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Matching Assets with Demand in Supply-Chain Management at IBM Microelectronics

Author

Listed:
  • Peter Lyon

    (IBM Microelectronics Division, 1000 River Road, Essex Junction, Vermont 05452)

  • R. John Milne

    (IBM Microelectronics Division)

  • Robert Orzell

    (IBM Microelectronics Division)

  • Robert Rice

    (IBM Microelectronics Division)

Abstract

In the early 1990s, the IBM Corporation decided that its microelectronics division should expand from producing parts exclusively for other IBM locations to producing a range of products for diverse customers. To overhaul its supply-chain-management applications to handle the new business, it developed intelligent models to match assets with demand to determine which demands it could meet when and to provide manufacturing guidelines. In 1994, the PROFIT team began applying OR techniques to build these tools, interweaving linear programming with a traditional material resource planning algorithm and a heuristic matching process based on clues established in the explosion algorithm. The team has deployed three core applications: a weekly division run that determines customer commitments and manufacturing requirements, daily manufacturing runs that identify the best use of manufacturing resources to meet division requirements, and a division available-to-promise application that facilitates fast response to customers placing orders (not described). This work has improved manufacturing utilization and customer-order response time.

Suggested Citation

  • Peter Lyon & R. John Milne & Robert Orzell & Robert Rice, 2001. "Matching Assets with Demand in Supply-Chain Management at IBM Microelectronics," Interfaces, INFORMS, vol. 31(1), pages 108-124, February.
    • Handle: RePEc:inm:orinte:v:31:y:2001:i:1:p:108-124
    DOI: 10.1287/inte.31.1.108.9693
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    Citations

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    Cited by:

    1. Brenda Dietrich, 2007. "Some of my favorite integer programming applications at IBM," Annals of Operations Research, Springer, vol. 149(1), pages 75-80, February.
    2. Raphael Herding & Lars Mönch, 2024. "A rolling horizon planning approach for short-term demand supply matching," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 32(3), pages 865-896, September.
    3. Lin, James T. & Chen, Tzu-Li & Lin, Yen-Ting, 2009. "Critical material planning for TFT-LCD production industry," International Journal of Production Economics, Elsevier, vol. 122(2), pages 639-655, December.
    4. Alfred Degbotse & Brian T. Denton & Kenneth Fordyce & R. John Milne & Robert Orzell & Chi-Tai Wang, 2013. "IBM Blends Heuristics and Optimization to Plan Its Semiconductor Supply Chain," Interfaces, INFORMS, vol. 43(2), pages 130-141, April.
    5. Brian T. Denton & John Forrest & R. John Milne, 2006. "IBM Solves a Mixed-Integer Program to Optimize Its Semiconductor Supply Chain," Interfaces, INFORMS, vol. 36(5), pages 386-399, October.

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