Muthiah2007 Overall Throughput Effectiveness (OTE) Metric For Factory-Level Performance Monitoring and Bottleneck Detection

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Overall throughput effectiveness (OTE)

metric for factory-level performance
monitoring and bottleneck detection
a a
K. M. N. Muthiah & S. H. Huang
a
Department of Mechanical, Industrial and Nuclear Engineering,
Intelligent Systems Laboratory , University of Cincinnati ,
Cincinnati, OH 45221, USA
Published online: 31 Aug 2007.
To cite this article: K. M. N. Muthiah & S. H. Huang (2007) Overall throughput effectiveness (OTE)
metric for factory-level performance monitoring and bottleneck detection, International Journal of
Production Research, 45:20, 4753-4769, DOI: 10.1080/00207540600786731
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International Journal of Production Research,
Vol. 45, No. 20, 15 October 2007, 47534769
Overall throughput effectiveness (OTE) metric for factory-level

performance monitoring and bottleneck detection
K. M. N. MUTHIAH* and S. H. HUANG
Department of Mechanical, Industrial and Nuclear Engineering, Intelligent Systems Laboratory,

University of Cincinnati, Cincinnati, OH 45221, USA
(Revision received March 2006)

Downloaded by [Dicle University] at 11:14 12 November 2014
Seiichi Nakajima provided overall equipment effectiveness (OEE) to measure

productivity and perform diagnostics at the equipment level. However, a
literature review indicates that such metrics are lacking at the factory level.
In order to address this gap, an overall throughput effectiveness (OTE) metric is
developed. The purpose of OTE is twofold: it measures factory-level performance
and can also be used for performing factory-level diagnostics such as
bottleneck detection and identifying hidden capacity. The task of coming up
with such a metric was achieved by defining a set of commonly occurring
predefined subsystems including series, parallel, assembly and expansion. OTE
was developed for each of these predefined subsystems. It also accounts for
subsystems processing multiple products and performing rework. Any factory
layout can be modelled using a combination of the predefined subsystems,
which allows determination of the overall factory effectiveness (OFE).
More importantly, OTE has the potential to automate the entire factory-level
performance diagnostics, hence drive continuous productivity improvement
quantitatively. This paper explains the OTE development methodology,
validates the developed OTE metrics and demonstrates its diagnostic ability.
Application of OTE to a wafer fab and glass manufacturing case study showed
that productivity bottleneck and opportunities for improvement can be identified
quantitatively.
Keywords: Productivity; Overall equipment effectiveness; Overall throughput

effectiveness; Bottleneck detection; Hidden capacity; Overall factory effectiveness;
Continuous productivity improvement
1. Introduction
Overall equipment effectiveness (OEE) was recognized as a fundamental method for

measuring equipment performance beginning in the late 1980s and early 1990s. Now
it is accepted as a primary performance metric (Hansen 2002). The OEE measure
*Corresponding author. Email: sam.huang@uc.edu
International Journal of Production Research

ISSN 00207543 print/ISSN 1366588X online 2007 Taylor & Francis
http://www.tandf.co.uk/journals
DOI: 10.1080/00207540600786731
4754 K. M. N. Muthiah and S. H. Huang
attempts to reveal the hidden costs associated with a piece of equipment. When it is
applied by autonomous small groups on the shop-floor together with quality control
tools, OEE is an important complement to the traditional top-down-oriented
performance measurement systems (Jonsson and Lesshammar 1999). Hansen (2002)
mentioned that using OEE metrics and establishing a disciplined equipment
performance reporting system will help a manufacturing system to focus on the
parameters critical to its success. Analysing OEE categories can reveal the
greatest limits to success. If a plant is in the envious position of selling everything
it can make, then hidden factory is the difference between what good products were
transferred out in the past 12 months and what could be made in 8760 h of perfect
production. World class companies are known for an attribute. They are built
around the concept that an effective factory producing good goods as needed
to meet market demands is a valuable asset for any company to have. Companies
with the most effective factories will have the staying power to be the long-term
survivors, assuming that the need for the product is continuous. The size of
the opportunities for business improvement varies proportionately with the level
of information-sharing throughout the company.
Scott and Pisa (1998) pointed out that the gains made in OEE, while important
and ongoing, are insufficient. It is necessary to focus ones attention beyond the
performance of individual tools towards the performance of the whole factory.
The ultimate objective is a highly efficient integrated system, not brilliant individual
tools. They coined the term overall factory effectiveness (OFE), which is about
combining activities and relationships between different machines and processes, and
integrating information, decisions, and actions across many independent systems and
subsystems.
There is considerable amount of literature on manufacturing system productivity
measurement and improvement. Muthiah and Huang (2006) reviewed and
categorized various productivity improvement methods. Operations research-based
methods (e.g. optimization, network computation) and control theoretical methods
are based on rigorous mathematical modelling. System analysis based methods
(e.g. IDEF, Petri net) for productivity improvement are driven by information
systems. Continuous productivity improvement methods (e.g. lean manufacturing,
six Sigma) are primarily empirical methods established by practice. The focus of
this paper is performance metrics-based methods. The review of performance
metrics-based methods indicates that quantitative metrics for measuring
factory-level productivity and for performing factory-level diagnostics (bottleneck
detection, hidden capacity identification) are lacking.
This paper addresses this gap and presents the OTE metrics that could be
used for factory-level performance monitoring and diagnostics. The paper is
organized as follows. Following the Introduction section, section 2 presents related
work in factory-level performance diagnostics. Section 3 presents the concept
of theoretical OEE, followed by the development and validation of OTE metrics.
In section 4, OFE computation and the bottleneck detection ability of OTE
are illustrated. To illustrate the application of the developed metrics in a real-
world scenario, two case studies are discussed in section 5. Finally, section 6 draws
conclusions regarding the utility and applicability of OTE and it discusses future
research scope.
OTE metric for factory-level performance monitoring and bottleneck detection 4755
2. Related work
Conventional or unit-based OEE measures the equipments productivity relative to

