Mistakes Companies Make When Outsourcing Their Semiconductor Manufacturing to Asia

Jan. 6, 2010
Simple mistakes can cause companies to lose millions of dollars.

Outsourcing semiconductor manufacturing to subcontractors in Asia is very attractive to companies worldwide primarily because it offers options to reduce cost in manufacturing. However, simple mistakes can cause companies to lose millions of dollars, according to SOMC (Semiconductor Outsource Management Co.), a provider of subcontractor management solutions for semiconductor companies.

Two of the top mistakes companies make when outsourcing their semiconductor manufacturing to Asia are as follows:

Inadequate Subcontractor Management

  • If not managed properly, a company can lose visibility, performance and control of their manufacturing operations
  • Subcontractor provides unsatisfactory performance results (i.e. cost, quality, CT)
  • Not knowing how to build a relationship with the subcontractor to improve performance
  • Having insufficient disaster-recovery plans and backup
  • Not creating sufficient visibility of operational indices
  • Is there sufficient knowledge, skills, experience to get the job done correctly?
  • Unrealistic expectations on fast bottom line results
  • Who is responsibility for what and when
  • No governance, control, monitoring, or management
  • The gap between decision making and implementation (i.e. clearly define, monitor and executed properly)

Ineffective Deployment Of Key Contributors:

  • Miss assigned, i.e. wrong person for the job, i.e. lacks manufacturing skills, lack negotiation skills, lacks people skills, packaging skills
  • Try to manage subcontractors on a part-time basis, quarterly or less
  • Trying to manage too many subcontractors

To view the full report visit www.semiconoutsourcemgmtco.com

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