The present disclosure provides a method. The method includes patterning a substrate by a patterning tool; collecting a plurality of overlay errors from a plurality of fields on the substrate; identifying noise from the plurality of overlay errors by applying a first filtering operation and a second filtering operation that is different from the first filtering operation. The method further includes grouping the plurality of overlay errors that are not identified as noise into a set of filtered overlay errors; calculating an overlay compensation based on the set of filtered overlay errors; and performing a compensation process to the patterning tool according to the overlay compensation.