Due to the fabless characteristic of the IC design industry, all the production and manufacturing procedures of the entire product have been outsourced to outsourcing foundries/fabs, therefore subcontractor’s performance will also affect the competitiveness of IC design companies. Managers need a simple and reliable method of supplier performance ratings for production decisions reference. The purpose of this study is to apply the Theory of Constraints (TOC) which proposed sub-system performance indicators throughput dollar-day (TDD) for using in subcontractor performance indicators rating and study the feasibility of using TDD as a performance indicators for IC design industry outsource management. The TDD is easier than the current measure of outsourcing can be clearly demonstrated both advantage and disadvantage of outsourcing factory. Finally, this study provides a convenience and reliability of performance measurement indicators, so that manager can do good work for subcontractor’s performance measurement and support manager to do outsourcing decisions, and strengthen company competitive advantage.
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