Japanese and U.S. Semiconductor Firms
Bridging the Knowing-Doing Gap on the Shopfloor
Benjamin A. Campbell
Doshisha Business Cases 07-05
October 2007

Japanese and U.S. Semiconductor Firms
Bridging the Knowing-Doing Gap on the Shopfloor
Benjamin A. Campbell
Center for Work, Technology, and Society, IIR
University of California, Berkeley
This case study was originally prepared for MOT classes, funded by the Japanese Ministry for
Science and Education in 2004 with the support of the Alfred Sloan Foundation (U.S.) and
METI (Japan). The author would like to thank Neil Berglund, Melissa Appleyard, and Dan
Rascher for very helpful comments on earlier drafts. Copyright © 2007 by Benjamin A.
Campbell. No part of this publication may be reproduced, stored in a retrieval system, ortransmitted in any form or by any means – electronic, mechanical, photocopying, recording, orotherwise – without permission from the author or Doshisha Business School.

Abstract
This case on problem-solving in the semiconductor industry focuses on bridging
the knowing-doing gap on the shopfloor. We present a variety of examples of problem
solving structures and organizations in semiconductor firms in Japan and the U.S. We
find that while there are large differences in each firm's specific organization andproblem-solving structures, Japanese firms tend to demonstrate a firm-wide problemsolving philosophy where putting knowledge into practice starts at the top andcooperative problem solving is encouraged. The structures at U.S. firms are consistent
with a learning-by-doing model where failure is not penalized and immediate action isvalued over extensive planning.
Introduction
This study focuses on bridging the knowing-doing gap through problem-solving on
the shopfloor in the semiconductor industry, where the continual solving of problems iscritical for improving quality and lowering costs. To analyze the knowing doing gap, we
examine Pfeffer and Sutton's Eight Guidelines for Putting Knowledge into Practice 1 andhow these guidelines are implemented in the semiconductor industry.

1

The guidelines are adapted from Pfeffer and Sutton,” Knowing ‘What’ to Do Is Not Enough”

California Management Review Fall 1999.

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Japanese and U.S. Semiconductor Firms
Bridging the Knowing-Doing Gap on the Shopfloor
Benjamin A. Campbell

We first describe the eight guidelines for putting knowledge into practice and thenwe look at how these guidelines are implemented in real world problem solving
situations. We find that in the companies we have studied there is much variation in
specific problem solving systems, but on the whole, the structures of the Japanese firm
demonstrate a strong firm-wide problem-solving philosophy where putting knowledge
into practice starts at the top and cooperative problem solving is encouraged, and thestructures of the U.S. firm are consistent with a learning-by-doing model where failure
is not penalized and action is valued over planning. These results come from studying asmall sample of firms in each country and may not be generalizable to the industry as awhole, or to the economy as a whole.
Companies that successfully put knowledge into action have total organizational
commitment to that goal. Companies must reward action at all levels of theorganization and create systems that support action. The optimal systems for putting
knowledge into practice should have the following characteristics:
Eight Guidelines for Putting Knowledge into Practice
1. Doing reinforces knowledge.
 Systems that require workers to learn by doing will force workers to
associate their new knowledge with action and as a result, the knowledge
will no longer be separated from action.
2. Doing anything is more important than creating an elegant plan (“Ready, Fire,Aim”).
 All actions should be consistent with achieving a goal or solving aproblem.
 “Ready, Fire, Aim” means describe the problem to solve, act on apotential idea to solve the problem, assess the outcome of the actions andprepare for the next potential solution.
3. Don’t penalize failure.
 Workers will be unwilling to take risks and disrupt the status quo if they
will be penalized for failure.
4. Minimize fear in the corporate culture.
 Workers need to feel secure in their jobs to accept the personal risks ofputting knowledge into practice and disrupting the company status quo.
5. Cooperate within the organization.

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Japanese and U.S. Semiconductor Firms
Bridging the Knowing-Doing Gap on the Shopfloor
Benjamin A. Campbell



Cooperation within the firm encourages innovation and efficient use ofresources.

