Exhibit 1 shows the telltale signs of a fab losing operational control and increasing variance over a five-year period. Stable operations in the first two years rapidly give way to increased mix and demand changes in year three. Management attempts to compensate by starting additional WIP to drive additional moves and outs. This increased mix and WIP leads to increased downtime from conversions and clogs in the line, which result in a rapid escalation of cycle time, utilization reductions, and increased variance. Ultimately, this change in demand creates significantly worse outcomes for the fab—for example, the product takes longer to reach customers and capacity planning takes even longer to predict. Although improving tool performance helps solve aspects of this line balance problem, the key to solving line balance is counterintuitive: ultimately, by reducing starts and overall WIP levels to those of years one and two, batch producing wafers to combat the conversion complications, and building inventory buffer stock at the back end of line (to reduce shipment variance), the fab is able to bring its performance to a much more stable operation over the course of year five.