Home » Best Practices: Semiconductor Spare Parts Logistics

Best Practices: Semiconductor Spare Parts Logistics

by | May 16, 2023 | Blog Post

There’s manufacturing, and then there’s semiconductor manufacturing.

If a machine goes down during wafer fabrication, that lost production time can equate to tens of millions of dollars in lost revenue. That’s why a reliable solution for semiconductor spare parts is so critical.

Just about every manufacturing industry has a spare parts logistics solution for when equipment failures occur, but semiconductor spare parts have some unique aspects that make specialized experience in  semiconductor logistics services helpful. For instance, parts can be ultra-sensitive and, therefore, must be protected from any shock, product tilting and temperature changes in transit. That may require attaching special gauges to equipment to monitor variances. These gauges can be programmed to send signals to your cell phone to aid real-time monitoring. This monitoring can apply when shipping critical spares or shipping capital equipment to semiconductor foundries. Let’s take a look at other aspects of managing spare parts for semiconductor manufacturing equipment.


Best Practices in Semiconductor Spare Parts Management

Semiconductor spare parts can range in size from items that ship in a small box to very large components that must be carefully packed and crated. If you are responsible for managing semiconductor spare parts inventory and delivery operations, here are some best practices to keep in mind.

Forecasting and inventory management

Critical spares need to be on hand and ready to ship when machines go down. Advanced forecasting and historical data analysis can help accurately predict service parts demand. You’ll want a centralized inventory management system to ensure accurate visibility and control of parts inventories that could be spread across a country or across the world.

Collaboration with suppliers

Sometimes it’s equipment suppliers who are responsible for providing semiconductor spare parts under the sales contract. It’s wise to foster strong relationships with these key suppliers to ensure timely and reliable parts availability. That includes working together on demand forecasting and contingency planning. As they say, trust but verify.

Network of strategic stocking locations

Spare parts for semiconductor manufacturing could be located on-site at the production facility. But more often they are at spare parts depots located to match the service level agreement (SLA).  A 2–4 hour SLA requires a stocking location quite near the production facility, while a next-business-day SLA allows stocking at a more central location near a major airport for a next flight out (NFO) solution.

For a global leader in networking equipment. Dimerco managed 65 service parts depots located close to this company’s key customers to support an SLA range from 4 hours to next business day.

Managing international shipments

For international shipments, you’ll want to work with a global freight forwarder that has excellent global air freight services and a proven ability to manage time-critical freight. For these urgent shipments, the last thing you want is a delay in clearing customs. In these cases, it helps if your freight forwarder is AEO-certified (CTPAT in the US) in order to speed clearance.

Not all semiconductor spare parts deliveries are urgent.  Local, in-country stocking locations for spares must be replenished, and that requires global DC-to-DC shipments. Timing of these shipments will depend on inventory planning work and should be optimized to control transportation costs. Semiconductor parts typically ship via more costly air freight.

Careful oversight can yield profit driving savings. For instance, a Dimerco audit of one customer’s global shipping operation noted separate shipments of parts on a semi-frequent basis from LAX to Singapore, costing about $600 USD per shipment.  But these were not urgent shipments and, therefore, could be consolidated into a single weekly shipment without missing customer commitments – saving $5,400 per every 10 non-urgent shipments.

Managing domestic shipments

For urgent domestic shipments, make sure that you have transportation partners that offer 24/7 service. Not all do – even those that say they perform expedited services.

In Phoenix, one of the world’s fastest growing semiconductor production hubs. Dimerco’s office there offers a range of expedited shipping services 24/7, including same-day ground or air and next flight out. The office arranges frequent NFO shipments to locations across the country and the world.

“Our round-the-clock service is something that local semiconductor customers need and expect,” says Wolfgang Meder-Eggebert, Branch Manager at Dimerco Phoenix. “Try calling freight forwarders at 3:00 AM for a pickup. Many won’t answer.”

Recently, for one particularly urgent spare part need, this branch hand carried a part from Phoenix to San Juan, Puerto Rico for a next-morning delivery that allowed a gas station chain to reopen operations in time for a holiday weekend.

Several Dimerco semiconductor customers contract for hotshot deliveries across the U.S. in vans or box trucks with team drivers that travel direct and non-stop. Because of the importance of the shipment, these companies prefer to bypass their regular commercial carriers and pay a little more for the time-definite hotshot service.


Reverse logistics

When it comes to semiconductor spare parts, the replaced parts are not tossed in the garbage bin. You need a well-defined process for handling returns and exchanges of faulty parts – including receiving and inspecting spares and performing product triage. These tasks can be performed by the right 3PL with the right experience.


Trust semiconductor spare parts management to the experts

Maximizing throughput at a semiconductor foundry or chip-making plant is a PRODUCTION challenge.

Getting that production facility back up and running when a machine goes down due to a faulty part is a LOGISTICS challenge.

For that you need experts well versed in the unique product handling and shipping requirements of the semiconductor industry. To discuss your need for global semiconductor spare parts logistics services, contact the semiconductor logistics specialists at Dimerco Express Group to arrange a discussion.

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