6. Measure what is important.
 It is important to keep goals clear and concise. One way to ensure this is
to limit the number of items that are measured.
7. Corporate philosophy is important.
 The systems where workers are encouraged to put knowledge into
practice need to fit into a supportive corporate philosophy.
 Although business environments are highly flexible and thus strategies
and systems need to remain flexible, an underlying corporate philosophy
should be resistant to change.
8. Putting knowledge into practice starts at the top
 Putting knowledge into practice requires full organization commitment
from the top leadership downward.

In the next section we present a variety of problem-solving examples from thesemiconductor industry. For each example we analyze how the eight guidelines for
putting knowledge into practice are implemented.

Examples of Problem Solving
The previous section has examined the corporate structures necessary to put
knowledge into practice. Here we present a set of short examples of advanced problem
solving from Japan and the U.S. that illustrate how a variety of firms use thesestructures effectively.
Examples from Japan:
Example 1:
An engineer in the etch division of a Japanese fab identified a sudden increase in
the number of defects occurring during a specific processing step. When he runs into a
problem that may be similar to problems at other fabs in the company, it is standard
operating procedure to contact the engineers at corporate headquarters to notify them of
the issue and discuss potential solutions.

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Japanese and U.S. Semiconductor Firms
Bridging the Knowing-Doing Gap on the Shopfloor
Benjamin A. Campbell

In his experience, about half of all problems that he reports to headquarters havebeen solved before or can be solved easily by the experts there. For the other half, heworks with headquarters to identify what data to collect and what steps to take.
Additionally, he meets with the engineers at headquarters to learn about the problems atother fabs as well as advancements in technology.
In addition to gaining knowledge from his colleagues at other plants in thecompany as distributed through the corporate headquarters, he also collects information
on how to solve problems through academic journals. He is not allowed to collectinformation form engineers at other firms. His only channel to access knowledge ofother firms is through academic and trade journals.
After discussion with the engineers in the corporate office, he and a development
engineer assigned to work with him on the project developed a plan to collect data on
the problem. They increased data collection at every phase of the process to identify
exactly where the problem occurs in the process and exactly which lots of wafers wereaffected. They quickly identified a leak in a gas line that was causing the defectproblems. They fixed the leak and modified procedures to minimize the risk of the leakrecurring. Upon completion of the process they communicated their steps and solution
to the engineers at corporate headquarters.
Analysis:
In this example, the Japanese firm implements many of the basic tenets forbridging the knowing-doing gap. Specifically, the company provides a great example ofthe value of the following guidelines: "Doing reinforces knowledge", "Cooperate within
the organization", "Measure what is important", "Corporate philosophy is important","Putting knowledge into practice starts at the top".
The corporate problem-solving philosophy of this firm is designed to promote
cooperation within the organization and to involve engineers at the top of the company.
The integration of engineers at corporate headquarters into the problem-solving process
indicates that putting knowledge into practice is important at the top of the organization.
This system also maximizes knowledge within the organization by providing
formal structures to transmit knowledge throughout the firm. For example, the engineer
in the study notes that about half of the problems he discusses with corporate
headquarters are problems that have been solved before at other fabs or can easily besolved by the experts at headquarters. At most other firms, there is not a formal channel
to distribute knowledge between fabs, and identical problems are solved from scratch
multiple times. Starting from scratch greatly increases the time necessary to bridge theknowing-doing gap, so having a formal channel in place to distribute solutions toproblems is a great competitive advantage. Once the knowledge is distributed from

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Japanese and U.S. Semiconductor Firms
Bridging the Knowing-Doing Gap on the Shopfloor
Benjamin A. Campbell

