Transcript Document

(E)IS...THE FUEL FOR CONTINUOUS IMPROVEMENT
Art Schneiderman
Analog Devices
Analog Devices at a Glance
The Quality Improvement Process (TQM)
Linking Performance Measurements to Corporate Goals
The "Half-Life" Concept
ADI's 1992 QIP Goals
The Quarterly "Scorecard"
ADI's Executive Information System
An Example: Customer Service
Lessons Learned
May 22, 1990
©1985, 2000 Arthur M. Schneiderman All Rights Reserved.
Slide 1
5/22/90-05220-7
Analog Devices at a Glance
• Headquartered in Norwood Massachusetts
• Publicly Held (NYSE Symbol ADI)
• $453 Million in Sales (FY1989)
• 48% of Sales Outside United States
• 5200 Employees Worldwide
©1985, 2000 Arthur M. Schneiderman All Rights Reserved.
Slide 2
c. 1990-PREZ-1
ANALOG DEVICES AT A GLANCE
(cont)
Products: ICs, assembled products, subsystems
Applications: precision measurement & control
Markets: data acquisition
40% industrial/instrumentation
30% military/avionics
13% computer
17% other
Integrated supplier
design
manufacturing (8 locations)
direct sales (100 locations)
©1985, 2000 Arthur M. Schneiderman All Rights Reserved.
Slide 3
c. 1990-PREZ-1a
1989 Top Customers Worldwide
Customer
IBM (US, Japan & France)
GE/RCA
Fuji (Japan)
HP (US, UK & Germany)
Honeywell (US, Germany)
General Dynamics (US)
Raytheon (US)
Siemens (US, Germany)
TI (US)
Mitsubishi (Japan)
Fujitsu (Japan)
Toshiba (Japan)
Marconi (US, UK)
Hughes (US)
Rockwell (US)
Hitachi (Japan)
Westinghouse (US)
Philips (US, Europe)
Motorola (US)
DCASR (US)
©1985, 2000 Arthur M. Schneiderman All Rights Reserved.
Bookings
$M
Cumulative
%
26.8
10.5
10.3
9.1
7.4
5.4
5.1
5.1
4.1
4.0
4.0
3.7
3.6
3.4
3.3
3.3
3.1
3.1
3.0
2.7
6.0
8.3
10.6
12.6
14.2
15.5
16.6
17.7
18.6
19.5
20.4
21.1
22.0
22.8
23.5
24.3
25.0
25.6
26.3
26.9
Slide 4
c. 1990-PREZ-11
TOP 10 MIXED SIGNAL IC SUPPLIERS
Sales $M
300
RMS=1.4
250
200
150
100
50
0
ADI
National
NEC
Philips
TI
Hitachi
Toshiba
Sanyo
Matsushita
Motorola
Source: VLSI Research
©1985, 2000 Arthur M. Schneiderman All Rights Reserved.
Slide 5
2/14/90-02140-1
rev 2/16/90
Financial Model
FY 1987-FY 1992
Sales Growth
20-25 %/yr
Operating Profits
17 %
Profit after Tax
9.4 %
Return on Capital
©1985, 2000 Arthur M. Schneiderman All Rights Reserved.
15.0 %
Slide 6
4/12/89-04129-1t.doc
ADI CORPORATE QIP COUNCIL
MEMBERS:
CHARTER:
Jerry Fishman
Executive VP
Kozo Imai
VP, Japanese Operations
Larry LaFranchi
Operations Controller
Bill Manning
Division GM
Doug Newman
VP, Sales and Marketing
Art Schneiderman, Chairman
VP, Quality/Productivity Improvement
Ray Stata
Chairman of the Board and President
Goodloe Suttler
Division GM
Suzanne Thomson
Director, Training & Development
Tom Urwin
VP, European Operations
QIP Organization
QIP Goals Deployment
Training
Monitoring
priorities
Juran
metrics
Incenting/Rewarding
©1985, 2000 Arthur M. Schneiderman All Rights Reserved.
