©1987-2000 Arthur M. Schneiderman All Rights Reserved. Slide 1 2/13/90-PREZ-1 rev. 5/7/91 ANALOG...

©1987-2000 Arthur M. Schneiderman All Rights Reserved.

Slide 1 2/13/90-PREZ-1rev. 5/7/91

ANALOG DEVICES AT A GLANCE

Headquartered in Norwood Massachusetts

Publicly Held (NYSE Symbol ADI)

$485 Million in Sales (FY1990)

48% of Sales Outside United States

5600 Employees Worldwide


Slide 2 5/8/91-PREZ-1a

ANALOG DEVICES AT A GLANCE

Products: ICs, assembled products, subsystems

Applications: precision measurement & control

Markets: data acquisition

Integrated supplier

(cont.)

50% industrial/instrumentation25% military/avionics13% computer12% other

designmanufacturing (8 locations)direct sales (100 locations)distribution


Slide 3 9/12/91-09121-1.doc

Period Accomplishments

Key Weaknesses Corrective Action

1984-1986 CEO awareness of TQM

TQM organizationTQM goal setting process

established Corporate TQM staff

1987-1990 established goals/metricsQIP teams10x improvement“it’s real”

top management involvementfocus on managementnot everyone involvedincomplete TQM infrastructure training slow progress -> plateau

seek outside help expert: Professor Shoji Shiba networking: CQM

1991-1992 business restructuringfinancial focusTQM planning

TQM activity on “back burner”

revitalize TQMimplement TQM infrastructure

1992-1994 Creating the New Analog >10x improvement

? ?

today Better understanding of the challenge

• TQM skills of senior managers• Alignment of TQM with business goals• Low quality of management systems• Total participation

• CQM course(s)

• Rigorous Hoshin deployment

• Baldrige self-assessment, benchmarking, process redesign• TQM diffusion

TQM at ANALOG DEVICES


Slide 4 3/24/91-03241-1

DIAGNOSIS

5

TQM INFRASTRUCTURE

TQMACTIVITY

OUTPUT

GOAL

SETTING

ORGANIZATION

SETTING

1

TRAINING &

EDUCATION

2

PROMOTION

3

PUSH PULL

MONITORING

6

INCENTIVES

REWARDS

7

DIFFUSION

4

ORIENTATION EMPOWERMENT SYNCHRONIZATION

7 REQUIRED COMPONENTS


Slide 5 9/12/91-09121-1

ADI CONTINUOUS IMPROVEMENT HISTORY

1986 1987 1988 1989 1990 1991 1992 1993 19940.01

0.03

0.1

0.3

1

3

10

30

100

year

defect level

12 month halflife

6 month halflife


Slide 6 10/28/86-QIP-7rev: 4/22/91-04080-2a

METRICS

IS

culture scorecard

projects

GOALS

SOLVINGPROBLEM ADI QIP GOALS

MARKET LEADERSHIP (RMS)

REVENUE GROWTH

PROFITABILITY

BE RATED #1 BY OUR CUSTOMERS

TOTAL VALUE DELIVERED

BUSINESS

OBJECTIVES:

DRIVERS:

IN

TIME TO M

ARKET

PROCESS PPM

MANUFACTURING CYCLE TIM

E

YIELDEXTERNAL LEVERS:INTERNAL L

EVERS:

PRODUCTS

DEFECT LEVELS

ON-TIME DELIVERY

LEADTIME

PRICE

RESPONSIVENESS

GENERALIZED CYCLE

TIME


Slide 7 10/29/91-10291-1rev 10/31/91

GETTING TO THE BENCHMARK

defe

ct

level

time

1

.1

.01

.003

.3

.03

today

us

best in class


Slide 8

Source: Kenzo Sasaoka, PresidentYokagowa-Hewlett-Packard 7/84

Process Quality Improvement (Dip Soldering Process)