headquarters and the engineers on the shopfloor implement the knowledge, learning isreinforced and the engineers are unlikely to need support from headquarters the nexttime they face a similar problem.
Not only is there cooperation with engineers at corporate headquarters, there is also
cooperation between different types of engineers on the shopfloor. The involvement ofdifferent types of engineers allows the team to identify the most important data tocollect and then to analyze the data using a variety of different skill sets.
Example 2:
At another Japanese fab, an engineer in the Deposition area was told by his
supervisor that the "up-time" (the time that a machine is functioning properly) on one of
his tools was inadequate. He was aware that this was an on-going problem, but was
now worried about disappointing his supervisors and colleagues. The machine was new
to the fab and it was one of their first tools on a whole new geometry process. With thenew process, there were many bugs to work out and few people in the firm withexperience solving these new problems.
In order to increase up-time, the engineer first called a meeting of selectedengineers, operators, and technicians in the area. They were each assigned to explore
different facets of the tool in which they were experts, to identify potential problems
and ways to increase up-time.
In addition, they contacted the equipment vendor for additional support. The
vendor discussed a variety of new issues to be concerned with when working with thenew process and helped the different team members design methods to study thefunctioning of the machine.
This is an on-going project and the team is continuing to work very closely withthe vendor to learn as much about the new machine as possible.
Analysis:
As in the prior example, this fab demonstrates a great degree of cooperation within
the organization and provides an example of how corporate philosophy is important.
Additionally, the team of problem-solvers on the shopfloor focused on measuring what
was important.
The corporate problem-solving philosophy in this firm is marked by assigningcross-functional and cross-occupational teams to work on problems. Each teammember is encouraged to focus on the aspects of the problem in which they haveexpertise. The team then cooperates together to synthesize the ideas and knowledge ofDoshisha Business Case 07-05

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Japanese and U.S. Semiconductor Firms
Bridging the Knowing-Doing Gap on the Shopfloor
Benjamin A. Campbell

the diverse set of experts. The team is also encouraged to cooperate with vendors inorder to bring outside knowledge in to the group.
Each team member collected the data they thought was most important. Thisapproach has trade-offs. To avoid "paralysis by analysis" where access to too muchdata slows the problem-solving process, it is often important to limit the amount of datacollected. In this example, each team member collected a manageable amount of data,
but collectively, they may have an overwhelming amount of data to analyze.
A weakness in the problem-solving structures at this firm is the presence of fear in
the problem solving process. The primary engineer in the example was told by his
supervisor that the performance of his machine (which directly reflects his performance)
was unacceptable. This created a stressful, fearful environment for the engineer.
Although this engineer responded well to the stress, this is not always the case.

Examples from the U.S.:
Example 1:
At a U.S. fab, a development engineer in the Deposition area noticed a problem
with a delivery system for liquid chemicals. The system was very far out of spec which
led to frequent fluid change procedures. The fluid change procedure is expensive andtime consuming. Because the fab only had two tools at this processing step, having thesystem down was a major bottleneck in the fab.
One of the difficulties in addressing this problem is that the delivery system was
new to the fab, thus there was not an existing body of knowledge on the tool, and theengineer did not know whether the tool itself was faulty or their implementation of thetool was faulty.
The engineer hypothesized that the cause of the problem was that a key pump was
malfunctioning. His first instinct was to solve the problem through trial and error;
however, the material costs necessary for running trials are very high making trial anderror prohibitively expensive. Instead, he developed a plan to systematic test thefunctions of the system without using expensive materials. After exploring all of thepossibilities, he was still unsuccessful in eliminating the problem.
At this point, he called the equipment vendor and asked for support. The
equipment vendor pointed out that the problem could be a result of the tool, acontaminated batch of chemicals, the procedure, or the computer hardware running thesystem. Additionally, if contaminated chemicals entered the system, the entire system
could be ruined.

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Japanese and U.S. Semiconductor Firms
Bridging the Knowing-Doing Gap on the Shopfloor
Benjamin A. Campbell

The equipment engineer convened a team meeting including the equipment vendor,
the materials vendor, in-house equipment engineers and in-house process engineers.
Working as a team, they solved the problem in two weeks. The team met every day forthe first week and then every other day for the second week. Once they identified thatthe problem was related to faulty hardware, they updated the hardware and put in asystem in which future hardware testing and upgrading would be easier to perform.
The engineer's performance was evaluated on the time it took to solve the problem.
If over the course of the year he meets minimum speed requirements on all of his
problems, he will receive a bonus equal to a sliding percentage of his salary. The
percentage of his salary is determined by his individual overall performance.
Analysis:
In this example, the U.S. engineer demonstrates a problem-solving system that is
consistent with the knowing-doing gap guidelines of: "Doing reinforces knowledge","Doing anything is more important than creating an elegant plan (“Ready, Fire, Aim”)","Don't penalize failure", "Cooperate within the organization", and "Measure what is
important".
The engineer's first instinct was to jump right into the problem and start a trial anderror process to identify potential causes and potential solutions to the problem. Hisinstincts reflect the guideline of "Ready, Fire, Aim!". This is often a very effective
process because problem-solvers may not solve the problem on their first try, but theylearn more about the problem and they learn why their first attempt at a solution failed.
This additional knowledge can then be used to develop the next trial where the next trial
comes closer to solving the problem. This is an iterative process that should lead the
problem-solver to a solution and allow the problem solver to learn throughout theprocess.
However in this specific case, the engineer realized that trial and error would beprohibitively expensive. Instead of the "Ready, Aim, Fire!" approach, the engineer
focused on a strategy of measuring what is important and cooperating within theorganization to develop a cost effective plan for approaching the problem.
In this example, there is mixed evidence of the level of cooperation within theorganization. Obviously cooperation is an important part of the process because across-functional team was convened to study the problem; however, rewards associatedwith performance at the fab are awarded based on individual performance. This may
create competition between team members and undermine a collaborative problemsolving process as team members try to advance their own careers.
The problem-solving structures of this firm do not directly penalize failure and as aresult minimize fear in the organization. The firm rewards success and does not

