Optimizing Your Position on the Operating Curve: How Can a Fab Truly Maximize Its Performance?

Abstract

An empirically grounded model of a fab operating curve that is sufficiently accurate to make capitalization decisions has identified preferred domains of fab performance. This finding contradicts extant theory, which argues that all operating points on the same operating curve should reflect the same level of performance. The model is used to simulate the performance of a stylized fab that operates under realistic conditions. Results of the simulation show that significant additional revenue and profit can be generated by extending the lean approach to managing the operating curve that is practiced in most fabs today to an approach that is both lean and value driven.