its maximum capability, which is assumed constant during the time period (total
time) for measuring performance. OEE is defined as (Nakajima 1988):
OEE Aeff Peff Qeff , 1
where Aeff is the availability efficiency that captures the deleterious effects due to
breakdowns, set-ups, and adjustments; Peff is the performance efficiency that
captures productivity loss due to reduced speed, idling, and minor stoppages; and
Qeff is the quality efficiency that captures loss due to defects, rework, and yield.
These three components of OEE are calculated as follows:
TU
Aeff 2
TT
TP Ract
Peff NOR SR 3
TU Rth
Pg
Qeff , 4
Pa
where
TU uptime of the equipment,
TT total observation time of the equipment,
NOR net operating rate,
SR speed ratio,
TP production time of the equipment,
Ract actual processing rate of the equipment,
Rth theoretical processing rate of the equipment,
Pg good product output from the equipment,
Pa actual products processed by the equipment during the observation time.
OEE has been used extensively for equipment productivity improvement,
especially in the semiconductor industry (Ames et al. 1995, Bonal et al. 1996,
Giegling et al. 1997, Leachman 1997, SEMI E79-0200 2000). Semiconductor
Equipment and Materials International (SEMI) is now pioneering the development
of OFE metrics (SEMI E124-0703 2003). However, the metrics are geared towards
semiconductor manufacturing. SEMI metrics are intended for evaluating the overall
efficiency of semiconductor manufacturing, not for diagnosing problems (identifying
bottleneck/opportunities for improvement) in the factory. Therefore, their utility is
limited.
An attempt was made by Huang et al. (2002, 2003) to come up with factory-level
diagnostic metrics. However, there were major unaddressed issues. (1) The OTE
metrics defined needed good product output from the factory for computation.
Hence, it cannot be used for factory-level diagnostics such as bottleneck detection.
(2) The OTE metrics developed then were for series and parallel subsystems alone.
This was not sufficient to compute OFE as it lacked constructs to model a factory by
capturing the equipment connectivity information. (3) The OTE metrics developed
were not statistically validated. This paper, apart from addressing all these issues,
explains the theoretical OEE concept, OTE development methodology, validates the
developed OTE metrics, and demonstrates its diagnostic ability.
3. Overall throughput effectiveness (OTE)
3.1 Theoretical OEE

The OTE metric presented in this paper is a function of theoretical OEE, which is a
modified version of the conventional OEE developed by Nakajima (1988). Figure 1
shows how theoretical OEE is computed. One can see that theoretical OEE differs
from conventional OEE in terms of performance efficiency (Peff) computation. Note
that the Peff in conventional OEE accounts for equipment idle time, i.e. the time
when equipment is ready for production but there are no parts available to be
processed. This productivity loss is due to poor factory operations (because of
material-handling problems or factory design flaws such as unbalanced line, etc.)
rather than caused by the equipment. Therefore, we argue that it should be captured
by factory-level metrics. This is the motivation for proposing the theoretical OEE
concept, which captures productivity loss caused solely by the equipment alone.
3.2 OTE development

