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Improving Overall Equipment Effectiveness (OEE) through the six sigma

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DOI: 10.1109/IEEM.2014.7058755

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 Improving Overall Equipment Effectiveness (OEE) hrough the Six Sigma
Methodology in a Semiconductor firm: A Case Study
K.C. Ng1, K.E. Chong2, G.G.G. Goh3
1
Infineon Technologies, Melaka, Malaysia
2
Faculty of Manufacturing Engineering, Technical University Malaysia, Melaka
3
Faculty of Business, Multimedia University, Melaka, Malaysia
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I. INTRODUCTION
Overall equipment effectiveness (OEE) is the key
measurable for successful implementation of Total
Productive Maintenance (TPM)[1]. Total productive
maintenance is a key strategy for productivity
improvement in manufacturing. The concept was
introduced by Nagajima[1] and the main motivation of
TPM implementation in the manufacturing industry is to
eliminate the six production big losses[2]. It also describes
the most common causes for efficiency loss. OEE is a
critical metric and focuses on maximizing equipment
effectiveness by reducing equipment downtime[3]. OEE is
also the measures and focus on reducing the total
production operation cost and hence achieved higher
capital productivity[4].
Numerous quality management tools such as,
Toyota Production System (TPS), Total Productive
Maintenance (TPM), Total Quality Management (TQM),
Just In Time (JIT), Failure Mode Effect Analysis (FMEA),
Enterprise Resource Planning (ERP), Design for
Manufacturing DfM), concurrent Engineering and Lean
Manufacturing had been developed in order to achieved
operational excellent[5]. Apart from these manufacturing
978-1-4799-6410-9/14/$31.00 ©2014 IEEE
strategies, Six-sigma methodology, a quality management
tool is widely employed to improve production
performance. Six-sigma was introduced as a quality target
when a Japanese company took over the Motorola factory
in the United State in 1970’s[6]. In the mid of 1980’s, the
revolution starts and the Six-sigma was used as a
methodology for continuous improvement [5]. Six-sigma
is a statistical measure of process capability, which
equivalent to defect rate of 3.4 ppm or 99.99966% of good
parts[6].
This paper will therefore provide a review of the
literature on OEE and Six-Sigma DMAIC methodology.
During this study, by applying the DMAIC approach, data
was collected, analyzed and solutions were formulated in
to improve OEE during TPM implementation in a
semiconductor industry in Malaysia. It is crucial that
practitioners understand the systematic and application of
DMAIC in process improvement or project management.
II. LITERATURE REVIEW
Overall equipment effectiveness is not only used
as an operational measure, but it also serves as an indicator
of process improvement activities within the
manufacturing environment[7]. According to
Nakajima[1], OEE is calculated by multiplying equipment
availability, equipment process performance and quality
yield. It is used to track the effectiveness of improvement
after TPM implemented in an organization[7].
Overall equipment effectiveness (OEE) is a
function of equipment availability, process performance
and quality yield [7] . These three elements measure the
equipment and production losses experienced. Nakajima
grouped and defined these losses into what is termed as
production’s six big losses [8]. The six major losses are
equipment breakdown losses, setup and adjustment losses,
minor stoppage losses, speed reduction losses, defective
losses and start up losses[8]. Equipment and setup losses
are considered as time lost which are used for equipment
availability calculation. The minor stoppages and speed
reduction losses are used to determine equipment process
performance efficiency[8]. On the other hand, defective
and start up losses are categorized as quality yield losses.
OEE is therefore the product equipment availability,
equipment process performance and quality yield[8].
Based on the study conducted by Chand and
Shirvani[9] in a cellular manufacturing company in the
United Kingdom, it was found that it is worthwhile for the
company to implement TPM as a strategy in order to
remain competitive. They found that the company was
 Proceedings of the 2014 IEEE IEEM
able to attain world-class manufacturing performance with
the collaboration data collected[9]. In order to be
classified as ‘world class manufacturing’, the company
must achieve equipment availability that is greater than
90%, process performance efficiency that is more than
95%, achieve a quality yield that is greater than 99% and
obtained overall equipment effectiveness (OEE) that is
greater than 85%”[9].
According to the father of TPM Nagajima, OEE is
the measure or key performance indicator for the
effectiveness of TPM implementation[1, 8]. It is also the
metric for the hidden equipment losses. OEE is able to
identify equipment down time and hence improve the
machine performance by reducing the down time and
