Designing effective service contracts

Does it matter who performs maintenance? The servicing of semiconductor manufacturing equipment has significant ramifications for efficient operations, the rate and direction of technological advances, and the relationships between customers and suppliers of equipment. Some researchers have suggested that incremental innovation in the form of continuous improvement accounts for even more productivity gains than technological leaps associated with new generations of equipment. Although the TPM philosophy emphasizes the importance of users performing maintenance themselves to capture this learning, many chip makers seem to believe that maintenance is not a high value-added activity, choosing to rely on equipment suppliers for maintenance and repair services. Nonetheless, research has shown that users are a critical source of innovation, so equipment servicing may be an important communication link between suppliers and their customers, providing a source of information for equipment manufacturers in making improvements to their machines. When customers and suppliers of equipment collaborate on making improvements, who benefits? Historically, there has not been a linear relationship between productivity and equipment cost-customers continue to demand more for less. Productivity of capital equipment is a critical issue for the entire industry, but there are fundamental questions about how the benefits of improvements should be divided among participants. This presentation will address the questions of who should perform maintenance tasks and related continuous improvement activities, and whether the incentives to do so are adequate. The focus will be service agreements between customers and suppliers of semiconductor processing equipment, and performance measures used in conjunction with incentives