The OTE metrics are developed based on the idea of comparing actual productivity
to maximum attainable productivity, which is the same idea behind the development
of OEE. Note that the OEE in equation (1) can be further simplified as:
Actual throughput units from equipment in total time
OEE : 5
Theoretical throughtput units from equipment in total time
By extending this definition to the factory level, we have:
Actual throughput units from factory in total time
OTE : 6
Theoretical throughput units from factory in total time
Four major types of unique sub-systems, namely series, parallel, assembly and
expansion, are defined, as shown in figure 2. Equipment is numbered sequentially
from 1 to n in figure 2. Equipment marked a is the assembly station and equipment
marked e is the expansion station.
The OTE metrics for these four unique subsystems are derived based on a system
constraint approach that accounts for equipment idle time. The idea is as follows.
If a part needs to be processed by equipment A before it can be processed by
equipment B (e.g. A and B are connected in series), then the amount of good product
output from equipment B is constrained by those from equipment A. If equipment B
does not experience idle time due to the lack of output from equipment A, then good
product output from equipment B depends on its theoretical OEE, its theoretical
processing rate, and the total time of production; otherwise, good product output
is constrained by what equipment A can produce and the quality efficiency of
equipment B. The derived OTE metrics are shown in table 1, where OEE(i) denotes
theoretical OEE of equipment i, Rth(i) denotes theoretical processing rate of
Total time (Tt)
Availability Efficiency
Plant
Plant operating time (Aeff ) = Tu /Tt
Shutdown
Setup &
Scheduled Failure Equipment
adjustment
downtime Time operation time (Tu )
time
Actual processing time (Tact)

Performance Efficiency
(Peff ) = Tth /Tact
Minor
stoppages & Theoretical processing time (Tth)
speed losses
Actual product units processed (Pa )
Quality Efficiency
(Qeff ) = Pg /Pa
Scrap Good product output (Pg)
Theoretical OEE = Aeff*Peff*Qeff
Figure 1. Theoretical overall equipment effectiveness (OEE).
equipment i, Qeff(i) denotes quality efficiency of equipment i, kA(i) denotes number of

parts needed from equipment i to make a final assembly, suffix (a) denotes assembly
station, kE(i) denotes number of parts proceeding to equipment i from the expansion
station, suffix (e) denotes the expansion station, TT is the total time of observation,
and N denotes the total number of parts resulted from processing one part in the
expansion station.
The metrics shown in table 1 are developed based on the assumption that a piece
of equipment only processes one type of product and no parts go through rework.
In reality, a piece of equipment may need to process multiple products and some
parts do go through rework. Rework can be viewed as a piece of equipment
processing two different products, and thus it is a special case of multiple products.
1. Series 2. Parallel
1
2
1 2 n
3. Assembly 4. Expansion
1
1
2 a
e 2
n n
Figure 2. Four unique subsystems.
Table 1. Overall throughput effectiveness (OTE) metrics.
Subsystem OTE
n n Q o o
min mini1,2,...,n1 OEEi Rthi nji1 Qeff j ,OEEn Rthn
Series
mini1,2,...,n fRthi g
Pn
i1 OEEi Rthi
Parallel Pn
i1 Rthi

min mini1,2,...,n fOEEi Rthi =kAi Qeffa g,Rtha OEEa
Assembly
min mini1,2,...,n fRthi =kAi g,Rtha
Pn
i1 minfRthe OEEe kEi Qeffi ,Rthi OEEi g
Expansion Pn
i1 minfRthe kEi ,Rthi g
Therefore, we only need to address the issue of a piece of equipment processing

multiple products. This requires equations for calculating Rth(i), Qeff(i), and OEE(i) to
be used in the OTE metrics.
Assuming equipment i processes n different products. Without loss of generality,
let Qeff(ij) and Rth(ij) denote the quality efficiency and theoretical processing rate of
respectively. Let X(ij) be the
equipment i when processing product j ( j 1, 2, . . . , n),P
product mix percentage of product j at equipment i ( nj1 Xij 1, 8i). Rth(i) and
Qeff(i) for multiple products can be calculated as follows:
X
n
Rthi Xij Rthij 7
j1
X
n
Qeffi Xij Qeffij : 8
j1
Assuming the availability of equipment i, Aeff(i), remains the same irrespective

of the product type. Let Ract(ij) be the actual average processing rate (total number of
parts processed divided by actual processing time) of equipment i when processing
product j. OEE(i) can be calculated as follows:
Pn
j1 Xij Ractij
OEEi Aeffi Pn Qeffi : 9
j1 Xij Rthij
This OEE(i) is then used in the appropriate OTE metric shown in table 1.
3.3 OTE validation

The analytically developed OTE metrics are validated using numerical simulation as
follows. For each subsystem, a simulation model is built capturing the architecture as
proposed in figure 2. The theoretical subsystem throughput is obtained by setting
the theoretical OEE of individual pieces of equipment to 100%. The actual
subsystem throughput is obtained by simulating the subsystem under various loss
scenarios. It should be noted that, there are multiple equipment in each subsystem
simulation model considered for validation. Detailed subsystem configurations
used for validation including efficiency levels can be found in Muthiah (2003).
Specifically, each of the three components of equipment theoretical OEE (Aeff, Peff,
and Qeff) is set at two levels, high and low, to generate eight cases for validation. For
example, when Aeff is low, it is set at low for all the equipment in the subsystem. The
subsystem throughput efficiency is the ratio of the actual throughput to theoretical
throughput equation (6) and let us call it the simulation OTE. If the OTE metric is
valid, it should be the same as simulation OTE. Validation is conducted by testing
the following hypothesis:
H0: OTE simulation OTE

