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1. Introduction
Hannover Messe 2015 showcased the next steps of Germany to secure its manufacturing footprint in the high labor cost areas, and enhance the competitive position of its local manufacturing companies. The vision of a smart factory specified in Industry 4.0 pointed out the direction of a future production system. To realize the vision, a cyber-physical system plays a key role and has to be achieved through the new technologies, such as Internet of Things (IoT) and big data analytics. In order to reduce the labor and inventory costs, a semiconductor company in Singapore has requested us to develop a smart spare parts management system for them in the Industry 4.0 environment.
According to Deloitte (2014), the four characteristics of Industry 4.0 are: vertical networking of smart production systems; horizontal integration via a new generation of global value chain networks; through-engineering across the entire value chain; and acceleration through exponential technologies. To achieve horizontal integration (i.e. the second characteristic), a new generation of global value chain networks has to be established. The networks should be a real-time optimized network that enables integrated transparency, facilitates better global optimization and offers a high level of flexibility to respond to problems in a timely manner. To create transparency and flexibility from purchasing through production to sales, new cooperative business models have to be created for both customers and their business partners in a smart supply chain.
Under the demand and supply uncertainty, it is a challenge to prepare spare parts for the right machine at the right time with the right quantity and minimum labor. Based on the characteristics of spare parts, two types of spare parts existed in a semiconductor fab: consumable parts and contingent parts. The majority of the spare parts are consumable parts, which are used in a preventive maintenance (PM). The demand of contingent spare parts is induced by machine breakdowns. Due to the lower frequency and relatively higher cost, the suppliers usually hold limited inventory for a contingent spare part.
The current inventory management of consumable spare parts in a semiconductor fab has generally faced the following challenges: low hit rate, high on-hand inventory, and intensive manpower requirement. For example, to reduce on-hand inventory, the studied fab asked the suppliers to sign...