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  1. Title QIP Strategic Plan Presentation c. August 1987 Arthur M. Schneiderman ©1987, 2000 Arthur M. Schneiderman All Rights Reserved.

  2. ADI QIP LONG RANGE PLAN OBJECTIVES to achieve widespread consensus on, and commitment to a set of QIP goals to be achieved by the end of our next strategic planning cycle (1992) to establish an approximate 6 year plan identifying key milestones and activities to agree on a detailed 1987 QIP Plan that will: clarify our current QIP status reaffirm to the entire organization the "why and what" of QIP convincingly demonstrate top management's ongoing commitment to QIP build widespread confidence in the effectiveness of a systematic QIP generate the momentum that will be needed if we are to meet our goals ©1987, 2000 Arthur M. Schneiderman All Rights Reserved. c. 10/28/86-QIP-1

  3. TEXAS INSTRUMENTS, HIJI, JAPAN FACILITY: 4" wafer fab and assembly of bipolar IC's built 1974, 1300 employees "..to have our products rated #1 in quality by OVERALL GOAL: (1980) more than 50% of our customers by 1985.." RESULTS: defect levels reduced to 20 PPM (WSJ, 10/3/86) average unit cost down by factor of 7 % customers rating them #1 in 1985: 45% linear products TTL products 60% WINNERS OF 1985 DEMING PRIZE "We've gone as far as we can in manufacturing. We are focusing on IC design for further defect reduction." Kimio Nonaka, Manager of TQC ©1987, 2000 Arthur M. Schneiderman All Rights Reserved. c. 10/10/86-QIP-2rev. 10/26/86

  4. TEXAS INSTRUMENTS Hiji Plant, Japan customer measured defect levels 10,000 50 % improvement each: 10.3 months 1000 defect levels PPM 100 WSJ, 10/3/86 10 0 1 2 3 4 5 6 7 years Source: IMPRO 86, 10/9-10/86 ©1987, 2000 Arthur M. Schneiderman All Rights Reserved. c. 10/13/86-QIP-3

  5. QIP part of each organization's periodic quality audits corp. Quality Steering Com. internal/external PR policy deployment quality manifesto initial QIP status survey divisional QIP Councils culture structures QSC focus on: QSC develops goals ADI QIP PLAN STARTUP ROLLOUT INSTITUTIONALIZE PHASE: QIP YEAR: 1 2 3 4 5 6 ACTIVITIES/ ORGANIZATION: 3-5 pilot projects all div's involved GUIDING in QIP activities TRAINING success stories OUTPUTS: MONITORING demand for heroes interest in QIP QIP training REWARDING ©1987, 2000 Arthur M. Schneiderman All Rights Reserved. c. 10/26/86-QIP-4

  6. cooperativeness responsiveness productivity customer driven mfg. excellence cycle time support process service product quality innovative PROPOSED ADI QIP MODEL RESULTS information systems I Q P organizational development participative mgmt. innovation environment MANAGEMENT TOOLS personal growth customer focus external internal flexibility shared resources autonomous div's ©1987, 2000 Arthur M. Schneiderman All Rights Reserved. c. 10/28/86-QIP-5

  7. 1987 QIP STATUS SURVEY OBJECTIVE: to determine the current state of each division/corporate's QIP activities DIMENSIONS: Organization: is there a QIP Council? membership charter meeting frequency prospectives on QIP commitment sense of urgency are there QIP training programs? are there trained facilitators? Projects how many? how selected who participated how long use of SQC or other tools? Results quantitative measures of improvement (improvement curves) ADI QIP STATUS REPORT success stories challenges ©1987, 2000 Arthur M. Schneiderman All Rights Reserved. c. 10/28/86-QIP-6

  8. ADI 1992 QIP GOALS EXTERNAL PERSPECTIVE To have our products rated #1 in TOTAL VALUE by more than 50% of our customers based on: lead time right products delivery performance support features responsiveness price cooperativeness quality/reliability willingness to form partnership durability safety operating cost serviceability maintenance cost reputation expected life understanding resale value aesthetics ©1987, 2000 Arthur M. Schneiderman All Rights Reserved. c. 10/28/86-QIP-7rev. 7/31/87