H1: OTE 6 simulation OTE:
Hypothesis testing requires the determination of significance level and sample size.
A significance level of 5% ( 0.05) is used as it is typical in any hypothesis testing
procedure. The sample size plays a critical role in hypothesis testing and there are
different methods for determining an appropriate sample size (Banks et al. 2001).
The percentage change in the first four moments (mean, variance, skewness, and
kurtosis) of subsystem throughput is recorded as sample size increases. Maximum of
four moments converging point is taken as the appropriate sample size for better
precision. Arena 5.0 was used to build subsystem simulation models and to
determine appropriate sample size.
The simulation results for all the subsystems are shown in tables 25, respectively.
Multiple product and rework scenarios are also validated which is not shown here
for brevity. However, one can refer to Muthiah (2003) for details. The
validation tables showed that the null hypotheses (H0: OTE simulation OTE)
cannot be rejected in any case for all the subsystems. This could be observed from the
p-values in tables 25. Thus, the developed OTE metrics are validated.
Table 2. Overall throughput effectiveness (OTE) validation series subsystem.
Simulation
Simulation OTE (standard
Case number Qeff, Aeff, Peff OTE OTE (mean) deviation) p
1 Low, low, low 0.4190 0.4155 0.04009 0.0841

2 Low, low, high 0.5158 0.5114 0.04612 0.0556
3 Low, high, low 0.7088 0.7078 0.01580 0.2112
4 Low, high, high 0.8609 0.8607 0.01630 0.8494
5 High, low, low 0.4542 0.4530 0.03726 0.4968
6 High, low, high 0.5517 0.5525 0.04566 0.7346
7 High, high, low 0.7386 0.7384 0.00621 0.4442
8 High, high, high 0.8971 0.8973 0.00744 0.7330
Table 3. Overall throughput effectiveness (OTE) validation parallel subsystem.
Simulation
1 Low, low, low 0.4227 0.4224 0.00839 0.55018

2 Low, low, high 0.5211 0.5208 0.01069 0.57298
3 Low, high, low 0.6963 0.6963 0.00684 0.85885
4 Low, high, high 0.8584 0.8587 0.00771 0.35261
5 High, low, low 0.4405 0.4404 0.00693 0.90161
6 High, low, high 0.5430 0.5429 0.00938 0.86287
7 High, high, low 0.7256 0.7255 0.00342 0.44608
8 High, high, high 0.8945 0.8947 0.00407 0.26283
Table 4. Overall throughput effectiveness (OTE) validation assembly subsystem.
Simulation
1 Low, low, low 0.3971 0.3985 0.02138 0.203624

2 Low, low, high 0.4964 0.4977 0.02646 0.338583
3 Low, high, low 0.6426 0.6431 0.01869 0.578035
4 Low, high, high 0.8033 0.8038 0.02162 0.598167
5 High, low, low 0.4312 0.4308 0.01708 0.578498
6 High, low, high 0.5391 0.5385 0.05208 0.803781
7 High, high, low 0.6978 0.6969 0.00931 0.058582
8 High, high, high 0.8723 0.8715 0.01046 0.124128
4. Bottleneck detection
OTE metrics are a function of the individual equipment productivity (theoretical

OEE), hence they can be used for diagnostic purpose. OTE could be used to perform
diagnostics for any capacity-constrained manufacturing environment such as
Table 5. Overall throughput effectiveness (OTE) validation expansion subsystem.
Simulation
1 Low, low, low 0.4169 0.4160 0.00986 0.080342

2 Low, low, high 0.5174 0.5180 0.00688 0.073865
3 Low, high, low 0.6908 0.6910 0.00844 0.694017
4 Low, high, high 0.8573 0.8580 0.00998 0.136202
5 High, low, low 0.4344 0.4340 0.00824 0.312678
6 High, low, high 0.5392 0.5400 0.01146 0.147317
7 High, high, low 0.7199 0.7200 0.00416 0.706441
8 High, high, high 0.8933 0.8930 0.00482 0.147337
Table 6. KANBAN system data.
Equipment 1 Equipment 2 Equipment 3
Actual processing time (min) TRI(6.1, 6.2, 6.3) TRI(7.4, 7.68, 7.8) TRI(9.0, 9.4, 9.7)
Theoretical processing time (min) 5 7 9
Total time (min) 1440 1440 1440
Uptime (min) 1393.86 1393.54 1398.05
Quality level (%) 100 100 100
semiconductor manufacturing. This section highlights the bottleneck detection

