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Motorola Knowledge-Based Manufacturing

Motorola Knowledge-Based Manufacturing. Sonora Sourcing Case Study. August 15, 2006 Wendy Vittori Motorola Inc., Embedded Communications Computing. Agenda. Motorola – Embedded Communications Computing - Background The Situation The Solution Results Additional Information.

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Motorola Knowledge-Based Manufacturing

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  1. Motorola Knowledge-Based Manufacturing Sonora Sourcing Case Study • August 15, 2006 • Wendy VittoriMotorola Inc., Embedded Communications Computing

  2. Agenda • Motorola – Embedded Communications Computing - Background • The Situation • The Solution • Results • Additional Information

  3. Embedded Communications Computing Our Products and Solutions Our Position in Motorola  DRILL DOWN  DRILL DOWN Our Global Operations Our Position in the Industry Motorola Ranked #1 “The highest ranked vendor by the TEMs in this study, Motorola has a comprehensive portfolio of open standards-based communications server offerings, which it delivers out of its Embedded Communications Computing business unit. Motorola has been a driving force in the telco industry’s evolution to standards-based communications servers…” The Yankee Group Standards-Based Communications Servers for Telecommunications: Market Drivers, Inhibitors, Perceptions and Rankings January, 2006  DRILL DOWN  DRILL DOWN

  4. The Situation • CEM Manufacturing in China (Shanghai) • Key decision factor: Low labor costs • Requirements: • Extensive training to expedite knowledge and experience transfer • “Exact replica” of ECC’s Plant in Tempe Motorola Microsystems Inception 2004 2003 Today 1988 2005 1981 2002 • Assessment of Shanghai Operations • Results: • Late deliveries and decreasing product quality impact customer satisfaction • Rising production costs Main Causes: • ECC’s highly complex products required continuous engineering support • Customized products and short production runs increased costs • High manufacturing turnover rate • Time zone differences • Culture and language barriers Renamed as Motorola Computer Group (MCG)

  5. The Solution • Assessment of Manufacturing Alternatives • Key Options: • Outsource manufacturing • Internal production: Tempe (AZ), Nogales (Sonora, Mexico), Asia • Evaluation Criteria: • Internal Factors: Human resources, time zone compatibility, product complexity, cost • External Factors: Ease of imports and exports, ease of business operations, government incentives, access to education, infrastructure, and others Motorola Microsystems Inception CEM Manufacturing in China (Shanghai) 2004 2003 Today 1988 2005 1981 2002 • Transference of Operations to Nogales (Mexico) • Critical Decision Factors • Our manufacturing process: High Mix – Low Volume • Close working relationship between engineering centers and manufacturing site • Production close to customers and within same trade zone • Risk reduction through diversification Assessment of Shanghai Operations Renamed as Motorola Computer Group (MCG)

  6. Results • Improvement in operational results, especially in product quality and TTM • Additional benefits expected from regional development initiatives: • Nogales Port of Entry -- Hours of Operation • Free and Secure Trade (FAST) Program • SENTRI Program • Nogales Arizona Development

  7. Additional Information To access the Motorola Case Study, please visit Tecnológico de Monterrey website http://www.gda.itesm.mx/cic/. After registering, access the Case Catalogue (Catálogo de Casos). The case can be found under the Information and Technology Systems (Sistemas de Información y Tecnología) section; it is available in both Spanish and English. For further information, please contact one of the following parties: Dr. Jorge A. González González Director del Centro Internacional de Casos Instituto para el Desarrollo Empresarial Tecnológico de Monterrey, Campus Guadalajara Tel.: 52 (33) 3669 3000, ext. 3908. Enlace intercampus: 80-432-3908. E-mail: jgonza@itesm.mx Carola Venot-De-Suárez Strategic Planning Office: (602) 438-3437, E-mail: carola@motorola.com Motorola Inc., Embedded Communications Computing 2900 S. Diablo Way, Tempe, AZ 85282 U.S.A.

