Kulicke and Soffa Industries, Inc. designing a Supply Chain Network Harvard Case Solution & Analysis

Introduction

Kulicke and Soffa industries Inc. (K&S) company has expertise in manufacturing, designing and marketing of the wire bonding equipment and consumable tools that are used to assemble semiconductors. Furthermore, the company has six different production facilities but the facility in Israel was the larger manufacturing facility of the company, because it produced 50% of company’s production.

Also, the company has been operating in Israel for 30 years, since the labor wages in Israel are very high as compared to other Asian countries. Since, company could not meet with the existing production capacity with the market demand due to increase in demand for the chips and semiconductors and also the increased demand for the tools and equipment.

Kulicke and Soffa Industries, Inc. designing a Supply Chain Network Harvard Case Solution & Analysis

Likewise, themajor concern for the company was that where they should expand either in Israel, Jordan, Singapore, or in China given that these countries have various pros and cons for the company but each of them would have helped the company to increase production capacity and meet with the market demand.

However, there are two major factors that should be considered while expanding to any country one that country should provide value to company in terms of increased production facility, low labor and operations cost, and secondly that the company could diversify its production facilities and leverage its investment.

Therefore, it is a concern for the company that where should it expand to acquire those benefits from the different geographic location, whetherIsrael is better option than China, or Jordan is better than Singapore and finally which country is best on given characteristics, pros and cons.

Question 1

The company has expertise in manufacturing wire bonding and consumable tools that are used to assemble the semiconductors. Furthermore, the semiconductor industry was growing very rapidly due to the increasing demand of wired or wirelesstechnology products. On the other hand, the increasing demand for the semiconductors worldwide influenced companies to increase the capacity in the market.

Since, the sales drivers were affectingglobal GDP, chip demand, and chipmaker demand, and capacity utilization the rapid change in the technology sector had created huge demand for the equipment, and tools as well. Beyond these demand in the market there were some other aspects that companies considered.

One company had to increase the production capacity due to the increased demand, second was reducing the labor costs, operations, raw material costs, and proximity to suppliers, customers werealso one of the major forces for the company to expand geographically to suitable location that would be advantageous for the company.

Therefore, changes in the supply chain network was the key to success for the company to make changes in the supply chain network with two intentions one to increase the production capacity, second to benefit from reduced labor costs, low operations costs, and material costs as well. Thus, it was important for the company to redesign its supply chain network.

On the other hand, the increasing complications was fueled by the increasing demand in the market and increasing competition has created anxiety in the market. Similarly, these forces have emphasized company to make changes to its supply chain and reduce the potential transportation costs and other costs associated with the operations.....................

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Kulicke and Soffa Industries, Inc. designing a Supply Chain Network

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