ability of OTE in a Just-in-Time (JIT) environment. Traditionally, queue length or
work-in-progress (WIP) is used to identify bottleneck. However, this method is not
effective in the modern JIT manufacturing environment. There are many elements of
JIT including streamlining process flow, smoothing build-up rate, ordering demand
as closely as possible, small lots, minimum set-up times, buffer stock removal, high-
quality levels, production and process simplification, using standard containers,
preventive maintenance, flexible workforce, organization in modules or cells,
continuous improvement, and KANBAN (Korgaonker 1992). The essence of
KANBAN is that a supplier or the warehouse should only deliver components to the
production line as and when they are needed so that there is no storage in the
production area. This will result in WIP reduction. Hence, when a KANBAN system
is deployed in a factory, queue length will not be a valid indicator for bottleneck
detection.
A simulation model of a KANBAN system is built with three pieces of equipment
in series. Parts arrive exponentially with a mean of 5 min in a storage area. A batch of
five parts is sent to a piece of equipment only when the equipment finishes processing
the last part of the previous batch. Table 6 shows the data used for the KANBAN
system simulation model. The system is simulated for 1 day with 40 replications and
the queue statistics are shown in table 7. A statistical test showed that there are no
significant differences among the queue lengths at the three pieces of equipment
(table 8). Therefore, we are unable to identify the bottleneck based on queue length
analysis.
Table 7. KANBAN system queue statistics.
Queue equipment Average length Standard deviation
1 5.4309 2.6481
2 5.3467 2.0538
3 5.3424 2.1806
Table 8. Statistical test on queue length.
Average queue
Case number lengths compared p Mean queue length
1 Machine 1 versus Machine 2 0.9905 Both not significantly

different at 0.05

different at 0.05
different at 0.05
Now, we will show how the OTE metrics can be used for bottleneck detection.
Note that the KANBAN system has three machines in series. From the OTE metric
for a series subsystem shown in table 1, one can see that the numerator (and hence
the OTE value) Q is limited by the piece of equipment whose
OEEi Rthi nji1 Qeff j (or if it is the last piece of equipment then Qeff is
dropped) is minimum, which indicates the bottleneck. In our example, this term,
called bottleneck indicator, for equipment 1, 2, and 3 is 0.1561, 0.1260, and 0.1033,
respectively. Therefore, equipment 3 is the bottleneck.
The fact that equipment 3 is the bottleneck can also be shown through sensitivity
analysis. The system is simulated for 1 day with 40 replications for all cases in the
sensitivity analysis. The current system throughput is normally distributed with a
mean of 126 and a standard deviation of 29.048. We then double the capacity
of equipment 1 (by adding an identical piece of equipment in parallel) and obtained
129.75 and 27.609 as the system throughput mean and standard deviation,
respectively. If the capacity of equipment 2 is doubled, then the system
throughput mean and standard deviation are changed to 139.00 and 34.0509,
respectively. In both cases, no significant throughput improvements are observed
at 0.05. On the other hand, when the capacity of equipment 3 is doubled, the
system throughput increased to a mean of 247.38 with a standard deviation
of 75.387, which is significantly different from the original throughput at
0.05. Hence, the sensitivity analysis validates the bottleneck detection method
using OTE.
Likewise if a factory is a combination of more than one subsystem the OTE for a
series subsystem is used to arrive at the OFE and to find the bottleneck. Let us
consider the system in figure 3 for illustration.
The production system in figure 3 has nine machines (M19). The arrows show
the process flow. According to the subsystem definitions (specified in figure 2)
Parallel Subsystem
(M4, M5, M6) Assembly Subsystem
(M7, M8, M9)
M4
M1 M2 M3 M5 M7 M9
M6
Series Subsystem M8
(M1, M2, M3)
Figure 3. Illustration: overall factory effectiveness (OFE) computation and bottleneck

detection.
Table 9. Subsystem processing rate and quality efficiency.
Theoretical Theoretical
processing rate of the quality efficiency of
Subsystem subsystem (Rth) the subsystem (Qeff)
Series min fRthi g Y

n
i1,2,...,n Qeffi
i1
X
n Pn
Qeffi
Parallel Rthi i1
n
i1 Pn
k Q
Assembly min min fRthi =kAi g,Rtha Pi1 Ai effi
n QeffA
i1,2,...,n k
i1 AiP
Xn n
k Q
Expansion minfRthe kEi ,Rthi g QeffE i1 Pn Ei effi
i1 i1 kEi
machines M1, M2 and M3 form a series subsystem, machines M4, M5 and M6 form
a parallel subsystem, and machines M7, M8 and M9 (assembly station) form an
assembly subsystem. Let us call the three subsystems Subsystems1, 2 and 3,
respectively. To compute the OFE of this production system, OTE for each
of Subsystems1, 2 and 3 are computed from the appropriate OTE formula in table 1.
It should be noted that Subsystems1, 2 and 3 themselves are in series with respect
to each other. Hence, from table 1, OFE is computed from OTE formula for a
series subsystem by replacing OEE with the computed OTE values. Then the
numeratorQ value would be limited by the subsystem whose OTEi
Rthi nji1 Qeffj (or OTE(i) Rth(i) for the final subsystem in the series) value
is the least. This term as mentioned above is called the bottleneck indicator. The
subsystem with the least value of this bottleneck indicator is determined to be the
bottleneck subsystem. The bottleneck equipment in the bottleneck subsystem is
identified by using the corresponding subsystem bottleneck indicator from the OTE
formulae listed in table 1. Rth and Qeff for subsystems are computed as shown
in table 9.
5. Case study
To demonstrate the diagnostic capability of OTE in a real-world scenario, two case

