UNIVERSITI TEKNIKAL MALAYSIA MELAKA OPTIMIZING OPERATOR CYCLE TIME IN A SEMICONDUCTOR COMPANY

UNIVERSITI TEKNIKAL MALAYSIA MELAKA OPTIMIZING OPERATOR CYCLE TIME IN A SEMICONDUCTOR COMPANY This report submitted in accordance with requirement of the Universiti Teknikal Malaysia Melaka (UTeM) for the Bachelor Degree of Manufacturing Engineering (Manufacturing Management) with Honors by CHONG JIA MING B051110143 911127045183 FACULTY OF MANUFACTURING ENGINEERING 2015

DECLARATION I hereby, declared this report entitled Optimizing Operator Cycle Time in a Semiconductor Company is the results of my own research except as cited in references. Signature : Author s Name : Chong Jia Ming Date : 26 June 2015

APPROVAL This report is submitted to the Faculty of Manufacturing Engineering of UTeM as a partial fulfillment of the requirements for the degree of Bachelor of Manufacturing Engineering (Manufacturing Management) (Hons.). The member of the supervisory is as follow: (Project Supervisor)

ABSTRAK Kecekapan dalam penggunaan sumber dan strategi pembuatan yang baik adalah penting untuk bersaing dan meningkatkan keuntungan. Keberkesanan penggunaan masa bagi pekerja dalam melaksanakan sebarang tugasan dapat memberi manfaat kepada pengilang. Projek penyelidikan ini dijalankan di sebuah kilang semikonduktor yang terletak di negeri Melaka. Pada ketika ini, non-value added (NVA) activities yang didapati di operasi Front of Line telah memberi kesan kepada masa kitaran pekerja. Kilang tersebut ingin menambahbaikan masa kitaran pekerja dengan mengurangkan NVA activities. Tujuan projek penyelidikan ini adalah untuk menambahbaikan masa kitaran pekerja dengan mengurangkan pembaziran yang disebabkan oleh NVA activities di bahagian pengeluaran. Projek ini akan fokus kepada operasi Front of Line dimana proses tersebut adalah seperti ikatan mati, ikatan wayar dan FAV (Auto Vision). Kajian masa dengan menggunakan jam randik akan digunakan untuk mendapatkan masa pekerja kepada ketiga-tiga proses dan didapati proses ikatan mati mengambil masa kitaran pekerja yang paling banyak. Value added dan NVA activities akan dikenalpasti terhadap proses ikatan mati dengan menggunakan kaedah Lean dan MUDA. Alat bersesuaian seperti carta pie, Ishikawa diagram dan Pareto Chart akan digunakan untuk menganalisis NVA activities. Cadangan penambahbaikan akan diberi untuk membuang dan mengurangkan masa terhadap NVA activities. Kajian terhadap masa dengan menggunakan jam randik akan diulangi untuk mengukur perubahan selepas pelaksanaan penambahbaikan yang dijalankan. Daripada keputusan yang didapati, masa kitaran pekerja telah menurun sebanyak 9.70% selepas penambahbaikan. Kini, pekerja ada masa yang berlebihan untuk fokus kepada aktiviti produktif. i

ABSTRACT Proper use of resources and good manufacturing strategy are important to stay competitive and to increase profit. Effective use of time for direct labors to perform any type of work will benefit the manufacturer. This study was conducted at a semiconductor company located at Melaka. At present, non-value added (NVA) activities in Front of Line operation have significantly lengthen the operator cycle time. The company wants to reduce the efforts for unnecessary activities and free up some time to focus on value added activities. The aim of this study is to improve operator cycle time by minimizing time wastages caused by NVA activities in production floor. The processes in Front of Line operation are die bonding process, wire bonding process and FAV (Auto Vision) process. Stopwatch time study were conducted to obtain the operator cycle times and it was found that die bonding process contributed to the longest operator cycle time. Value added and NVA activities were identified for the die bonding process based on Lean philosophy and MUDA approach. Appropriate tools such as Pie Chart, Ishikawa diagram and Pareto Chart were used to further analyze the NVA activities. Some suggestions were proposed to the case company in order to eliminate or reduce the time taken on these NVA activities. Stopwatch time study was conducted again to evaluate the effectiveness of the proposed improvement. From the result obtained, operator cycle time in die bonding process has improved by 9.70% after implementation of the proposal. Operators are now having extra time to focus on more productive activities. ii