availability of the equipment. Dal et al. [7] highly
recommended that OEE be used as an operational metric
and indices of continuous improvement activities in the
manufacturing industry. It is further validated by
Gibbson[10] that improving overall equipment efficiency
using a lean six-sigma DMAIC methodology in the
improvement process.
Two clearly defined main phases of six-sigma is
the process characterisation and process optimisation.
Process Characterisation firstly identifies what needs to be
changed based on data and facts collected. In the process
optimisation phase, solutions are developed to improve the
existing process [11].
There are four main phases in the Six Sigma strategy.
The phases through an improvement task is define phase,
measure phase, analyses phase, improve phase and control
phase [11]. Phase one is get clarity about the problem and
the expected results. In phase two, the team need to
identify the performance of the existing process and
identify the levers that can be used to for performance
improvement in state three. In the improve phase, team
need to find out and verify a solution ensuring the
achievement of the improvement targets and finally in
control phase, team must ensure that improvements are
stable over time [11].
Based on a case study done by Nilmani S and
Shidhar [5] in a leading manufacturing firm producing
automotive components, the company was able to
improve the process yield from 44% to 90% after applying
the DMAIC six –sigma methodology. The process
capability sigma level through DMAIC approach was
found improved from 2.91 to 4.43sigma [5].
Mandahawi et al. [12] performed a case study at
a paper manufacturing company and revealed that the
Overall Equipment Effectiveness (OEE) for the printing
and cutting machines has improved by 21.6% and 48.45%
respectively [12]. Applying the lean Six Sigma systematic
methodology has enhanced the performance and OEE of
equipments and hence improves overall manufacturing
performances.
According to Gibbons [10], by incorporating and
applying Six Sigma and asset management strategy in a
well-known manufacturing company in United Kingdom.
Overall equipment effectiveness improved significantly
from 40% to 85%. He also concluded that by using the
DMAIC approach provided a systematic improvement the
kaizen and problem solving process. Moreover, this kind
of process improvement approach resulted in a sustainable
and stable process [10].
The Six Sigma DMAIC methodology is a proven
and effective problem solving tool and approach for any
manufacturing and service industry in order to understand
a problem clearly and to install effective improvement and
solution to an operation. There are many research papers
on successful Six Sigma implementations for quality, cost,
delivery, speed and customer satisfaction in achieving
operational excellent [5, 10-17]
III. RESEARCH METHOD
A case study was conducted in a multi-million
dollar company Semiconductor Manufacturer founded in
1999 in Malaysia. The company focuses on three major
divisions which are automotive, industrial electronics and
chip card and security applications. In automotive division,
this company serves as the world’s second largest chip
supplier to this industry.
This study focused on the taping process, is the
bottleneck area for this package. The machine purchased
to tape the part is henceforth referred to as the Taping
Machine. It consists of input, machine and output. For the
input, materials such as wafer, frame, foil, magazine,
carrier tape, cover tape and empty reels will be used to
load into the taping machine. The machine will perform
the visual inspection and electrical test on the chip. For the
output, the chip will be placed inside the reel by the taping
process.
The equipment experienced low throughput and
low overall equipment effectiveness (OEE) during
production. The main reason for the low OEE is mainly
due to the high machine downtime during taping process.
This high machine downtime has been identified and the
company decided to form a focus team to improve the poor
production performance. The team decided to adopt the
Six Sigma approach in order to improve the OEE. The
current OEE of the equipment is at 70% and the planned
OEE is 80% by reducing the equipment downtime from
12% to 7% in order to fulfill customer demand in the
planning stage.
IV RESULTS AND DISCUSSION
In this section describes and illustrates how the
DMAIC approach was used to improve the overall
equipment effectiveness at the taping machine in the
company.
Define stage
Define is the first stage in the DMAIC methodology.
The purpose of the define phase is to clearly understand
and identify the business problem, project goal, potential
resources, constraint, budget, project charter and the
critical process output as shown in the Project Charter in
Figure 1. A team comprising of manager, engineer,
technician and operator was formed for this purpose.
In problem description, the purpose is to clearly
identify the problem by facts using 12-dimension mode.
 Proceedings of the 2014 IEEE IEEM