studies are discussed in this section. The wafer fab case study discusses a factory
performing well with an OFE of 0.9353. The glass manufacturing case study shows a
factory performing with a low OFE of 0.4048. This case study also demonstrates how
OTE helps achieve a better performance by improving the current OFE.
5.1 Wafer fab case study

The simplified wafer fab model presented in (SEMI E124-0703 2003) is used as a case
study. The model has five machines in three tool sets namely diffusion, dry etch and
lithography (figure 4). There is one process flow (as indicated by arrows in figure 4)
with six steps and a single material-handling vehicle that transports 25 wafers at
a time. The process data and equipment data are shown in tables 10 and 11,
respectively. During the total time of observation, 985 500 wafers were processed
with 46 929 scrapped units. This yielded an overall quality efficiency rate of 0.9524.
The following subsystems are recognized in the wafer fab:
. Two pieces of diffusion equipment form a parallel subsystem.
. Two pieces of dry etch equipment form a parallel subsystem.
. Diffusion subsystem, dry etch subsystem, lithography equipment and
transport are in series.
A single part is processed multiple times (six times, to be exact) in the wafer fab.
Assuming the quality efficiency of each piece of equipment is the same. Since the
overall
p quality
efficiency is 0.9524, individual equipment quality efficiency is thus
6
0:9524 0:9916. A part processed the second time in the same equipment is treated
Diffusion
Dry Etch
Lithography
Figure 4. Case study: process flow of a wafer fab model (SEMI E124-0703 2003).
as a different part type. Based on the quality efficiency at each piece of equipment,
the product mix for each tool set can be computed as follows. Take the diffusion tool
set for an example. The number of wafers coming for the second time would be
(0.99194) times the original, since the wafers are processed four times previously
before coming again to the diffusion tool set. The proportion of wafers processed for
the first time and the second time are then 0.5081(1/10.99194) and 0.4919(0.99194/
(10.99194)), respectively. Similarly, the product mix at dry etch is 0.5040 first time
processing and 0.4959 second time processing; while the product mix at lithography
is 0.5061 first time processing and 0.4939 second time processing.
Assuming actual processing rate equals theoretical processing rate, the theoretical
OEEs of all pieces of equipment are calculated as shown in table 12. Now we are
ready to calculate the OTE metrics for the subsystems. Take the diffusion tool set
as an example. From table 10, we found that it takes 225 min to process a batch
of wafer the first time and 255 min the second time. Since the batch size is 75 (from
table 11), first time processing rate is 0.3333 wafers/min (75/225), second time
processing rate is 0.2941 wafers/min (75/255). From equation (7), we can calculate
the theoretical processing rate of a diffusion machine as [(0.5081 0.3333)
(0.4919 0.2941)] 0.3140 wafers/min. (Assuming both diffusion machines performs
equal number of first and second time processing.) According to the OTE metric for
parallel subsystems shown in table 1 and the theoretical OEE values for the two
diffusion machines shown in table 12, we can calculate the diffusion subsystem OTE
as [(0.9225 0.3140) (0.9621 0.3140)]/[0.3140 0.3140] 0.9423. Since the two
Table 10. Process data (SEMI E124-0703 2003).
Time to Theoretical
Time to travel to Cycle production
Process step Equipment process Time to the next time time/unit
number set name Time to load batch unload step (min) (min/wafer)
1 Diffusion 20 225 40 8 293 3

2 Dry etch 15 30 15 4 64 1.2
3 Lithography 10 2.2 10 4 26.2 2.2
4 Dry etch 15 50 15 8 88 2
5 Diffusion 20 255 40 4 319 3.4
6 Lithography 10 2.2 10 22.2 2.2
Sum 90 564.4 130 28 812.4
Table 11. Equipment data (SEMI E124-0703 2003).
Average Availability Average

operational efficiency availability
Equipment Number in Process Buffer size efficiency (each tool) efficiency
set name the set batch size (wafers) (%) (%) (%)
Diffusion 2 75 450 88 93 and 97 95

Dry etch 2 25 300 78 81 and 85 83
Lithography 1 1 300 91 96 96
Transport 1 25 0 69 62 62
Table 12. Theoretical overall equipment effectiveness (OEE) calculation.
Equipment Aeff Peff Qeff Theoretical OEE
Diffusion 1 0.93 1.0000 0.9919 0.9225

