Cost reduction in a manufacturing fabricator: from the bottom up

In today´s highly competitive business environment, manufacturers must decrease costs and maximize tool usage to maintain a competitive edge. IBM´s semiconductor manufacturing facility in Essex Junction, Vermont, is no exception to the rule. In the early 1990s, this facility took a hard look at all of the factors that contributed to the cost of its products. Major sources of spending in a device fabricator like IBM´s are those expenses incurred in maintaining machines and equipment-in particular, spare parts for repair and the routine maintenance of equipment. The increased awareness of costs associated with maintaining manufacturing equipment has also brought a renewed focus to spare parts. Although these costs can be enormous, then are also significant opportunities for savings. Unfortunately, discovering these savings can be a difficult and time-consuming task, if people looking for the savings do not have a through understanding of how individual tools function. On the other hand, if the real costs of equipment maintenance are not known, it is difficult to determine where and how to realize savings. This paper describes how manufacturing personnel learned to use IBM´s financial reporting systems to find these savings and reduce the use of spare parts.