Spare Parts Planning at ASML

Enhancing spare parts planning: 
Using advanced planning methods to provide excellent services.


Concise summary of this best practice
Key to successful provisioning of high-tech spare parts is the use of advanced planning methods. This best practice discusses how ASML organized its global spare parts network, using a custom-made planning method. By doing so ASML has further improved its service level, while simultaneously reducing total costs. Instead of being an organizational burden, providing service is now a distinguishing competitive factor. 

Key terms 
Service supply chains, high-tech spare parts inventory, pooling, emergency and lateral transshipments.

Relevant for 
Equipment vendor, moving into service level agreements (such as ASML, Océ, Vanderlande Industries, IBM, Stork, Thales, Airbus, Boeing etc.).

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ASML: from technology leader to market and technology leader

ASML is a Dutch equipment manufacturer in the semiconductor industry. ASML designs, supplies and integrates advanced technological equipment, called lithography machinery. The customers of ASML (such as Intel, AMD and Samsung) have billion dollar plants that house and operate the equipment to produce semiconductors. The lithography step is one of many in the high-tech production environment, but it is crucial for throughput and ‘chip generation’. In the newest chip generation, the IC pattern size has been further reduced, making the chip smaller, more powerful and more valuable. Time to market is everything, since new generations earn exponentially more money than their predecessors.

Avoiding and reducing down-time costs
In semiconductor plants, the ASML machines are the most capital-intensive, which generally means that plants are developed such that the ASML-machines are the bottlenecks in the process. Customers therefore generally strive for the highest possible ultilization rates of the machines in their production processes. If an ASML machine breaks down this can cause the customer's entire production process to go down, resulting in down-time costs of tens of thousands of euros per hour! The resulting downtime costs can easily run into millions of euros per failure. Investments to reduce downtimes therefore deliver high returns. The expected performance of the service is agreed on in the Service Level Agreements (SLA’s). At ASML, most customers require a system availability corresponding to a minimum aggregate mean waiting time of only a few hours.

Customer retention
Customer retention is a very important value for ASML. The key element of satisfying and retaining customers is service performance (especially in demanding and capital-intensive businesses such as the semiconductor industry). ASML therefore needs to be determined to deliver customized service that solves the customer’s problem. This means it needs reliable and flexible supply chain with state-of-the-art planning, accurate parts delivery and high parts quality. Cost-effectiveness is a secondary concern, but obviously, costs are only acceptable if value is delivered to customers.

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Key terms: 
Service supply chains
High tech spare parts inventory
Pooling
Emergency transshipments
Spare parts planning
System availablity
Lateral transshipments
System approach

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Target industry sector

  • Process industry (chemical and other)
  • Pharmaceutical industry / Health Care
  • Capital goods industry, especially service parts logistics
  • Retail & Internet / E-commerce
  • Consumer packaged goods
  • Mass assembly
  • High-tech (consumer electronics, semiconductors, contract manufacturing, communications)
  • Logistics service providers

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