This ppt is an attempt to solve the case study: Kulicke and Sofa Industries , Inc : Designing A Supply Chain Network

1. Kulicke and Soffa Industries Inc :
Designing a Supply Chain Network
PRESENTED BY: GROUP - 4
NISHANT
PIYUSH
PRUTHVIRAJ

2. Industry
Background
 Founded by Fred Kulicke & Al Soffa in Washington,
Pennsylvania in the year 1951
 Supplier of equipment used to assemble
semiconductors
 Globally expanded its business to Switzerland in
1972
 In the year 2000 it reported high sales
 The sales grew $7.5 bn in 1992 to $47.7 bn in 2000
 Israeli site held 50% of the worldwide market share
 It's crown jewel are the wire bonders

3. Customers
and
Competitors
 Firms that performed contract assembly of semiconductor
devices
 Captive and merchant manufacturers
 Customers outside the United States contributed up to 91%
of sales in 2000, 83% in 1999, and 80% in 1998
 Some of the major competitors of K&S
 Bonders category - ASM Pacific Technology and Shinkawa-
 Blades category - Disco Corporation
 Capillaries category – PECO, CoorsTek and Small Precision
Tools, Inc

4. Reasons For Expansion
INCREASE IN GLOBAL
DEMAND
COMPETITION COST REDUCTION CLOSER TO CUSTOMER
BASE

5. Demand Indicators
FY 2000-01 Best years Record-high sales
Increase in sales to $47.7
billion in 2000
50% global market share
Significant demand from Asia-
Pacific region
Technological advancement
and new emerging market for
semiconductors(especially in
wire and wireless appliances)

6. FACTORS TO BE CONSIDERED WHILE
RE-DESIGNING THE SUPPLY CHAIN
 Infrastructure
 Availability of labor
 GDP
 Investment and transportation cost
 Exchange rates
 Fiscal policies of governments
 Customer satisfaction
 Procurement of raw materials

7. Current
Scenario in
Israel
 Presence over 30 years
 50 % market share
 New Shekel fully convertible (1LS=0.24 USD)
 Solid Infrastructure
 Research & Development
 Overhead prospective
 Production near R&D
 Specialized in expandable tools and sole
manufacturing site of those products
 Reduction in Operating cost

8. Comparison on different locations
Location Advantages Disadvantages
Jordan • Shares border with Israel
• The Jordanian dinar(JOD) fully convertible (JOD
= USD1.41 in 2000)
• Duty free entry into US
• High unemployment rate(14%)
• Uncertain diplomatic relations
• Security concerns of sending Israeli employees
• Lack of quality infrastructure
Singapore • Excellent infrastructure
• SGD = USD0.59 in 2000
• Pre-existing production site and very good
public transport
• High skilled workforce
• Close to customer base
• High cost of living
China • Low cost of living and labour costs
• Well established infrastructure at CS-SIP
• Close to customer base
• Surrounded by competitors

9. Data Used
for
Calculation

10. Graphical
Representation
Graph Yi= 0.25X+1875000 Yj=0.25X+2625000 Ys=-X+4500000 Y=-X+6000000
X TC Israel TC Jordan TC Singapore TC China
1000000 11024200 7912600 14205280 11756000
1500000 11149200 8037600 13705280 11256000
2000000 11274200 8162600 13205280 10756000
2500000 11399200 8287600 12705280 10256000
ICI 2000000
ICJ 4500000
ICS 6000000
ICC 6500000
LCI 6899200
LCJ 537600
LCS 4705280
LCC 256000
Assumptions:-
No of working days = 320
One shift per day
No of labors = 200
LC = Labor cost
TC = Transporation cost
IC = Investment cost

11. Ranking Matrix
Factors Israel Jordan Singapore China
Political 3 4 1 2
Fiscal 4 3 1 2
Infrastructure 3 4 2 1
Cost 3 1 4 2
Average Rank 3.25 3 2 1.75

12. Thank You