Slide 7
4/8/90-QIP-15a
GOALS
culture
scorecard
THE QIP CULTURE
IS
PROBLEM
SOLVING
projects
METRICS
We each have a dual function
daily job
SDCA cycle
process improvement
PDCA cycle
We are committed to improving customer satisfaction
We are dedicated to continuous improvement (kaizen)
We are part of a parallel organization: functional and cross-functional
We are a continuously learning organization
©1985, 2000 Arthur M. Schneiderman All Rights Reserved.
Slide 8
4/8/90-04080-4
QUALITY IMPROVEMENT PROCESS
GOALS
culture
scorecard
IS
PROBLEM
SOLVING
projects
©1985, 2000 Arthur M. Schneiderman All Rights Reserved.
METRICS
Slide 9
3/11/90-03110-1
rev 4/8/90
GOALS
culture
scorecard
IS
PROBLEM
SOLVING
projects
PROBLEM SOLVING
METRICS
Participants:
Cross Functional Problem Solving Teams (QIP Teams)
Task Forces
QC Circles
Individuals
Systematic Approach:
Deming Cycle (PDCA)
Tools:
7 QC Tools (fishbone, histogram, ...)
7 Management Tools (KJ Method, affinity diagram,...)
Design of Experiments (Taguchi, etc.)
SQC (control charts)
SPC (Cp, Cpk)
Quality Cost (failure, prevention, appraisal)
QFD
Hoshin Kanri
SMED
TPM
EI
JIT/Kanban (cycle time, WIP reduction)
©1985, 2000 Arthur M. Schneiderman All Rights Reserved.
Slide 10
4/8/90-04080-1
GOALS
culture
scorecard
IS
PROBLEM
SOLVING
projects
PROBLEM SOLVING
METRICS
The Deming Cycle (PDCA)
1
PERCEPTION OF PROBLEM
2
EVALUATION OF
CURRENT SITUATION
3
ANALYSIS OF CAUSES
4
PLANNING OF
COUNTER-MEASURES
DO
5
IMPLEMENTATION OF
COUNTER-MEASURES
CHECK
6
EVALUATION OF RESULTS
7
STANDARDIZATION
8
SUMMARY & FUTURE PLANS
PLAN
WHAT
WHY
WHO
WHEN
WHERE
HOW
ACTION
©1985, 2000 Arthur M. Schneiderman All Rights Reserved.
Slide 11
5/22/90-05220-3
Process Quality Improvement
Counter Action I
%
(Dip Soldering Process)
0.4%
0.4
0.3
Failure Rate
Counter Action II
0.2
ppm
40ppm
Omit Hand Rework
Process
Basic Working
Guide Manual
30
PC Board Design
Instructions
20
3ppm
10
Masking Method
Improvement
0
Revision of Manufacturing
Engineering Standards
Dip Solder was
made to one
worker job
40
0.1
Counter Action III
0
11
1
4
78
7
10
1
4
7
10
10
1
79
4
80
7
10
1
4
81
7
10
1
4
82
7
10 month
FY
Source: Kenzo Sasaoka, President
Yokagowa-Hewlett-Packard 7/84
©1985, 2000 Arthur M. Schneiderman All Rights Reserved.
Slide 12
c. 1982-YHP
YOKOGOWA HEWLETT PACKARD
Dip Soldering Defects
10,000
1
1,000
50 % improvement each:
3.6 months
.1
100
.001
10
.0001
0
PPM
.01
1
12
24
36
48
60
months
©1985, 2000 Arthur M. Schneiderman All Rights Reserved.
Slide 13
12/12/85-ZD4
PROPOSED HALF-LIFE MODEL VALUES
MONTHS
PROJECT
TYPE
uni-functional
EXAMPLE
S
MODEL HALF-LIFE
operator errors
EXPECTED
RANGE
3
0 to
6
9
6 to
12
1
8
12 to
24
WIP
cross-functional
new product cycle time
outgoing PPM
multi-entity
vendor quality
warranty costs
©1985, 2000 Arthur M. Schneiderman All Rights Reserved.
Slide 14
3/19/87-imp-9
rev. c. 1989-hflf-2
ADI RESPONSE TO HALF-LIFE CONCEPT
Critics
Supporters
Embodies the concept of KAIZEN
Doesn't reflect where we need to be
Easy to understand
Hard to understand
Makes sense
Hard to use
Data not negotiation based
realistic
manual vs. computerized
Accepted by line organization
assumes instant startup
Works
assumes constant rate of learning
focuses on results not process
focuses on results not process
"...the rate at which individuals and organizations learn
may become the only sustainable competitive advantage..."