  8. Backup Slides

  9. The Future of Communications is Seamless Mobility • The promise of converged communications • Voice and data on multiple devices, delivered uninterrupted across multiple networks • User experience will be transformed by new applications and the ability to connect to anyone, anytime, anywhere Motorola is enabling OEMs to increase market share by providing complete communications server solutions that accelerate time-to-revenue for seamless mobility applications

  10. Accelerating Development of Communications Server Ecosystem • Leading the efforts to define and accelerate the adoption of communications servers through key industry associations • Motorola founding member of Communications Platform Trade Association • Premier member of Intel Communications Alliance • Motorola Communications Server Alliance • Validate 3rd party products with Motorola’s communications servers • Promoting standards-based technology to encourage third-party application development and create the next generation ecosystem

  11. Predictive Sourcing Sourcing Methodology Business Strategy • Shows how sourcing decisions affect core values to create competitive advantage • Delivers both decreased costs and long-term growth Core Value and Differentiators

  12. Four Steps To Predictive Sourcing Cost Considerations • From sourcing through delivery • Includes shipping, handling, quality, logistics management • Consider entire value chain • Assess both internal and external elements Innovation • Engineering throughout product lifecycle • New, differentiating capabilities drives profit Core Competency Competitive Advantages • Cost-based competitive advantage is fleeting • Avoid short-term savings that harm long-term advantage Environmental Assessment

  13. Drill Downs

  14. Cellular / Handheld Motorola, Nokia HP, Palm, Sony Computers we call “computers” Laptop, PC / Server Dell, HP, IBM Embedded Infrastructure Motorola Application-Enabling Platforms & Building Blocks Communications Computing Solutions+ 20 Years Leading Embedded Infrastructure Computing Computer Industry Data Switching and Transaction Processing Signal and Image Processing Networking, Telecomm, Storage Nokia, Alcatel, Lucent, Motorola, Nortel Medical Imaging, Aero, Defense, Industrial Automation GE Medical Systems, Raytheon, Applied Materials RETURN 

  15. Communications Computing SolutionsComponents Application-Enabling Platforms Pre-integrated and pre-tested carrier-grade platform solutions Macrocomponents PMC, PrPMC, PTMC and AMC modules Board-level building blocks Computing and communication single-board computers and blades in VMEbus, CompactPCI, and AdvancedTCA form factors + = + Platform-level building blocks Carrier-grade platforms based on open standards + Software building blocks Enabling software that makes it easier to use and integrate our boards and platforms. RETURN 

  16. Embedded Communications ComputingGlobal Operations Tempe, AZ Group Headquarters Munich, Germany ECC European Headquarters Sunnyvale, CA, USA Bangalore, India Hyderabad, India Loughborough, UK Nogales, Mexico Marlborough, MA RETURN 

  17. Motorola, Inc. Ed Zander, Chairman and Chief Executive Officer Networks and Enterprise Connected Home Mobile Devices Personal Communications Energy Systems Seamless Mobility Devices Cellular Networks MOTOwi4 Wireless Broadband iDEN Networks Network Services and Applications Management Commercial, Government and Industrial Solutions Global Relations and Resources Embedded Communications Computing Cable and Satellite Wireline Networks Connected Home Telecom Video iRadio Motorola Business Structure*Aligning With Seamless Mobility * Does not include functional units (HR/Finance/Legal/Facilities/Security) or the CTO office RETURN 

  18. Motorola Ranked #1 “The highest ranked vendor by the TEMs in this study, Motorola has a comprehensive portfolio of open standards-based communications server offerings, which it delivers out of its Embedded Communications Computing business unit. Motorola has been a driving force in the telco industry’s evolution to standards-based communications servers…” Motorola Press Release March 22, 2006 The Yankee Group Standards-Based Communications Servers for Telecommunications: Market Drivers, Inhibitors, Perceptions and Rankings January, 2006 RETURN 

  19. Production Automation Types Mix Automation Mass Customization High Volume (Number of Products) Flexible Automation Medium Small Batch (Semi-Automation) Manual Methods Low Low High Medium Mix (Number of Components) RETURN 

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