DEDICATION This thesis is dedicated to my beloved family and friends. Thank you for the endless support and love to me. iii

ACKNOWLEDGMENT I would like to take this opportunity to express my deepest gratitude and thanks to my supervisor, Associate Professor Dr Chong Kuan Eng. I am very fortunate to be blessed with the guidance and encouragement from him. He is willing to share his knowledge, explain details to me and always keep me on the correct path whenever I look for him. I would like to express my utmost gratitude to the case company for providing opportunity to me to collect some data for my study. They have given me necessary guidance and arrangement of facilities that make me easier in completing my works. Special thanks to all the people who helped and encouraged me in completing my final year project. I am very thankful and grateful that what they did for me. Without their support, I definitely cannot complete my final year project. Last but not least, sincere thanks to University Teknikal Malaysia Melaka (UTeM) and all the lecturers who shared their knowledge to me during my study life. I will strive to apply the gained knowledge in the best possible way in my working life after graduation. iv

TABLE OF CONTENT Abstrak Abstract Dedication Acknowledgment Table of Content List of Tables List of Figures List of Abbreviations, Symbols and Nomenclatures i ii iii iv v viii ix xi CHAPTER 1: INTRODUCTION 1 1.1 Background of Study 1 1.2 Background of Case Company 2 1.3 Problem Statement 3 1.4 Objectives 3 1.5 Scope 4 1.6 Benefits to the Case Company 4 1.7 Organization 5 CHAPTER 2: LITERATURE REVIEW 6 2.1 Manufacturing Operation 6 2.1.1 Direct and Indirect Labor 8 2.1.2 Direct and Indirect Material 8 2.1.3 Overhead 8 2.2 Productivity 9 2.2.1 Types of Productivity Measures 10 2.2.2 Labor Productivity 10 2.2.2.1 Factors to Increase Labor Productivity 11 2.2.3 Efficiency 12 2.3 The History of Lean 13 2.3.1 Definition of Lean Manufacturing 14 v

2.3.1.1 Lean Tools and Techniques 16 2.3.2 MUDA (The 7 Wastes) 17 2.3.2.1 Minimizing Wastages Approach 20 2.3.3 Introduction to Kaizen 21 2.3.3.1 Application of Kaizen 22 2.3.4 5S 23 2.3.4.1 Application of 5S 24 2.4 Work Study (Motion and Time Study) 25 2.4.1 Work Measurement 26 2.4.1.1 Stopwatch Time Study 27 2.5 Statistical Process Control 28 2.5.1 Pareto Chart 29 2.5.2 Cause and Effect Diagram 30 2.6 Summary 31 CHAPTER 3: METHODOLOGY 32 3.1 Overview of the Project Planning 32 3.1.1 Identify Problem, Scope and Objectives 35 3.1.2 Literature Review (Secondary Data) 35 3.1.3 Design of Methodology 35 3.1.4 Data Collection (Primary Data) 36 3.1.5 Data Analysis 37 3.1.6 Suggestions and Recommendations 37 3.1.7 Implementation and Evaluation 38 3.1.8 Conclusion 38 3.2 Summary 38 CHAPTER 4: PROCESS DESCRIPTION, DATA COLLECTION AND ANALYSIS 39 4.1 Production Lot, Magazines and Lead Frame 39 4.2 Software Employed in Front of Line Operation 40 4.3 Front of Line Operation 41 4.3.1 Die Bonding 42 vi