Ray Stata
©1985, 2000 Arthur M. Schneiderman All Rights Reserved.
Slide 15
2/18/90-02180-2
GOALS
culture
scorecard
ADI's CONSTITUENCIES
IS
PROBLEM
SOLVING
projects
METRICS
CUSTOMERS
partnership
ADI's
growth
BUSINESS
OBJECTIVES
EMPLOYEES
capital
return
©1985, 2000 Arthur M. Schneiderman All Rights Reserved.
STOCKHOLDERS
Slide 16
c. 1/17/89-?/3/12/90-03120-2
rev 4/8/90
GOALS
culture
scorecard
IS
PROBLEM
SOLVING
projects
METRICS
BUSINESS
OBJECTIVES:
ADI QIP GOALS
MARKET LEADERSHIP (RMS)
REVENUE GROWTH
PROFITABILITY
DRIVERS:
BE RATED #1 BY OUR CUSTOMERS
IN TOTAL VALUE DELIVERED
EXTERNAL LEVERS: PRODUCTS
DEFECT LEVELS
ON-TIME DELIVERY
LEADTIME
PRICE
RESPONSIVENESS
INTERNAL LEVERS:
TIME TO MARKET
PROCESS PPM
MANUFACTURING CYCLE TIME
YIELD
©1985, 2000 Arthur M. Schneiderman All Rights Reserved.
Slide 17
c. 1/17/89-AMS-5
rev. 4/8/90-04080-2
ADI QIP GOALS
(IC OPERATIONS, ESTABLISHED PRODUCTS)
METRIC
1987
HALF-LIFE
1992
EXTERNAL
On time delivery
85%
9
>99.8%
Outgoing defect levels
500 PPM
9
<10 PPM
Lead time
10 wks
9
<3 wks
Manufacturing Cycle Time
15 wks
9
4-5wks
Process Defect Levels
5000 PPM
6
<10 PPM
Yield
20%
9
>50%
Time to Market
36 mths
24
6 mths
INTERNAL
WHILE AGGRESSIVELY PURSUING
CORPORATE-WIDE COST MANAGEMENT
©1985, 2000 Arthur M. Schneiderman All Rights Reserved.
Slide 18
c. 7/12/87-QIP-16/QS-16B
rev. 7/25/87
FY1990 CORPORATE SCORECARD
FINANCIAL
End FY89
ACTUAL
BHMK
Q1 90
ACTUAL
BHMK
Q2 90
ACTUAL
BHMK
Q3 90
ACTUAL
BHMK
Q4 90
ACTUAL
BHMK
FY 90
ACTUAL
SALES
SALES GROWTH YTY
CONTRIBUTION MARGIN
ROA (CM)
QIP
ON TIME DELIVERY (To FCD)
% CRDs NOT MATCHED
EXCESS LEADTIME
LABOR TURNOVER
MANUFACTURING METRICS: IC PRODUCTS
OUTGOING PPM
PROCESS PPM
CYCLE TIME
YIELD
MANUFACTURING METRICS: ASSEMBLED PRODUCTS
OUTGOING PPM
PLUG-IN YIELD
CYCLE TIME
% COST OF SCRAP/REWORK
NEW PRODUCTS
ACTUAL
FY87 PLAN
ACTUAL
FY87 PLAN
ACTUAL
FY87 PLAN
ACTUAL
FY87 PLAN
ACTUAL
FY87 PLAN
ACTUAL
BOOKINGS POST-85 PROD
FORECAST 3rd YR BOOKINGS
of new product releases
FY89
1Q90
©1985, 2000 Arthur M. Schneiderman All Rights Reserved.