(Refer to Figure 2). A good problem description should

not include root cause and solution of non-conformity. In
this case, the final problem statement is OEE loss of 7% in
the taping machine in Thin Super Small Leadless Packages
(TSSLP) package due to high equipment scheduled down
time.

Improve Taping OEE from 73%-80% by reducing equipment

Project Background
unscheduled downtime from 12% to 5%

Scope TSSLP Is-taping Machine

To improve OEE from 73% to 80% ( 7% improvement)

Objective
To improve equipment scheduled downtime from 12% to 5% Figure 3: SIPOC diagram
UPS Package owner = Jee MT , Tan WS, maintenance= Lai
Resource
BC, equipment=Eugene Siow, production support = Kam CL

Project Sponsor Alan Ng Kam Choi

Benefit Estimate figure ~ , €133 k (RM536k) per annual .

Potential Constraint Miniature packages running in high speed machine.

Project Metric OEE, Equipment Scheduled Down time and cost saving.

Figure 1: Project Charter

Dimension IS
What is the specific object you are having a nonconformity with? Taping process
1
What is wrong with the the object? (nonconformity) Low OEE due to high
2 scheduled down time
3 Geographically where was the object when the nonconformity was Is-taper machine
noticed first?
Where is the nonconformity located on the object? High equipment scheduled Figure 4: Voice of Customer
4 down time
At which time and date was the nonconformity first noticed? August 12
5 Measured Phase:
6 What is the pattern of occurrences? (over time) Increasing over volume
What is the type of the nonconformity? increase during taping. In this phase, potential sources for non –
Random. conformity in the process is identified. The actual process
7 Where in the sequence of events (process steps) of the object was Output qty are less during end
the nonconformity first noticed? of each shift capability is measured at the potential sources for the non-
8 How many objects have the same nonconformity? or 12% , August 2013 conformity. They provide objective proofs of progress and
How many incidents have been reported?
success, as well as early warning of impending failure. In
9 How many faults are there on one object? 1
10 What is the (financial) impact of the nonconformity? Or How bad Low OEE -> output less -> $
this study, the sources of the non-conformity are identified
is the nonconformity? loss RM1543K (€ 384K ) through process mapping and process data aspect. Process
11 Is the number of objects with the same nonconformity growing/ Increasing with volume.
staying the same, stable / decreasing?
mapping of the taping equipment losses were prepared by
Is the nonconformity getting worse / stable / getting better? Worse mapping each machine module to various sub activities
12
involved in the daily process.
Figure 2: 12 dimension modes to identify problem In addition, a Fish Bone diagram was also constructed
description to identify the possible causes for non-conformity. Based
on the Fish Bone diagram in Figure 5, two possible
SIPOC is a process map that helps to understand hypotheses are formed:
and identify process boundaries and key processes to a. Flipper module causes the taping machine having the
ensure always focus only customer. SIPOC helps to highest down time and cause low OEE
identify key input factors that deliver the output b. Z-alignment parameter off-set causing the high down
response, and describes from where of the data time of the machine
collected should started. Figure 3 shows the 2nd level
of SIPOC diagram for the taping process in the
machine which is the main focus of this research.

