The solution
Semiconductor DRAM prices were falling sharply through the late 1990s, so every extra day a wafer spent in the fab reduced the revenue it could command. Samsung's cycle times of more than 80 days for DRAM meant slow response and heavy work-in-process.
Between 1996 and 1999 Samsung implemented SLIM in all its semiconductor manufacturing facilities: methodology to set target cycle times and target WIP levels per step, heuristic factory-floor scheduling, and optimization-based capacity analysis.
DRAM cycle time fell from more than 80 days to less than 30. Given the price declines, SLIM let Samsung capture about $1 billion in additional sales revenue compared with what it would have earned had cycle times stayed long.
What it achieved
Manage cycle time by WIP targets, not heroics
Why it worked
Explicit WIP targets made flow time a designed quantity
Floor scheduling heuristics made the targets achievable
Capacity analysis kept the system in balance
What can be applied
Cycle time is set by queueing, not by effort: put explicit WIP targets on every step and let scheduling follow them, so shorter flow times become a designed property.
Aftermath
SLIM became the standard cycle-time management approach across Samsung's fabs and a widely cited case in semiconductor manufacturing research.
FOLLOW THE EVIDENCE
The sources
- SLIM: Short Cycle Time and Low Inventory in Manufacturing at Samsung Electronics doi.org
- SLIM: Short Cycle Time and Low Inventory in Manufacturing at Samsung Electronics (abstract) ideas.repec.org
- SLIM: Short cycle time and low inventory in manufacturing at Samsung Electronics (abstract) iaorifors.com