2Q90
3Q90
Slide 19
4Q90
FY90
C. 1989
GOALS
culture
scorecard
PERFORMANCE MEASUREMENT
IS
PROBLEM
SOLVING
projects
METRICS
If you don't measure it,
it will not improve.
does not mean
measurement
©1985, 2000 Arthur M. Schneiderman All Rights Reserved.
improvement
Slide 20
5/22/90-05220-4
GOALS
culture
scorecard
IS
PROBLEM
SOLVING
projects
METRICS
GOAL:
IMPROVE CUSTOMER SERVICE
CUSTOMER SERVICE METRICS
ON TIME
% late
% early
RESPONSIBILITY
factory
warehouse
% on time
credit
customer
LATENESS/EARLINESS
shipped late, how late?
shipped early, how early?
still late, how late?
months to ship late backlog
LEAD TIME
customer requested lead time
% CRD's matched
excess lead time
RESPONSIVENESS
time to schedule an order
©1985, 2000 Arthur M. Schneiderman All Rights Reserved.
Slide 21
4/8/90-04080-3
rev 5/13/90
On Time Customer Service Improvement
Quarterly Data (1Q87 – 4Q89)
100
ADS
ADBV
MED
CLD
IPD
DSP
MDL
ADI
10.8
16.5
8.4
18.0
13.8
6.9
54.9
13.2
10
1
0.1
Half Life
In Months
©1985, 2000 Arthur M. Schneiderman All Rights Reserved.
Slide 22
4Q89-% Late
CREDITS
Elizabeth Derwin
Jim Doscher
Wally Francis
Rich Lynch
Ira Moskowitz
Holley Murphy
Art Schneiderman
Pilot Executive Software
©1985, 2000 Arthur M. Schneiderman All Rights Reserved.
Slide 23
5/22/90-05220-2
1
2
Analog Devices - 1990 Scorecard
ADI
Qtr 1 1990
?
Metric
Actual
Plan
Variance
% Variance
.00
95.90
51.40
2.90
11.10
.00
96.70
46.10
3.40
13.00
.00
-.80
5.30
-.50
-1.90
.00
-.83
11.50
-14.71
-14.62
IC Outgoing PPM
IC Process PPM
IC Cycle Time
IC Yield
1023.00
1601.00
62.60
35.70
1481.00
1966.00
52.10
38.70
-458.00
-365.00
10.50
-3.00
-30.93
-18.57
20.15
-7.75
AP Outgoing PPM
Plug In Yield
AP Cycle Time
Scrap/Rework Cost
5746.00
91.70
23.90
12.50
1715.00
90.50
24.20
8.80
4031.00
1.20
-.30
3.70
235.04
1.33
-1.24
42.05
QIP:
On Time Delivery % (To FCD)
% CRDs Not Matched
Excess Leadtime (Weeks)
Employee Turnover %
Retrace
Utilities
1989 Scorecard
Commentary
©1985, 2000 Arthur M. Schneiderman All Rights Reserved.
Slide 24
Return
1Q90-Scorecard-1
1
Analog Devices - 1990 Scorecard
ADI
Qtr 1 1990
?
Metric
NEW PRODUCTS:
Post 1985 Products
Forecasted 3rd Year Bookings
FINANCIALS:
Sales
Sales Growth (YTY)
Contribution Margin
ROA (Contribution Margin)
Retrace
Utilities
1989 Scorecard
Actual
Plan
.00
.00
.00
.00
39.10
14.20
.00
-39.10
-14.20
.00
-100.00
-100.00
.00
109.70
-3.90
7.20
6.90
.00
112.40
-1.50
7.80
8.60
.00
-2.70
-2.40
-.60
-1.70
.00
-2.40
160.00
-7.69
-19.77
Commentary
©1985, 2000 Arthur M. Schneiderman All Rights Reserved.
Slide 25
Variance % Variance
Return
1Q90-Scorecard-2
CUSTOMER SERVICE METRICS – ON TIME/RESPONSIBILITY
April 1990
ADBV
ADS
CLD
CTS
DSP
IPD
MDL
MED
ADI
ALL
Early %
On Time %
Not Late %
Division %
Warehse. %
9.94
6.64
30.86
7.82
2.52
5.67
61.94
20.24
9.28
85.55
89.98
66.79
91.62
95.50
88.20
28.39
78.87
86.72
95.49
96.62
97.65
99.44
98.02
93.87
90.32
99.11
96.00
4.38
3.91
4.22
.56
2.52
6.87
8.39
2.58
4.53
.29
.34
.18
.00
.36
.36
.00
.00
.31
.52
.44
.30
.00
.18
.23
1.29
.10
.39
9.28
86.72
96.00
4.53
.31
.39
Utilities
Change Metrics
©1985, 2000 Arthur M. Schneiderman All Rights Reserved.