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7Japanese and U.S. Semiconductor Firms
Bridging the Knowing-Doing Gap on the Shopfloor
Benjamin A. Campbell

penalize those who try to solve a problem, but fail. The compensation for individuals is
structured so that individuals receive a base level of compensation and then bonuses areawarded for high performance, with higher performance rewarded with greater bonuses.
The down-side risk to an engineer is limited, but the upside can be great.
Example 2:
An equipment engineer working in the Polishing division of another U.S. fabdiscovered a problem where a piece of equipment was occasionally breaking wafers.
The wafer breakage was rare, but each wafer is very valuable so the breakage had to beeliminated. Making the problem difficult to study was the fact that the breakage
occurred in a seemingly random fashion. In other words, the breakage occurred very
rarely and at unpredictable times, thus it was very difficult to collect data on the
problem.
The engineer's first step in solving the problem was to recreate the problem. He
spent a great deal of time running blank wafers through the machine at different settingsto try to recreate the breakage. He was unsuccessful using this trial and error style
approach.
His next step was to create a data recording system for the operators running themachine. He created a form on which the operators would detail all of the machinesettings and other relevant information whenever a breakage occurred.
When he had collected a sufficient volume of data he asked his manager to create ateam to help solve the problem. The manager appointed process engineers, equipment
engineers, operators, and technicians to the team, but the original engineer still has total
ownership of the project. He was the leader and had final responsibility in finding asolution.
The team met twice a week during shift changes in order to include participants on
both shifts. At each meeting, they brainstormed a variety of potential causes to the
problem. After coming up with ideas, they would develop methods to test their
hypotheses and then perform these tests.
After several weeks, they discovered that the wafer handling procedure was not
sufficiently well-defined and that the breakage problem was attributable to how wafers
were loaded into the tool. They rewrote the wafer handling specs and trained theoperators in the new methods. The team was so successful on this project that the
manager has encouraged them to continue meeting to explore other materials loss
problems in the fab. Team members received a bonus based on their individual role in
the project and the total costs the team saved the company.

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Japanese and U.S. Semiconductor Firms
Bridging the Knowing-Doing Gap on the Shopfloor
Benjamin A. Campbell

Analysis:
This U.S. firm demonstrates very similar problem-solving structures as the other
U.S. firm. The example demonstrated the following guidelines in bridging theknowing-doing gap: "Doing reinforces knowledge", "Doing anything is more important
than creating an elegant plan (“Ready, Fire, Aim”), "Cooperate within theorganization", "Measure what is important", and "Corporate philosophy is important".
As in the prior example, the engineer's first instinct was to immediately initiate atrial and error process. In this case, the engineer used the "Ready, Fire, Aim" approach
to try to recreate the problem. The thought process of the engineer is that by learning
how to create the problem, one can learn how to prevent the problem.
Attempting to recreate the problem is consistent with the guideline that "Doing
reinforces knowledge". The engineer was learning about the problem by doing what
was necessary to create the problem. In the process of doing, the engineer reinforced
his knowledge of the tool, of potential problems, and of potential solutions. Ultimately,
this approach was not directly successful, but this does not minimize the extent of theknowledge gained and reinforced through the trial and error process.
The engineer's next step was to measure the factors that are important. The
engineer instituted a new measuring and documentation process that was specificallydesigned to collect information that would help solve the problem.
In this firm, the mixed message of cooperation at U.S. firms is even more evident
than in the other U.S. example. The engineer's supervisor promoted cooperation by
assigning a team to assist the engineer but the supervisor made it very clear that theengineer was in charge of the team and was responsible for the performance of the team.
Additionally, performance bonuses are assigned based solely on individual
performance. These structures create a situation where there is great incentive forindividuals to compete and not share the credit of team projects.
Conclusion
While we find that there is much variation in specific problem solving systems in
the companies that we have studied, the structures of Japanese firms tend to demonstrate
a strong firm-wide problem-solving philosophy where putting knowledge into practicestarts at the top and cooperative problem solving is encouraged, and the structures of
U.S. firms are consistent with a learning-by-doing model where failure is not penalized
and action is valued over planning.