Diffusion 2 0.97 1.0000 0.9919 0.9621
Dry etch 1 0.81 1.0000 0.9919 0.8034
Dry etch 2 0.85 1.0000 0.9919 0.8431
Lithography 0.96 1.0000 0.9919 0.9522
Transport 0.62 1.0000 1.0000 0.6200
Table 13. Subsystem overall throughput effectiveness (OTE) calculation.
Subsystem OTE Subsystem processing rate Subsystem quality efficiency

Diffusion 0.9423 0.6280 0.9919

Dry etch 0.8233 1.3359 0.9919
Lithography 0.9507 0.4545 0.9919
Transport 0.6200 4.4643 1.0000
diffusion machines are in parallel (from table 9), the theoretical processing rate of
the subsystem is thus 0.3140 0.3140 0.6280 wafers/min and its quality efficiency is
(0.9919 0.9919)/2 0.9919. Table 13 shows the calculated OTE metrics for all
subsystems. Note that material-handling vehicle (transport) is treated as a piece of
processing equipment with a quality efficiency of 100%.
Since the three subsystems are in series, we are ready to calculate the OFE using
the OTE metric for series subsystems. Note that this time a subsystem is treated as a
virtual piece of equipment, whose OEE is the OTE of the subsystem. First, we
calculate the bottleneck indicator for each subsystem. Take the diffusion subsystem
for an example. The bottleneck indicator is 0.9423 0.6280 0.99194 0.5728.
Similarly for dry etch, lithography and transport, the bottleneck indicators are
1.0733, 0.4251 and 2.7679, respectively. The smallest bottleneck indicator is that of
lithography (0.4251), indicating that it is a bottleneck. From table 13, we find that
the smallest subsystem processing rate is also that of lithography (0.4545). Therefore,
OFE is 0.4251/0.4545 0.9353, indicating that the factory effectiveness is at 93.53%
of the ideal throughput.
5.2 Glass manufacturing case study

The second case study is a manufacturing line from a leading glass-manufacturing
company, Pilkington North America. Since in the previous sections, metric
computation and bottleneck detection is shown step by step, for brevity computation
is not shown in this case study. Rather, we would focus the discussion on how the
developed metrics can be used to improve the performance of a factory. A flowchart
of the production line is shown in figure 5. The process shown consists of 15
processes utilizing 15 different machines. Table 14 shows the theoretical OEE values
for all equipment in the factory.
Figure 5. Case study: process flow of a glass manufacturing factory.
The subsystems identified are as follows: Subsystem1 is a parallel subsystem

consisting Ha and Hb, Subsystem2 is a series subsystem with Mb, Db and
Tb, Subsystem3 is a series subsystem with Ma, Da and Ta, Subsystem4 is a parallel
subsystem combining the Subsystem2 and Subsystem3, Subsystem5 is the
complete manufacturing system; it contains a series of constituent subsystems and
individual equipment. They are Subsystem4, R, Subsystem1, IVW, ATT, GC, I1, I2,
and WT.
The next step is to compute the metrics. The OFE of the manufacturing system
was computed to be 0.4048 and the metric showed that Inspection1 was the
bottleneck of the manufacturing system. The low OFE indicates that there are
significant rooms to improve the factory performance. Now let us see how we can
improve the OFE using OTE. The OTE metrics precisely helps factory professionals
address this question by indicating which equipment is the bottleneck and what is to
Table 14. Equipment theoretical overall equipment

effectiveness (OEE).
Resource Theoretical OEE
Molder-a (Ma) 0.3523

Deflash-a (Da) 0.3959
Trim-a (Ta) 0.4095
Molder-b (Mb) 0.3257
Deflash-b (Db) 0.3959
Trim-b (Tb) 0.4102
Router (R) 0.4010
Hseal-a (Ha) 0.4817
Hseal-b (Hb) 0.4817
Spreader (IVW) 0.3644
Anti-theft (ATT) 0.1618
Gap check (GC) 0.4208
Inspection 1 (I1) 0.4048