Credit %
Return
Slide 26
Apr 90-OTD
Percent Of Lines Shipped Late (May 89 through Apr 90)
ADBV
100 MED
ADS
ADI
CLD
DSP
IPD
MDL
+
++
10
+
+
+
+
1
0.1
Half NA
NS
Life (In months)
NS
NS
©1985, 2000 Arthur M. Schneiderman All Rights Reserved.
N/A
8
Slide 27
NS
NS
Apr 90-% Late
ADI Half-Lives by month 5/89 to 4/90
60
50
40
30
20
10
Hlf Life
5/89
9
6/89
7
7/89
7
8/89
7
9/89
8
10/89
10
11/89
11
12/89
15
1/90
47
2/90
60
3/90
60
0
May Jun
Jul
Aug Sep Oct Nov Dec Jan Feb Mar Apr
89
90
4/90 N/A
©1985, 2000 Arthur M. Schneiderman All Rights Reserved.
Slide 28
Apr 90-ADI half-life
Print
/ADI
TABLE: CSTB
ENTITY
LATEST PERIOD
ADI
Reset
CUSTOMER
Adi Ontime
?
TYPE
ERY_SHIP_PCT ON_TIME_PCT NOT_LATE_PCT DIVISION_PCT
(4/90)
(4/90)
(4/90)
(4/90)
TOTAL
TOTAL
TOTAL
TOTAL
9.28
86.72
96.00
4.53
Metrics
Views
Calendar
Return
Select label, composite, or new key field.
©1985, 2000 Arthur M. Schneiderman All Rights Reserved.
Slide 29
Apr 90-S&D-1
?
ADI CUSTOMER SERVICE METRICS
ASAP
ASAP_PCT
AVG_SHIP
BACKLOG
CRD_HOLD_PCT
CRED_REF_PCT
CREDIT
CREDIT_HOLD
CREDIT_PCT
CREDIT_REF
CUST_STOP
CUST_STP_PCT
CUSTOMER
CUSTOMER_LT
CUSTOMER_PCT
DISTRIBUTION
DISTRN_PCT
DIV_WAREHSE
DIV_WE_PCT
DIVISION
\/
Number Of ASAP Orders Placed During The Period
Percent Of Orders Received That Were ASAP
Weighted Average Number of Shipments Per Period
Total Number Of Unshipped Orders
Percent Of Lines Late Due To Credit Hold
Percent Of Lines Late Due To Credit Referrals
Number Of Lines Late Due To All Credit Causes
Number Of Lines Late Due To Credit Hold Causes
Percent Of Lines Late Due To All Credit Causes
Number Of Lines Late Due To Credit Referrals
Number Of Lines Late Due To Customer Stops
Percent Of Lines Late Due To Customer Stops
Number Of Lines Late Due To All Customer Causes
Average Customer Requested Lead Time
Percent Of Lines Late Due To All Customer Causes
Number Of Lines Late Due To All Distribution Causes
Percent Of Lines Late Due To All Distribution Causes
Lines Late Due To Divisional Warehouse Error
Percent Of Lines Late Due To Divisional Warehouse Error
Number Of Lines Late Due To All Divisional Causes
END
CANCEL CLEAR
DONE
Select label, composite, or new key field
©1985, 2000 Arthur M. Schneiderman All Rights Reserved.
Slide 30
c. 1987-CS Metrics
Print
/ADI
CUSTOMER
TABLE: CSTB
CUSTOMER
LATEST PERIOD Finished
Adi Ontime
?
TYPE
ERY_SHIP_PCT ON_TIME_PCT NOT_LATE_PCT DIVISION_PCT
(4/90)
(4/90)
(4/90)
(4/90)
CORPORATE KEY ACCOUNT
DOMESTIC KEY ACCOUNT
FOREIGN KEY ACCOUNT
KEY ACCOUNT
NON KEY ACCOUNT
ADKK
ALLEN BRADLEY
AMOCO
ARMCO
ATT
BEACKMAN
BENDIX
BETHLEHEM STEEL
Reset
\/
END
Metrics
Views
Calendar
Return
Select label, composite, or new key field.
