Three major changes over the past decade have created a need for manufacturers to change their procurement systems. 

First, raw material and energy (RME) costs have increased 150 percent since 2000 while the Consumer Price Index (CPI) has increased less than 30 percent. This dynamic has squeezed the margins of most manufacturers. Second, during the same period, the volatility
of commodity prices, which make up a large portion of RME costs, has doubled. Finally, labor productivity gains have reduced labor cost as a percentage of total costs, making RME a larger component of the cost structure.

No matter the business, task or adventure, dealing with change can be a struggle. There are those who quickly adapt to it, and those who try to fight it. While it does depend on the situation, most people would probably agree that those who accept change will be able to adapt and succeed, while those who argue and fight will be weighed down, treading water until they go under.

People describe innovation as thinking “outside the box.” However, that may not always work in a complex manufacturing environment. 

WaferTech, as part of the world’s largest semiconductor foundry Taiwan Semiconductor Manufacturing Company (TSMC), faces many barriers to change while at the same time trying to continuously improve quality, productivity and contain costs. Fostering a culture of innovation in this environment can be as challenging as the semiconductor manufacturing process itself.