Benchmarking challenges to supply‐chain integration: Managing quality upstream in the semiconductor industry

The goal is to manage the key value‐added processes from the “suppliers' supplier to the customers' customer.” Such end‐to‐end supply chain integration is very rare; however, many companies actively strive to implement initiatives in the areas of new product development, cycle time reduction, process redesign, cost minimization, and quality improvement across organizational boundaries. Most efforts are dyadic, focusing on a buyer/supplier relationship. Few examples of multi‐tier implementation efforts have been documented. This paper looks at the challenges encountered in the implementation of a quality initiative in the semiconductor industry. The focus is on the challenges encountered as a successful first‐tier implementation was driven back to the second tier. Initial efforts failed and responsibility for second‐tier implementation was passed back to the first‐tier suppliers. Efforts at this level continued to stall because the leverage dynamics of the supply chain was very different as smaller, second‐tier suppliers were engaged and encouraged to adopt the new quality standard.