Counter Action I

Counter Action IIICounter Action II

%

ppm

0.4%0.4

0.2

0.1

0.3

0

Failure R

ate

11 1 4 7 10 1 4 7 10

Masking MethodImprovement

Omit Hand ReworkProcess

40ppm

Dip Solder wasmade to oneworker job

Basic WorkingGuide Manual

Revision of ManufacturingEngineering Standards

PC Board DesignInstructions 3ppm

78 79 80 81 82 FY

10 1 4 7 10 1 4 7 10 1 4 7 10 month

40

20

10

0

30


Slide 9 12/12/85-ZD4

YOKOGOWA HEWLETT PACKARD

60483624120

Failu

re R

ate

%

1

.1

.01

.001

.0001

months

10,000

1,000

100

10

1

PPM

50 % improvement each:3.6 months

Dip Soldering Defects


Slide 10 3/11/87-IMPDATA1

OBSERVED HALF-LIVESHALF-LIFE IMPROVEMENT

DESCRIPTION (months) CYCLES R2

operations sheet errors 0.6 4.2 0.834days late in delivery 0.8 7.6 0.774rejects due to bends and dents 1.3 1.7 0.590process sheet errors 1.4 2.1 0.535PCB photo imaging resist flake 1.9 3.3 0.748errors in purchase orders 2.3 1.5 0.531aluminum smears from IC test pads 2.4 5.1 0.717yield loss, die coat inspection 2.4 2.3 0.733scrap costs, die coat inspection 2.4 2.0 0.754defective stockings 2.7 2.2 0.843yield loss, PCB photo imaging 2.9 2.3 0.843typing errors in bank telegram dept. 2.9 2.0 0.754late orders to customers 3.0 2.7 0.838defects in PCB edge polishing 3.3 1.9 0.188insertion defect rate 3.3 3.4 0.738failure rate, dip soldering process 3.7 8.6 0.980down time of facilities 4.5 1.3 0.562COPQ, goggles manufacturer 4.7 1.9 0.942scrap and repair costs 5.0 1.6 0.918scrap and repair costs 5.0 0.8 0.746in-process defect rate 5.3 1.1 0.550late spare parts to customers 5.3 1.1 0.471defects due to pits, piston rings 5.5 3.5 0.968defects in vacuum molding 5.6 4.6 0.882vender defect level, capacitors 5.7 6.3 0.812

---------------------------------------------------------------------------------------------------------customer returns due to admin. error 6.3 3.8 0.941

WIP 6.3 1.1 0.979accounting miscodes 6.4 2.5 0.709manufacturing scrap 7.0 3.9 0.530vender defect level, transformers 7.2 5.0 0.842vender defect level, IC linears 7.4 4.9 0.906

WIP 7.5 2.1 0.759failure rate, line assembly 7.5 3.2 0.886manufacturing cycle time 7.6 2.7 0.741defects per unit 7.6 4.6 0.948


Slide 11 3/11/87-IMPDATA2

OBSERVED HALF-LIVES(cont.)

HALF-LIFE IMPROVEMENT

DESCRIPTION (months) CYCLES R2

rework rate 8.0 1.4 0.801off-spec rejects 8.8 5.1 0.513set up time 9.5 0.6 0.690

vender defect level, transistors 9.6 3.7 0.997defect levels, customers incoming QC 10.1 7.1 0.989defects 10.4 5.2 0.965

software documentation errors 10.5 1.2 0.173---------------------------------------------------------------------------------------------------------error rate, perpetual inventory 12.1 3.0 0.862customer returns due to product 12.4 2.9 0.974missing product features 12.5 2.9 0.947equipment downtime 13.1 2.1 0.940scrap costs 13.8 1.7 0.805

absenteeism due to accidents 14.8 4.0 0.956defects at turn-on 14.9 1.3 0.624manufacturing cycle time 16.9 2.5 0.937defects on arrival 16.9 2.0 0.848non-conformances 16.9 0.7 0.666

vender defect level, microprocessors 18.5 1.9 0.838post release redesign 19.0 2.5 0.842field failure rate 20.3 1.3 0.857accident rate 21.5 2.8 0.907defective lots received from vendors 21.6 1.7 0.976failure rate, PCB automatic test 23.7 0.5 0.182

---------------------------------------------------------------------------------------------------------first year warrantee costs 27.8 2.6 0.950computer program execution errors 29.9 0.4 0.364late deliveries to customers 30.4 0.8 0.994warranty fail rates 36.2 2.5 0.769

failure costs (internal + claims) 37.9 1.9 0.909product development cycle time 55.3 1.1 0.733

AVERAGE: 10.9 2.8 0.77


Slide 12 6/11/90-06110-1rev. 5/28/91

hi

med

low

himedlow

Org

aniz

ati

onal C

om

ple

xit

y

Technical Complexity

1 3 5

7 9 11

14 18 22

TARGET HALF-LIVESmonths


Slide 13 1/22/91-01221-1

PLAN

WHAT

IDENTIFICATION OF THEME

WHY CAUSAL ANALYSIS

WHO

WHEN

WHERE

HOW

SOLUTION PLANNING

EVALUATION OF RESULTS

STANDARDIZATION

DO

CHECK

ACTION

1

2

3

7

6

5

4AND IMPLEMENTATION

DATA COLLECTION

AND ANALYSIS

REFLECTION AND

NEXT PROBLEM

THE PDCA CYCLE and THE 7 STEPS


Slide 14 5/9/91-05091-1arev. 5/28/91

AUTOMOTIVE RELIABILITY IMPROVEMENT

Consumer Reports, April 1991

1980 1985 1990 19950

20

40

60

80

100

120

year

pro

ble

ms

per

100 c

ars

GM

Ford

Chrysler

Toyota

Nissan

Honda


Slide 15 5/9/91-05091-1rev. 5/28/91

AUTOMOTIVE RELIABILITY IMPROVEMENT

Consumer Reports, April 1991

pro

ble

ms

per

100 c

ars

year1980 1985 1990 1995

5

10

20

50

100

200

500

GM

Ford

Chrysler

Toyota

Nissan

Honda

80

76

79

205

73

94

halflife(mths)


