processes have fallen well short in addressing both resiliency and agility simultaneously.

The SEMI white paper A Vision for Electronics Supply Chain Management examines the vital importance of the electronics supply chain, current supply chain challenges, and the criticality of transparency, collaboration, and information sharing to mitigate disruptions.

The white paper describes how determining changes required in supply chain models entails a review of three time periods – Near Term (1-2 Years), Medium Term (3-5 Years), Long Term (5-10 Years).

Most importantly, the white paper examines the foundational capabilities needed for agile and resilient supply chains including:

• Multi-tier supplier mapping
• Consolidating and harmonizing data across the supply chain
• Building persona-based dashboards and metrics to proactively identify and mitigate disruptions
• Implementing control tower for 360-degree visibility of the supply chain and potential disruptors
• Using intelligent resolution rooms that leverage tribal knowledge for agile decision making
• Developing rapid-response planning capabilities and contingency simulations

Supply chain disruptions caused by the global pandemic have led to a massive push to integrate datasets and connect systems, motivating many companies to accelerate their digital transformation and use artificial intelligence (AI) machine learning and predictive analytics to help manage their supply chains. The technologies are gradually going mainstream and will take time to scale across the value chain.

Given the criticality of semiconductors to a wide range of sectors, the industry must quickly adopt best practices to improve supply chain resilience, agility, and risk management. On February 28, 2023, SEMI announced that members of its Supply Chain Management (SCM) Initiative have formed an Industry Advisory Council (IAC), a group of industry leaders that will guide the initiative in its mission to advance an agile and resilient global electronics supply chain. Founding members include Google, Infineon, Intel, KLA, Merck, and TSMC. The Council will advance solutions to help SEMI members to better withstand supply chain disruptions.

SEMI invites member companies to join the SEMI Supply Chain Management Initiative and work to help accelerate the adoption of SCM tools and platforms and develop strategies to identify and address supply chain vulnerabilities.