Common use of Improvement suggestions Clause in Contracts

Improvement suggestions. As we have seen in the last few chapters, ASML faces many supply chain challenges. These coordination issues arise because of the complexity of ASML products and background, market circumstances. This currently leads to a relatively unbalanced supply chain as suppliers “try not to be the bottleneck”. As ASML wants to increase its operational excellence it would be beneficial to have a more predictable supply chain performance. As 90% of the value of the systems are in the supply chain and it is hard for ASML to create flow in its own factory when material availability is relatively unpredictable, improving supply chain performance is essential for becoming operationally excellent. As a result it is proposed that ASML will need to actively collaborate with suppliers to improve total supply chain performance. Next to this it is important for the entire supply chain that the risk in the supply chain is limited to a minimum. As seen in the analysis, increasing the quality of the information can lead to better performance without having to take more risk by buffering more materials. When logistical performance needs to be increased but it is not possible to provide better information, it is argued that ASML and its suppliers should take more risk to be able to better react to unpredictable demand. But this should be done in a balanced way, such that not too little nor too much risk is taking by either of these parties. In order to achieve this it is argued that suppliers need to cooperate not only to design a better mechanism but also to create agreements in which logistical performance is secured and suppliers are willing to perform. But first the focus will be on increasing the quality of supply chain information sharing. 8.1 Improving quality of SC information sharing As increasing the quality of the logistical information, increases the ability to give the same logistical performance with less materials, it is an important step to reducing total need for materials in the supply chain. As mentioned before many suppliers need to absorb unforeseen demand by ordering before actual orders are placed. But it is hard to do this effectively when it isn’t known for which products extra demand will occur. Possible improvements areas for the quality of the logistical information shared are: 1. Were-used info 2. Supplier forecast 3. Non-system demand 4. MR letter 5. Order time vs. reaction time. 6. Re-in priority 7. ERP integration