4.3.1.1 Time Study Spreadsheet for Die Bonding Process 45 4.3.2 Wire Bonding 46 4.3.2.1 Time Study Spreadsheet for Wire Bonding Process 48 4.3.3 Auto Vision (FAV) 49 4.3.3.1 Time Study Spreadsheet for Auto Vision 51 4.4 Analysis for Three Processes 52 4.4.1 Data Analysis for Die Bonding Process 53 4.4.1.1 NVA Activities in Die Bonding Process 55 CHAPTER 5: SUGGESTIONS AND IMPLEMENTATION FOR OPERATOR CYCLE TIME IMPROVEMENT 61 5.1 Suggestions to Reduce NVA activities in Die Bonding Process 61 5.1.1 New Workflow for Clip Buyoff 62 5.1.2 Remove Material Change Checklist 63 5.1.3 Remove x10 Magnification Test 64 5.1.4 Add a New Lot Paper Printing Area 65 5.2 Feedback from Manager in the Case Company 66 5.3 Time Study Spreadsheet for Die Bonding Process (After) 67 5.4 Improvement in Die Bonding Process 68 CHAPTER 6: CONCLUSION AND RECOMMENDATIONS 69 6.1 Conclusion 69 6.2 Recommendations for Future Study 70 REFERENCES 71 APPENDICES A Gantt chart for FYP 1 and FYP 2 B Preliminary data collection C1 Stopwatch time study for die bonding process (before) C2 Stopwatch time study for wire bonding process C3 Stopwatch time study for auto vision C4 Stopwatch time study for die bonding process (after) vii

LIST OF TABLES 2.1 Lean tools and techniques 16 2.2 Time study techniques 26 2.3 Application of Lean in manufacturing industry 31 4.1 Lot, magazine and lead frame 40 4.2 Software used in Front of Line operation 41 4.3 Operator cycle time per lot in three different processes 52 4.4 VA and NVA activities 55 4.5 NVA activities in operators operation 58 5.1 Feedback from company 66 5.2 Summary of improvement sheet 68 viii

LIST OF FIGURES 2.1 Overview of literature review 7 2.2 Manufacturing operation in the conversion of inputs into output 9 2.3 Types of productivity measures 10 2.4 Traditional and Lean manufacturing improvement 15 2.5 Value added and non-value added 17 2.6 Types of wastes 18 2.7 Seven types of wastes in Lean manufacturing 18 2.8 Work study components 25 2.9 Example of Pareto chart 29 2.10 Example of cause and effect diagram 30 3.1 Flow chart for methodology 34 3.2 Example of time study spreadsheet 36 4.1 Overall flow for die bonding process 44 4.2 Part of collected data in die bonding process 46 4.3 Overall flow for ASM wire bonding process 48 4.4 Part of collected data in wire bonding process 49 4.5 Overall flow for FAV process 50 4.6 Part of collected data in auto vision process 51 4.7 Total operator cycle time (in seconds) for die bonding process 54 4.8 Ishikawa diagram 57 4.9 Pareto chart of NVA activities in die bonding process 60 5.1 Clip buy-off procedure 62 5.2 Before and after for clip buyoff 62 5.3 Material change checklist 63 5.4 Graphic user interface for SPACE application 64 5.5 Current printer location 65 5.6 Proposed printer location 66 ix

5.7 Part of the collected data in die bonding process (after) 67 x

LIST OF ABBREVIATIONS, SYMBOLS AND NOMENCLATURES BE - Backend Operation FAV - Front of Line Auto Vision FE - Frontend Operation FYP 1 - Final Year Project 1 FYP 2 - Final Year Project 2 MUDA - Wastes NVA - Non Value Added PC - Process Control SPC - Statistical Process Control VA - Value Added xi

CHAPTER 1 INTRODUCTION This chapter explains the background of study, background of case company, details of problem statement, objectives of the study, scope, expected outcome and organization of the entire report. 1.1 Background of Study This study is to analyze and optimize operator cycle time based on real case study in a semiconductor factory located at Malacca. In recent years, manufacturing industries in Malaysia grow rapidly and play an important role in country s economy. As stated from Altius Directory (2014), Malaysia is ranked in the 23 rd position among the world countries in term of manufacturing industry. Apart from that, it is stated that major manufacturing industry in Malaysia are furniture industries, semiconductor industries and food processing industries. It was estimated that about 48.1% of Malaysia s GDP is contributed from manufacturing industry sector. According to Modi and Thakkar (2014), to survive in a competitive and challenging market, industries need to improve their strength and concentrate on their process flow. Lean manufacturing is the solution to increase the manufacturing profit and quality. Idea of Lean manufacturing is to remove waste from manufacturing process. Waste or non value added activities refer to any activities that consuming more resources than necessary to produce the goods. Company need to identify and eliminate various types of wastes from the manufacturing process to move toward leaner operation. Skills and knowledge on manufacturing engineering are used to 1

