A study on applying FMEA to improving ERP introduction : An example of semiconductor related industries in Taiwan

Purpose – Facing the competition pressure of internationalization and diversification, the semiconductor industry of Taiwan has to increase the activation/utilization rate of machines, enhance flow speed and values, cut down delivery and reduce costs in an efficient way in reaction to a shortening product life cycle and the global market requirements. As a result, introduction of ERP has become a critical factor of enhancing competitiveness. The purpose of this study is establish a systematic evaluation and improvement mechanism to locate the risk priority number (RPN) of implementation items via failure mode and effects analysis (FMEA) for semiconductor related industries in Taiwan while introducing ERP. Design/methodology/approach – A standardized system introduced performance matrix based on the performance evaluation matrix (PEM) will be established in accordance with the locations of severity (S), occurrence (O) and detection (D) and the three RPN indices, in the PEM. Performance levels will be assessed and the performance improvement strategy introduced by the system will be formulated. Finally, items falling within the non‐appropriate performance zone will be specified through the quality function development (QFD) method. Findings – From the results of the case study, the proposed systematic evaluation and improvement on the performance of introducing ERP for the semiconductor industry in Taiwan can be conducted in an efficient way. Practical implications – All that the management needs to do is to correspond to the positions of these RPN indices of implementation items on the performance matrix. Performance levels will be assessed and the performance improvement strategy introduced by the system will be formulated. Originality/value – The PEM is demonstrated to be suitable to define the best countermeasure can be sought to serve as a reference for the semiconductor related industries in Taiwan to introduce ERP.