Critical material planning for TFT-LCD production industry

This research focuses on the material planning problem in the thin-film transistor liquid crystal display (TFT-LCD) manufacturing industry. With the growth in TFT-LCD display applications, TFT-LCD manufacturing has become the new high-technology industry after semiconductor manufacturing. The final process of the TFT-LCD industry, the module process, is a material-oriented assembly production system that fabricates the panels produced from the preceding process and critical materials such as integrated circuit (IC), printed circuit board (PCB), and backlight (BL) into customized TFT-LCD products according to different customer requirements. In addition, there are many specific characteristics such as alternative bill of material (ABOM), customer preference for ABOM, and purchase quantity ratio occurring in the TFT-LCD industry. However, because of the uniqueness of the TFT-LCD industry, material planning called critical material planning (CMP) must use a feasible and optimal purchase plan under these specific characteristics and constraints; also, the traditional material requirement planning (MRP) mechanism is no longer enough to deal with its planning problems. In response to this challenge, the current paper formulates a single-period and multi-period CMP problem as nonlinear programming models represented by the network graph. The purpose of this is to optimize the purchase quantity from suppliers while satisfying demand under the existence of specific characteristics. Additionally, we illustrate a numerical example from a real TFT-LCD manufacturer to clarify the multi-period CMP model; the managerial implications of the customer preference factors and the purchase quantity ratio are also correspondingly discussed.