Slide 16 QS-16B

ADI QIP GOALSIC OPERATIONS, ESTABLISHED PRODUCTS

METRIC 1987 HALF-LIFE 1992

On time delivery

Lead time

Manufacturing Cycle Time

Yield

Outgoing defect levels

Time to Market

EXTERNAL

INTERNAL

CORPORATE-WIDE COST MANAGEMENT

WHILE AGGRESSIVELY PURSUING

Process Defect Levels

85%

10 wks

500 PPM

9

9

9

>99.8%

<10 PPM<3 wks

15 wks

20%

9

9 >50%

5000 PPM 6 <10 PPM

4-5wks

36 mths 24 6 mths


Slide 17

ADI QIP GOALS

IC OPERATIONS, ESTABLISHED PRODUCTS

METRIC 1987 1990 1992

EXTERNALOn time delivery 85% 96% >99.8%Outgoing defect level 500 PPM 230 PPM <10 PPMLead time 10 weeks 5.4 weeks <3 weeks

% CRDs matched 31% 50% n/aexcess leadtime 3.9 weeks 2.8 weeks n/a

INTERNALManufacturing cycle time

15 weeks 8 weeks 4-5 weeks

Process defect level 5000 PPM 1100 PPM <10 PPMYield 20% 38% >50%Time to market 36 months ? 6 months

11/12/90-11120-3.doc


Slide 18 5/7/91-05071-8a

FY 1991 ADI CORPORATE SCORECARDACTUAL ACTUAL ACTUAL ACTUAL ACTUAL ACTUALBHMK BHMK BHMK BHMK BHMK

End FY 90 Q1 91 Q2 91 Q3 91 Q4 91 FY 91

ACTUAL

FY 90

ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL

Q1 91 Q2 91 Q3 91 Q4 91 FY 91

FY 87 PLAN FY 87 PLAN FY 87 PLAN FY 87 PLAN FY 87 PLAN

FINANCIAL

QIP

MANUFACTURING METRICS: IC PRODUCTS

MANUFACTURING METRICS: ASSEMBLED PRODUCTS

NEW PRODUCTS

SALES

SALES GROWTH YTY

CONTRIBUTION MARGIN

ROA (CM)

ON TIME DELIVERY (to FCD)

% CRD's NOT MATCHED

EXCESS LEADTIME

EMPLOYEE TURNOVER

OUTGOING PPM

PROCESS PPM

CYCLE TIME

YIELD

OUTGOING PPM

PLUG-IN YIELD

CYCLE TIME

% COST OF SCRAP/REWORK

BOOKINGS POST-85 PROD

FORECAST 3rd YR BOOKINGSof new product releases

485.2

7.0

6.0

7.1

94.9

52.2

2.7

13.3

587

981

65.4

38.4

1503

90.9

23.0

8.1

165.3

140.0

27.7

5.7

7.0

95.0

49.9

16.7

4.3

647

772

34.0

386

48.5

10.6

5.9

56.7

133.1

21.4

4.6

5.7

89.9

54.5

3.0

11.0

541

816

35.6

849

48.8

8.6

4.1

54.5

144.0

23.7

8.9

11.1

95.8

47.5

16.7

4.1

508

657

33.6

312

48.6

10.3

5.5

64.7

146.0

21.1

20.2

12.7

96.4

45.7

16.6

4.2

411

546

37.9

296

48.8

10.2

5.2

70.5

150.0

8.3

12.5

16.0

97.0

44.2

16.7

4.0

329

450

40.0

282

48.9

10.1

4.9

77.3

580.0

19.5

9.4

11.8

97.0

44.0

16.7

4.0

328

453

39.7

273

48.9

10.1

4.9

269.2


Slide 19 5/22/90-05220-4rev. 5/7/91

GOALS

IS

culture scorecard

projectsMETRIC

SSOLVINGPROBLEM

PERFORMANCE MEASUREMENT

does not mean

measurement

improvement+

monitoring

If you don't monitor it,

it will get worse.

If you don't measure it,

it will not improve.