conduct this study. For instance, appropriate methods, tools and techniques such as Lean manufacturing concept and stopwatch time study will be applied to solve the problem. 1.2 Background of Case Company The case company is a German semiconductor manufacturer founded on 1999. As of 30 September 2013, the company has 26,725 employees worldwide. It is one of the biggest and well-known multinational semiconductor companies in worldwide. There are two factories located in Malaysia, one is at Kulim, Kedah and the other one is at Batu Berendam, Malacca. For Kulim factory, it is focuses on Frontend operation (FE) whereas for Batu Berendam factory, it is focuses on Backend operation (BE). Mainly, Frontend is the front portion of semiconductor supply chain for wafer fabrication. Backend is back portion of a semiconductor supply chain for assembly and test facilities. A backend manufacturing process comprises of wafer mounting, wafer sawing, die bonding, wire bonding, molding, marking and testing process. Today, factory in Malacca sites has become one of the largest manufacturing sites of case company with the cumulative investment of EUR 1.0 billion. At present, this manufacturing site committed workforce of 7000 employees. In addition, there are four segments in this factory which are Discrete, Logic, Power and Sensor. Each of the segments comprises different packages of products. Therefore, each of the segments has their own specified production line. Examples of products manufactured by this factory are chip card and security, automotive products, industrial power control, mobile devices, power supply and so on. The products from the case company are able to stand out for their reliability, excellence quality and their innovative. The company s products are exported globally through its distribution centers in United States, Europe as well as Asia region. The millions of semiconductor devices produced hourly lead to an annual export volume of over RM 3 billion. Thus, this company is contributing to Malaysia s trade balance and economic growth in the 2

state of Malacca. Besides, the company dedicated to the highest product quality providing exacting solutions to application requirements, increasing efficiency and productivity with unpromising adherence to deliver schedules and protect the environments. The company is looking forward to Zero Defects, continuous improvement and implements the Zero Defects strategy to the next level. 1.3 Problem Statement Operators and machines are the 2 important resources in production line. Effective use of operators is important in manufacturing field for good return of investment. Based on the brainstorming session with company manager, wastes or non-value added (NVA) activities in Front of Line operation have significantly lengthen the operator cycle time. The Front of Line operation includes die bonding, wire bonding and auto vision process. The company does have a standard procedure to measure, track and analysis operators performance. From the result, company believes that there are some improvements that can be made from operators daily operation. Eventually, company would like to improve operator cycle time by reducing the amount of time and effort for unnecessary activities. Company wants to free up some time to focus on value added activities. 1.4 Objectives The main aim of the study is to improve operator cycle time in a semiconductor company. The specific purposes of this study are: i. To conduct stopwatch time study on operators in Front of Line operation. ii. To identify process with longest operator cycle time and the associated NVA activities. iii. To propose and implement new procedures to minimize NVA activities. 3

1.5 Scope Since the case company produces a lot of products therefore only one production line was selected in this study. Study covered only for Power Segment, X module and Front of Line operation. Only one package family was studied under X module. This package family consists of several package classes where the highest demand of package class was selected. The study covered only for Front of Line operation where processes included are die bonding, wire bonding and FAV (Auto Vision). Operators activities, movement and time taken for each sub activities will be the main issue to concern throughout the study. Throughput for each machines and operators movement with any unexpected situation such as no material and machines breakdown were excluded in this study. 1.6 Benefits to the Case Company Key benefit of the study is to improve the operator cycle time in production line. This study helps manufacturer to identify NVA activities for operators in Front of Line operation. It helps to identify the operators activities in production line and minimize the waste occurred at every production steps. In other words, it helps operators to focus more on productive activities as any non-value added activities will be minimized. Apart from this, this study can reduce operator fatigue and workload as any unnecessary activities will be eliminated. Better understanding of work performed by operators in production line helps to develop a better and effective working procedure in manufacturing process. This will help to improve overall performance of the production line. With a better performance, it helps to reduce the overall cost, increase the productivity as well as higher profit gain in future. 4