  9. ADI 1992 QIP GOALS INTERNAL PERSPECTIVE To constantly strive for the elimination of all FORMS OF WASTE at all entities, functions and levels within ADI Manufacturing and Design Other Areas < 10 PPM defect levels timely financial reporting >99.8% on time delivery reduced turnover <3 weeks lead time effective meetings <3 weeks mfg. cycle time actionable information <20 weeks design cycle perfect safety records 25X reduction in active WIP 250X reduction in changeover times ©1987, 2000 Arthur M. Schneiderman All Rights Reserved. c. 10/27/86-QIP-8

  10. THE KNOWLEDGE PYRAMID ACTION KNOWLEDGE INFORMATION DATA ©1987, 2000 Arthur M. Schneiderman All Rights Reserved. c. 10/27/86-QIP-9

  11. FORMS OF WASTE (MUDA) Ryuzaburo Kaku, Canon Taiichi Ohno, Toyota The Nine Wastes The Seven Wastes waste in processing itself waste in rejects waste of time waste in parts inventory waste of making defective parts waste in indirect labor waste of motion waste in equipment and facilities waste of overproduction waste in expenses waste of inventory waste in design waste of transportation waste in human resources waste in operations waste in production startup of new products ©1987, 2000 Arthur M. Schneiderman All Rights Reserved. c. 10/28/86-QIP-10

  12. TOP MANAGEMENT'S 1987 GOALS Guide: quality manifesto overall goals (quantitative and measurable) steering committee charter incentives implications Get Trained: Juran on Quality Improvement (on-going) statistical methods quality literature Set Example: QIP projects (1-2 each) e.g.: information systems customer interviews Be Visible: regular "air time" to QIP periodic (semi-annual?) QIP Audits reward successes (non-financial) annual QIP award? integrate QIP into other activities strategic planning various Councils various Staffs 10-20% of their TIME spent on QIP activities ©1987, 2000 Arthur M. Schneiderman All Rights Reserved. c. 10/27/86-QIP-11

  13. INNOVATION KAIZEN vs. design, production science and FOCUS and marketing technology narrow: broad: quality, cost feature TARGETING safety, efficiency technique product development conventional leading edge, EXPERTISE break through know-how major CAPITAL very modest investment NEEDS small steps PROGRESS big jumps spontaneous continuous RESULTS very dramatic not dramatic VISABILITY INVOLVEMENT selected few everyone individual COOPERATION group activity effort RECOGNITION effort, process results EVOLUTION REVOLUTION ©1987, 2000 Arthur M. Schneiderman All Rights Reserved. 12/12/85-ZD3-QIP-12

  14. ADI QIP HISTORIC OVERVIEW 1987 PRIORITIES PRIMARY ADI CORPORATE GOALS ALL DIV's LOCAL MEASURES CUSTOMER SERVICE ON TIME DELIVERY INNOVATION REDUCED DESIGN CYCLE TIME MANUFACTURING EXCELLENCE REDUCED MFG. CYCLE TIME HUMAN RESOURCES TURNOVER RATE BUSINESS SUCCESS COST MANAGEMENT CONTINUED QIP THRUSTS IN IMPROVED CUSTOMER SERVICE AND CYCLE TIMES DIVISIONAL PRIORITIZATION OF NEW QIP THRUSTS ©1987, 2000 Arthur M. Schneiderman All Rights Reserved. 11/10/86-QIP-13

  15. ADI QIP DEPLOYMENT THE CORPORATE OBJECTIVE Ray Stata Consensus Customers Stockholders Suppliers Community Employees CORPORATE QIP COUNCIL Customer Service Manufacturing Excellence HR Excellence MIS Excellence Innovation ? ? on-time delivery lead time cycle time PPM yield time-to-market CAD HRAC HR Forum ATP QIP MANUFACTURABILITY Manufacturing Technical Council Council CORPORATE QIP OBJECTIVES ©1987, 2000 Arthur M. Schneiderman All Rights Reserved. 6/15/87-QIP-14/100