©1985, 2000 Arthur M. Schneiderman All Rights Reserved.
Slide 31
Apr 90-S&D-2
Print
/ADI
TABLE: CSTB
ENTITY
LATEST PERIOD
DIST – ADI – HEWLETT
OEM – ADI - HEWLETT
Reset
Adi Ontime
/OEM/DIST
/HEWLETT PACKARD
?
CUSTOMER_LT
(4/90)
TOTAL
7.64
8.34
Metrics
Views
Calendar
Return
Select label, composite, or new key field.
©1985, 2000 Arthur M. Schneiderman All Rights Reserved.
Slide 32
Apr 90-S&D-3
DIST – ADS – HEWLETT PACKARD
METRIC: CUSTOMER_LT (4/90)
5/89
N/A
6/89
7.17
10
7/89
3.64
8
8/89
N/A
6
9/89
6.83
4
10/89
8.75
2
11/89
8.24
12/89
9.51
1/90
6.29
2/90
6.93
3/90
8.11
4/90
7.64
12
0
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
89
©1985, 2000 Arthur M. Schneiderman All Rights Reserved.
Jan
Feb
90
Slide 33
Mar
Apr
Apr 90-HP lead time
CUSTOMERS IN VENDOR RATING DATABASE
ABB
AFGA
Allen Bradley
Allied Signal
Ametek
Analogic
Apollo
AT&T
Bendix
Compugraphic
Eaton
Ford
General Electric
GEC
Gould
Hewlett-Packard
Honeywell
Hughes
Kodak
Loral
Lucas
M/A-COM
Marquette Electric
Masscomp
Measurex
Perkin Elmer
Raytheon
Reliance Electric
Rockwell
Sanders
Siemens
Sikorsky
Tektronix
Teledyne
Teradyne
Texas Instruments
Trillium
United Technologies
Waters Associates
Westinghouse
©1985, 2000 Arthur M. Schneiderman All Rights Reserved.
Slide 34
Feb 90-Cust data base
ON TIME DELIVERY, CUSTOMER MEASURED
100.00
QIP STARTED
%
L
A
T
E
10.00
HALF-LIFE = 10 MONTHS
1.00
Fe Ap
1987
Ju
Au Oc Dec Fe Ap
1988
Ju
Au Oc Dec Fe Ap
1989
Actual Data
Ju
Au
Oc Dec Fe
1990
Trend
(Ave: 21 C9ompanies per point)
©1985, 2000 Arthur M. Schneiderman All Rights Reserved.
Slide 35
Feb 90-CMD
HEWLETT-PACKARD VENDOR RATINGS
year
ADI rank
total suppliers
1986
8
16
linear IC suppliers
1987
5
8
linear IC suppliers
1988
5
15
all IC suppliers
1989
1
12
all IC suppliers
*
*
category
tied with one other supplier
©1985, 2000 Arthur M. Schneiderman All Rights Reserved.
Slide 36
5/22/90-05220-1
(E)IS LESSONS LEARNED
May 22,1990
The system MUST be:
driven by business needs
user friendly
graphical, colorful
menu/mouse driven (no acronyms)
logical,intuitive and efficient
permit drilldown/consolidation
accessible and responsive
easy to get hard copy
available in 3-6 months
start with top management
financials first, then metrics
Be prepared for user proliferation
top to bottom
err on the side of open access
Be prepared for information proliferation
EIS to DSS
©1985, 2000 Arthur M. Schneiderman All Rights Reserved.
Slide 37
5/22/90-05220-5
PRACTICE THE PRINCIPLES OF QIP
Break down cross-functional barriers:
"You define the needs; we'll decide the
best way to meet them".
vs.
"Let's work together to determine the
best solution to the problem".
uncover latent needs
innovate new solutions
(E)IS, THE FUEL FOR CONTINUOUS IMPROVEMENT
©1985, 2000 Arthur M. Schneiderman All Rights Reserved.
Slide 38
5/22/90-05220-6