The purpose of voice of customer is to understand

the customer expectations and needs, and transform it
into measurable and valuable figure, please refer to
figure 4. Critical to quality (CtQ) helps to ensure the
focused object is the customer’s need and hence it
could help to keep the project on right track.

Figure 5: Fish bone diagram

 Proceedings of the 2014 IEEE IEEM

Analyze Phase Analysis of the equipment down time caused by

In the analyze phase, the hypothesis created is proven
with facts and data. Data was collected across all Taping
modules. Base on the Chi square analysis as per figure 6,
the first hypothesis was accepted, implying that the flipper
module contributes to highest down time losses among all
Taping modules.
the inaccuracies of the rotating arm by loose dowel pin and
bearing was done. The Dowel pin acts as a joint and a
guide pin for the rotary arm to complete a flipping. During
the process, rotary arm will grip the dowel pin and flip the
arm shaft 180 degree to the next arm. The loose dowel pin
caused by the mechanical tolerance affects flipping
accuracy.
The problem was rectified with the redesign of
the dowel pin with fixed screw to prevent loose. The screw
is fit into the rotary arm during flipping for precise unit
drop onto opposite arm. To increase the stability, the two
removable arms are replaced with two fixed arms to enable
fitting of larger bearing, refer to Figure 8.

Figure 6: Source of the flipper down time

In the second hypothesis, 3 parameters were

varied to ensure the Z parameter is critical in units flying
which causing machine down are the Z teach close
parameter, Z pick up height parameter and Z drop
parameter. Base on chi square analysis, second hypothesis
is rejected for p>0.05. Z parameter is not significant in the
machines’ down time losses. Therefore, the flipper module
was the focus in this case study. Refer to Figure 7 for the
Chi Square Analysis

Figure 8: New Flipper module with two fix arms

Data collected for comparison of current design
and new design. Proportional test showing p value < 0.05,
with significant difference result between the samples,
(refer to Figure 9 below)

Figure 7: Chi Square Analysis on Z Parameters

The Flipper module:

The flipper module is an integral part of the
Taping machine handler. In reality, most test handlers that
have units in wafer form as inputs tend to have a similar
module or mechanism present. The reason for this is
simple, the inputs to the test handler are units that have
their active areas, the contact pads, facing upwards. Upon Figure 9: 2 Sample Proportional Test
singulation, each unit is held by vacuum suction by the Improve/Control Phase
pipettes; hence the contact pads are covered. To enable The part is proven with positive results in one
testing of the units, hence, we need the flipper module to machine, hence the same design was replicated to other
“invert” the units so that we are able to have test probes to Taping Machines over a duration of a few weeks. Figure
contact these pads. 10 shows the OEE trend performance before and after the
A highest challenge of flipper module is the flipper modifications being done across this period.
precision of the pickup head to flip the units to rubber tip
with top speed in 130ms. Based on observations from high
speed camera, units are missing during the flip process.
This requires the critical precision of the arm to flip the
unit onto the opposite arm. Hence, the hypothesis was
created that the loose dowel pin affects the flipping
accuracy for drop and pick point.
 Proceedings of the 2014 IEEE IEEM
Figure 10: OEE trend after improvement of flipper
V. CONCLUSION
DMAIC approach helped to identified and defines
clearly the problem at the defined stage. It provides a
systematic methodology by providing step by step analysis
in to micro levels in order to obtain the real root cause and
later provide effective solution to resolve the problem
permanently. In the case study, the instability of the pin
shaft during flipper arm turning causing misplace of the
unit in pick up arm and resulted equipment breakdown
which cause low OEE. The improvement of flipper design
change to bearing shaft and 2 removable arms helps to
reduce the equipment down time by 6.5% and improved
the equipment OEE from 70% to 80%. The saving helps
the company improve the productivity with cost saving
RM663K per annual, and hence overall efficiency is
improved. The parts continue to fan out to other Is-Taper
machines as it has given a significant success to the
organization.
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