  16. ADI CORPORATE QIP COUNCIL MEMBERS: Jerry Fishman Kozo Imai Larry LaFranchi Bill Manning Doug Newman Art Schneiderman, Chairman Ray Stata Graham Sterling Goodloe Suttler Sue Thomson Tom Urwin CHARTER: QIP Organization priorities QIP Goals Deployment Juran Training metrics Monitoring Incenting/Rewarding ©1987, 2000 Arthur M. Schneiderman All Rights Reserved. c. 7/15/87-QIP-15

  17. ADI QIP GOALS (IC OPERATIONS) METRIC 1987 1992 HALF-LIFE EXTERNAL On time delivery 85% 9 >99.8% Outgoing defect levels 500 PPM 9 <10 PPM Lead time* <3 wks 10 wks 9 INTERNAL Manufacturing Cycle Time 15 wks 9 4-5wks Process Defect Levels <10 PPM 5000 PPM 6 Yield 20% 9 >50% 36 mths 6 mths Time to Market 24 WHILE AGGRESSIVELY PURSUING CORPORATE-WIDE COST MANAGEMENT *at 95% level of service ©1987, 2000 Arthur M. Schneiderman All Rights Reserved. c. 7/12/87-QIP-16/QS-16Brev. 7/25/87

  18. A DIVISIONAL QIP IMPLEMENTATION ADI QIP Goals Division QIP Council GM, Chairman Staff Division Specific Goals QIP Manager STEERING QIPS PROBLEM SOLVING QIPS time to market PPM correlation ESD yield innovation ©1987, 2000 Arthur M. Schneiderman All Rights Reserved. 7/12/87-QIP-17

  19. AN EXAMPLE OF QIP DEPLOYMENT Corporate QIP Council Meet Customer's Needs Customer Service ATP QIP Team On Time Delivery Eliminate Double Bookings ATP Metrics Lead time "when late Cause % late how late" No Inventory (factory controllable) Credit Hold (Bill Casey) Division Over credit limit Late from PI Kits late TO PI Increase credit line Scheduling error Letter to Customer Sales Engineer Expedites Change to "pull" system ©1987, 2000 Arthur M. Schneiderman All Rights Reserved. 7/14/87-QIP-18

  20. A COMPARISON: vs TASK FORCE QIP TEAM objective/ general/vague specific problem statement not agreed upon multiple/conflicting measure soft hard goal: level unspecified/arbitrary clear time frame trivial/impossible achievable/stretch constraints unidentified explicit unspecified perspective parochial company-wide tools qualitative quantitative assertion/opinion 7 tools/SQC horse trading 7 new tools politics/pressure experiment design participation narrow/exclusive broad assigned/involuntary welcomed many volunteers tone confrontary cooperative finger pointing constructive defensive behavior domination teamwork words used I/your we/our stress level high/shouting low/laughing attitude chore fun priority low high meetings ad hoc regular attendance >95% personal growth nil significant success status quo improvement + sum zero sum many winners few winners self sacrifice solutions un-owned owned implemented un-implemented RESULTS SPORADIC CONTINUOUS ©1987, 2000 Arthur M. Schneiderman All Rights Reserved. 7/25/87-QIP-19

  21. ADI QIP DEPLOYMENT STATUS August, 1987 Board of Directors Ray Stata Corporate QIP Council Arnie Kanarick Jerry Fishman Graham Sterling Mel Sallen Larry Sullivan Joe Hinchey Ray Stata Art Bill Casey Ron Castonguay Kozo Imai Larry LaFranchi Paul White Schneiderman Warehouse QIP Credit QIP CIS QIP Credit line QIP Vic Sabella Sales/Marketing Bill Manning Dennis Buss Hank Krabbe Jerry Fishman Tom Urwin Sales QIP Isolator strategy QIP On time QIP PLCM QIP Bill Pratt Goodloe Suttler Brian McAloon Tom Urwin Jeff Riskin Jerry Fishman Peter Holloway Ted Dintersmith PPM QIP Industry Marketing QIP Financial QIP ESD QIP Admin QIP PPM QIP Correlation QIP ASIC QIP Cycle time QIP Cycle time QIP EURO QIP On time QIP On time QIP Time to market QIP Yield QIP ©1987, 2000 Arthur M. Schneiderman All Rights Reserved. 8/3/87-QIP-20