Optimized material requirements planning for semiconductor manufacturing

This paper describes a custom operational research algorithm, which is run nightly by IBM to create a material requirements plan for its semiconductor fabrication facility in Vermont, USA. To model alternative manufacturing processes and part substitutions, this application interweaves linear programming and heuristic methods to reap the benefits of each decision technology. At each level of the bills of materials supply chain with complex decision choices to be made, parallel linear programmes are invoked and their results are fed into a material requirements planning (MRP) heuristic, which processes parts through multiple iterations. The results from processing one level of the bills of materials supply chain are exploded to create demand for the next level and the interweaving of the two decision technologies continues. The algorithm creates recommended manufacturing releases and work‐in‐process priorities. These outputs point out opportunities for improvement in order to satisfy all demands on time. The output can be interpreted with well‐known MRP assumptions.