1.7 Organization This report is included into six chapters. Chapter 1 is the research overview which is the introduction of this study. Chapter 2 provides the literature review where appropriate past research, journals and articles related to this study will be presented. Chapter 3 describes the methods, tools and techniques used to collect and analysis the data. In addition, Chapter 4 presents the process description, data collection and data analysis where it will explain the processes, data and details analysis of the results. Chapter 5 provides suggestions and implementation for operator cycle time improvement where improved data will be collected again and compared to the previous result obtained. Lastly, Chapter 6 includes the discussion of conclusion, major findings and future recommendations for this study. 5

CHAPTER 2 LITERATURE REVIEW This chapter review past studies, books and journals to explain manufacturing operation, direct labor, productivity, Lean principles, Lean tools and techniques, work study and work measurement. Purpose of this review is to identify the related theories and applications in previous research. Furthermore, a flow chart is constructed to visualize the overview of literature review. 2.1 Manufacturing Operation Manufacturing operations produce tangible product, physical goods which can be seen and held (Matthew, n.d.). Stevenson (2009) stated that manufacturing operations is that part of a business organization that is responsible for manufacturing goods. The creation of goods comprises transforming inputs to outputs. Examples of inputs are machines, labor, raw material and capital investment. According to Vitez and Osborne (2014), many companies use manufacturing operations to manufacture goods for customers. They claim that three critical parts of manufacturing operation are direct labor, direct material and overhead which include all the insignificant costs related with the manufacturing process. In addition to the general overviews, a good manufacturing operation able to improve competitiveness, profitability, reduce resources requirements and maximize the throughput. Expertise in manufacturing industry such as production director, factory manager, and industrial engineer always work hard to look for any possible improvement. Figure 2.1 shows the overview of literature review. 6

Manufacturing Financial Operation Marketing Direct Material Direct Labor Overhead Productivity Efficiency Lean Principle Lean Tools and Techniques Kaizen MUDA 5S Work Study Method Study Work Measurement Time Study Figure 2.1: Overview of literature review 7

2.1.1 Direct and Indirect Labor Direct labor is any type of work that is related to the production of goods. Activities of direct labors are involves with the actual process such as operating machine, getting raw materials from inventory, loading and unloading raw materials. Carreira (2007) stated that direct labor is someone who builds the product and directly involved in manufacturing process. In contrast, indirect labor is the work of those who indirectly produce goods but directly support the value added people. A shift supervisor can only be considered as indirect labor since his contribution does not really producing the goods. 2.1.2 Direct and Indirect Material Direct materials include all the raw materials needed to produce a finished good. For example, a semiconductor manufacturer will require wafer, lead frame, clips and other pieces to make a single chip. Without these parts, company will not produce the goods required by the customers (Vitez and Osborne, 2014). Indirect materials are the materials consumed as a part of process. Examples of indirect materials are lot paper used for documentation, stationary such as glue and tape, and safety equipment such as finger coat and jump suit. 2.1.3 Overhead Overhead or known as manufacturing overhead cost involves the costs that are incurred as part of the manufacturing process. Overhead cost excludes direct labor cost and direct material cost which typically used in the manufacturing process. In other words, manufacturing overhead cost is concerned with the expenses of indirect cost but still related with the production (Vitez and Osborne, 2014). Factory facilities, utilities bill and maintenance fees are considered as part of the overhead cost. 8

2.2 Productivity Baines (1997) believed that the productivity movement has been around for more than 50 years. There are plenty of techniques, methodologies and productivity strategies have been developed so far. However, he claimed that the pursuit of improved productivity still seems an imperfect science. Sahar et al. (2013) defined that productivity is the ability of an organization or country to create greater income or value added. In addition, Sahar et al. (2013) also described that Malaysia is taking rigorous step to become an advanced country with high income status by 2020. Therefore, it is essential to have a high productivity in the production process. The term productivity means different things to different people how people look from different angles. This term is interpreted differently by different organizations and in different countries (Baines, 1997). In general, productivity is defined as ratio of output to input, where output refers to anything that created from a production or service. In manufacturing perspective, output usually refers to finished good. Input can be a labor, machine, factory, materials and etc. in converting to an output. Today s productivity improvement has becomes the approaches to enhance the productivity index. Figure 2.2 shows the conversion of inputs to output. Figure 2.2: Manufacturing operation in the conversion of inputs into output (Stevenson, 2009) 9