Optimizing Site Qualification Across the Supply Network at Western Digital

Bo Liao (), Candace Arai Yano () and Shiva Esturi ()
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Bo Liao: Analytics Center of Excellence, Silicon Operations, Western Digital Corporation, Milpitas, California 95035
Candace Arai Yano: Department of Industrial Engineering and Operations Research and Haas School of Business, University of California, Berkeley, California 94720
Shiva Esturi: Supply Chain Strategy and Optimization, Silicon Operations, Western Digital Corporation, Milpitas, California 95035

Interfaces, 2017, vol. 47, issue 4, 305-319

Abstract: We describe an optimization-based methodology that Western Digital implemented to support its site-qualification decisions; that is, which sites(s) are qualified to produce each of its products. Qualifying a product at a site commonly takes several months and hundreds of hours of engineering effort. These decisions are especially challenging because Western Digital Silicon Operations offers thousands of products; and demands more than a month or two into the future are very uncertain, as they are with many electronic products. Therefore, because shortages result in lost sales, the company must consider both expected demand and demand uncertainty. We solve the problem as a mixed-integer stochastic program with multiple stages of recourse, using a linear programming solver for the recourse stages and a greedy heuristic to determine the site qualifications. Western Digital deployed the model starting in the first quarter of 2015 and established a quarterly process for making site-qualification decisions. The decision support tool facilitated a more streamlined decision process and has already provided substantial savings to Western Digital.

Keywords: network design; manufacturing process flexibility; stochastic programming (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (1)

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