Slide 20 4/8/90-04080-3rev 5/13/90

GOAL:IMPROVE CUSTOMER SERVICE

CUSTOMER SERVICE METRICS

ON TIME% late% early % on time

RESPONSIBILITYfactorywarehouse

creditcustomer

LATENESS/EARLINESSshipped late, how late?shipped early, how early?still late, how late?

months to ship late backlog

LEAD TIMEcustomer requested lead time% CRD's matchedexcess lead time

RESPONSIVENESStime to schedule an order

GOALS

ISculture scorecard

projectsMETRICS

SOLVINGPROBLEM


Slide 21 % Late 3Q91

Percent Of Lines Shipped LateQuarterly Data 1Q86-3Q91

ADS ADIPMIMDLDSPIPDCLDMEDADBV

100

10

1Half Life

(in months)15 211419 53920 17NA


Slide 22 c. 1991

ON TIME DELIVERY HALF LIFE - IN MONTHSAnalog Devices, Inc.

60

50

40

30

20

10

0

3Q88 4Q88 1Q89 2Q89 3Q89 4Q89 1Q90 2Q90 3Q90 4Q90 1Q91

21.57 22.77

18.3916.41

15.15 15.12 15.1516.95

21.18

43.50

60 +


Slide 23 % Late Sep 91

Percent of Scheduled Lines Shipped LateCustomer Service Performance (Oct 90 Through Sep 91)

Percent

Of

LInes

Late

Half Life(In Months)

100

10

1

0.1N/A N/A N/A N/A N/A N/A N/A6N/A

ADS CLD IPD DSP MDL PMI ADIBVADM MED

+


Slide 24 3/91-VRS Database

64 CUSTOMERS INVENDOR RATING DATABASE

ABFAGFAAirResearchAllen BradleyAllied SignalAmdahlAmetekAnalogicApolloAT&TBecton DickinsonBendix AvionicsBrown EngineeringCompugraphicCoulter ElectronicsDigital InstrumentEatonElectronics & SpaceEMCFinneganFlukeFord (Aerospace)GECGeneral DynamicsGeneral ElectricGouldHewlett-PackardHoneywellHughesInstronJET ElectronicsKodak

LittonLoralLucasM/A-COMMarquette ElectricMartin MariettaMasscompMcDonald DouglasMeasurexMicrocircuits SemiconductorParker Air & SpacePenastarPerkin ElmerPitney-BowesRaytheonRecognitionReliance ElectricRockwellSandersSiemensSikorskySpectra PhysicsTektronixTelecoTeledyneTeradyneTexas InstrumentsTrilliumUnited TechnologiesWalkins-Johnson Co.Waters AssociatesWestinghouse


Slide 25 c. 1991

Delivery PerformanceCustomer Measured% Late

100

50

30

20

10

5

3

2

1

HALF LIFE = 9*

QIP STARTED

Fe Ap Ju Au Oc De Fe Ap Ju Au Oc De Fe Ap Ju Au Oc De Fe Ap Ju Au Oc De Fe

Mr My Jl Se No Ja Mr My Jl Se No Ja Mr My Jl Se No Ja Mr My Jl Se No Ja Mr

1987 1988 1989 1990 1991

Actual Data Trend* Half Life is only calculated

over the period of time thatimprovement occurred Note: There is an average

of 22 companies per point


Slide 26 5/22/90-05220-1

HEWLETT-PACKARD VENDOR RATINGS

year ADI rank total suppliers category

linear IC suppliers

all IC suppliers

linear IC suppliers

all IC suppliers

16

8

15

12

8

5

5

1*

1986

1987

1988

1989

*tied with one other supplier


Slide 27 3/24/91-03241-3

DATAQUEST1990 SEMICONDUCTOR"SUPPLIER OF THE YEAR"

Awarded to "...manufacturers who exhibitextraordinary dedication to productquality and customer service."

Winners:

major supplier: Motorola

mid-size supplier: Analog Devices

niche supplier: Maxim


Slide 28 3/25/91-03251-1rev 4/1/91

SOME LESSONS LEARNED(One Person's Opinion)

"97% is good enough" -> no planned improvement

PMI acquisition

Reorganization (centralization) Manufacturing, QA Consolidation

CLD+MDD+MED+IPD=IED

(ACE+LSP)+DSP=SPD ADBV+ADS+PMI=?

New business planning process Product/Market/Function Strategy Managers

Eventually, you run out of "slack" need for cross-functional problem solving need for management participation

If you don't monitor it, it will get worse!

Fundamental re-evaluation of our QIP efforts Center for Quality Management (CQM) Shoji Shiba

It's easy to be distracted (even by the right things)

Input / Output Data Base

TQM / CQM

anti-Hawthorn Effect

7 steps weakness -> standardization -> control

©1987-2000 Arthur M. Schneiderman All Rights Reserved. Slide 1 2/13/90-PREZ-1 rev. 5/7/91 ANALOG...

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Transcript of ©1987-2000 Arthur M. Schneiderman All Rights Reserved. Slide 1 2/13/90-PREZ-1 rev. 5/7/91 ANALOG...