Inspection 2 (I2) 0.4149
Water test (WT) 0.4155
be done to increase the OFE. Three scenarios result in increased theoretical OEE of
the bottleneck equipment and hence OFE of the manufacturing system:
. Decreasing the actual processing time of the bottleneck equipment (should
aim to eliminate minor stoppages and speed losses).
. Decreasing the failure time (decreasing plant shutdown, decreasing scheduled
downtime, decreasing failure time, decreasing set-up and adjustment time,
i.e. downtime losses).
. Increasing good product production at the bottleneck equipment (decreasing
scrap, i.e. defect losses).
The bottleneck equipment is Inspection1. Let us observe what happens if the
bottleneck equipments actual processing time is made three-quarters of its current
processing time. Decreasing the actual processing time at Inspection1 (bottleneck
equipment) resulted in an increase of OFE to 0.4261. The new bottlenecks of the
system are Molder-a and Molder-b. Now to improve the OFE further if the actual
processing time of Molder-a and Molder-b are decreased by three-fourths, OFE
increased to 0.4767. Computations showed that Inspection2 is the bottleneck now.
Now finally if we reduce the actual processing time of Inspection2 to three-fourths
of its current time, OFE increased to 0.5372. Hence, OTE, apart from measuring
performance at the factory level also indicates the bottleneck equipment. Using OTE,
factory professionals can quantitatively find out areas that constrain the factory
productivity.
6. Conclusion and future work
This paper presents the developed OTE metrics for factory-level performance
monitoring and diagnostics. The concept behind OTE development and the OTE
validation methodology is explained. By using examples, the OFE computation and
bottleneck detection methodology is illustrated. A sensitivity analysis is performed to

validate the bottleneck detection methodology using OTE. Finally, two case studies
illustrate the practical applications of OTE.
There are several potential future research avenues in this area. It includes the
following. (1) Developing a methodology using OTE to perform what-if scenario
analysis to facilitate new factory design. (2) Automating entire factory performance
analysis and diagnostics process using OTE by implementing it into a software tool.
This software tool could be used to drive continuous productivity improvement
initiatives quantitatively. And (3) development of diagnostic cycle time effectiveness
metrics.
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This article was downloaded by: [Dicle University]

On: 12 November 2014, At: 11:14

International Journal of Production

Overall throughput effectiveness (OTE)

To link to this article: http://dx.doi.org/10.1080/00207540600786731

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Overall throughput effectiveness (OTE) metric for factory-level

K. M. N. MUTHIAH* and S. H. HUANG

Department of Mechanical, Industrial and Nuclear Engineering, Intelligent Systems Laboratory,

(Revision received March 2006)

Seiichi Nakajima provided overall equipment effectiveness (OEE) to measure

Keywords: Productivity; Overall equipment effectiveness; Overall throughput

Overall equipment effectiveness (OEE) was recognized as a fundamental method for

*Corresponding author. Email: sam.huang@uc.edu

International Journal of Production Research

Conventional or unit-based OEE measures the equipments productivity relative to

OEE Aeff Peff Qeff , 1

3. Overall throughput effectiveness (OTE)

3.1 Theoretical OEE

3.2 OTE development

Total time (Tt)

Actual processing time (Tact)

Actual product units processed (Pa )

Scrap Good product output (Pg)

Theoretical OEE = Aeff*Peff*Qeff

Figure 1. Theoretical overall equipment effectiveness (OEE).

equipment i, Qeff(i) denotes quality efficiency of equipment i, kA(i) denotes number of

Figure 2. Four unique subsystems.

Table 1. Overall throughput effectiveness (OTE) metrics.

Therefore, we only need to address the issue of a piece of equipment processing

Assuming the availability of equipment i, Aeff(i), remains the same irrespective

3.3 OTE validation

H0: OTE simulation OTE

Table 2. Overall throughput effectiveness (OTE) validation series subsystem.

1 Low, low, low 0.4190 0.4155 0.04009 0.0841

Table 3. Overall throughput effectiveness (OTE) validation parallel subsystem.

1 Low, low, low 0.4227 0.4224 0.00839 0.55018

Table 4. Overall throughput effectiveness (OTE) validation assembly subsystem.

1 Low, low, low 0.3971 0.3985 0.02138 0.203624

OTE metrics are a function of the individual equipment productivity (theoretical

Table 5. Overall throughput effectiveness (OTE) validation expansion subsystem.

1 Low, low, low 0.4169 0.4160 0.00986 0.080342

Table 6. KANBAN system data.

Equipment 1 Equipment 2 Equipment 3

semiconductor manufacturing. This section highlights the bottleneck detection

Table 7. KANBAN system queue statistics.

Queue equipment Average length Standard deviation

Table 8. Statistical test on queue length.

1 Machine 1 versus Machine 2 0.9905 Both not significantly

2 Machine 1 versus Machine 3 0.8960 Both not significantly

Figure 3. Illustration: overall factory effectiveness (OFE) computation and bottleneck

Table 9. Subsystem processing rate and quality efficiency.

Series min fRthi g Y

To demonstrate the diagnostic capability of OTE in a real-world scenario, two case

5.1 Wafer fab case study

Table 10. Process data (SEMI E124-0703 2003).

1 Diffusion 20 225 40 8 293 3

Table 11. Equipment data (SEMI E124-0703 2003).

Average Availability Average

Diffusion 2 75 450 88 93 and 97 95

Table 12. Theoretical overall equipment effectiveness (OEE) calculation.

Equipment Aeff Peff Qeff Theoretical OEE

Diffusion 1 0.93 1.0000 0.9919 0.9225

Theoretical OEE = AeffPeffQeff