Outsourcing capacity planning for an an IC design house

Abstract

The management of outsourcing capacity is one of the key issues for IC design houses. There are two fundamental problems in outsourcing capacity management; they are the estimation of net capacity and the allocation of capacity. The purpose of this paper is to propose a framework of outsourcing capacity planning (OCP) for an IC design house to solve these two problems. The framework of OCP contains three parts: Net IC Product Demand Planning, Net Capacity Demand Planning, and Booking Capacity Planning. Linear Programming (LP) is employed to generate a net IC demand plan. A transformation process that transforms net IC product demand into net capacity demand is applied to obtain the net capacity demand plan. Finally, we use Analytic Hierarchy Process (AHP) to combine the factors, which an IC design house considers for outsourcing, into a Utility Index (U.I.). We then employ U.I. to develop a heuristic method to deal with the booking capacity planning problem. The result of OCP yields a better performance than that of the practice approach. In addition, OCP provides a decision procedure to assist IC design houses in monitoring the performance of each subcontractor.