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9Japanese and U.S. Semiconductor Firms
Bridging the Knowing-Doing Gap on the Shopfloor
Benjamin A. Campbell

Strengths of Problem-Solving Systems at Japanese Semiconductor Firms:


Cooperation within the organization:
Both firms mentioned inthis study implement a strong team-oriented approach to problem
solving. Teams are the basic unit of problem solving. Teams are
typically cross-functional which allow complex problems to beapproached from a variety of different angles and allow the team tounderstand the ramifications of any process or equipment alteration onother processing steps.

Data Collection: The initial step when presented with a problem is tocollect data on the problem. This is very important for understanding the
problem, prioritizing potential solutions and measuring the effectivenessof solutions. However, it is important to focus on measuring what is
important. Some firms in the industry may collect too much data whichslows down the process of putting knowledge into action.

Prevalent and strong corporate philosophy: Both Japanese firms
mentioned in this study have a strong corporate culture that outlines the
structure of problem solving. This corporate philosophy may manifest
itself in formal channels for cooperation, or team building, and it may
also manifest itself in how workers cooperate and are rewarded forcooperation.

Innovation and problem-solving starts at the top: Engineers at
corporate headquarters are often involved in the problem solving process.
This allows the best engineers at the company to interact with many
young fab-level engineers and it also allows for an efficient use ofknowledge within the firm as few problems are necessarily solved fromscratch. Involvement of senior engineers at headquarters allows thecorporate philosophy on problem solving to be reinforced through out
the organization.

Strengths of Problem-Solving Systems at U.S. Semiconductor Firms:


Learning by doing: In both examples, the problem-solver's first instinct
in bridging the knowing-doing gap is a trial and error style approach. By
definition trial and error implies trial of some activity. This may notdirectly solve the problem, but it reinforces knowledge of the problem
and of potential solutions. Trial and error is a powerful iterative processthat reinforces learning and bridges the knowing-doing gap.

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10Japanese and U.S. Semiconductor Firms
Bridging the Knowing-Doing Gap on the Shopfloor
Benjamin A. Campbell



Ready, Fire, Aim!: Consistent with the trial and error process, U.S.
engineers are likely to start implementing actions before they formulate
an elegant plan. The "Ready, Fire, Aim" approach insures that actions
will be undertaken and that problem solvers avoid the "paralysis byanalysis" trap where so much effort is put into developing a plan that
actions are put off indefinitely. The "Ready, Fire, Aim" approach canoften be costly, but it is very effective at transforming knowledge into
action and leads to acquisition of new knowledge.

Failure is not penalized: The U.S. firms both have compensation
systems and performance evaluation systems where success is rewarded,
but failure is not directly penalized. They typical incentive system at aU.S. firm includes a base salary which is paid independent of
performance (although consistently poor performers will have theiremployment terminated), and then a sliding scale of bonuses wherebonuses are directly related to individual performance.
Thiscompensation format removes the risk of occasional failure and provides
an incentive for individuals to attempt to solve high-value, high risk
projects.

Fear is minimized: Because occasional failure is not penalized, there isvery little fear of failure in these U.S. organizations. Engineers areencouraged to try to new projects and are encouraged to develop creative
solutions to problems. If the engineer's solution is occasionallyunsuccessful, there is very little fear of reduced compensation,
termination, or loss of colleagues' respect.

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