Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.
Analog Devices Inc

Part A

  í   "NWIIMMM
Q1. what was ADI’s strategy in the 2”” half of
1 980’s?
- Problems faced in mid 80’s

° Growing inventory
- Increase in defect level of product

* ADI’s strategy in 2"“ half of 8...
On time delivery

Cycle time

Average yield

Defects in products shipped

‘I l Intl:  I’ IH H

Increased from 70% to 96%

...
Q2. Critically evaluate the half life concept in light of
analog devices strategy,  what are the potential benefits and
th...
- Benefits of half- life: 

HALF-LIFE AS A TOOL BENEFIT

Goal setting tool Rational determination of future
performance

D...
increasing I-iaIt-Livesí-o-

MulllPle Product
Organtations Dgyfi-lrfpmgrt, 
C LEÏOfTlÉ-TlVe ndor
Pa rtn-tnng

Cross
Functio...
m '*"“'= °'"*

Rate of decline of defect level is
constant over time

Concept generally deals with (lefects

Defect reduct...
Q3. Identify the conflicts that exist between QIP
measures and that reported by financial systems? 
Which numbers should we ...
The major conflicts between the QIP and the financial
measures are: -

° ADI’s incentive and performance evaluation systems ...
"(Hi “ÍtifÍtÍfilttíiisttrr  713135 ii¿‘i= »iiii; jti; i‘íis% ti? ’ ‘ii’?  1ï’jï; rif; i.tï= .f¡ï? ‘-+i
 ‘arrasan injuria   ...
OScorecard is a blend of financial v/ s non-financial
measures. 

OADl’s corporate scorecard assesses the performance of
t...
New Products

NP introduced Help determine the pace of
NP bookmgs innovation at ADl

NP breakeven
NP peak revenue

Time to...
Q5. Evaluate the management planning & control
systems at ADI during 1990-95 in light of ADI’s
strategy in ls‘ half of l99...
Oln period 1990-95 the emphasis shifted from cost reduction
(QIP) to wealth creation

ONew dynamic measures were introduce...
l "l;   w-éwïagzgtïaia «nïïtili ïíiis» tríttiiitiatiigicti"
n _ ,  ,.  r u‘?  .r— - — A »— .  .-v “:5 '* ‘ti. 

itpi_’iiii...
OCompensation not linked to the performance on the

scorecard , as the perfonnance measures change quickly
owing to the dy...
Q7. describe ADI’s strategy as of 1996. How

should scorecard & other management systems
change in 1996 to best fit the str...
‘-“jiï"n. k'íiïi, "i'hk‘ E“¡ÉÍi’-'i'ï""| *_i_¡ ‘¿i ‘Í-‘Iiïíi igc_lirïrljïiï_ï]lfi‘él“ï  Ïiï‘ 
É-líiahmái ¡«ganancia»!  áit...
Managerial compensation can be linked to EVA. 

FINAN C E
l Growth

2.Growth tlnough old &
new customer

3. EBIT
4. Profit ...
Analog Devices lnc. (B)

 

. ‘.
Q1 . How did ADI’s industry change
between 1996 and 2001

  e   mlmlmmííle
OIntemet era let to a 78 % increase in top line growth
OChange in demand characteristics for ADI’s products

ODisaggregati...
Q2.How are the targets set for
the metrics on the scorecard? 
Who sets them?
O Gradual drift from half life concept as it was only suitable for
weakness based measures

Goal setting process

_ Bottom...
Q3. is adi’s scorecard as useful
today as it was in the 80s?  what
are the limitations to scorecard? 
What can go wrong?
* Not as effective as in 8os
° Change in Business Environment

v Extremely dynamic measures are not included in the
Execut...
Q4.Wou1d you make any
changes to the way adi manages
its scorecard?  What changes? 
why? 

 

.1.
- Metrics should be embedded ¡n EIS 8a not on manual
spreadsheets

- Metrics should be kept flexible
Q5.Does the metrics system have
flaws?  Can employees game the
system?  What are the dangers of
the eis? 

 

A
As employees and the organization get used to the old way of
doing t ings,  new scorecard measures should be introduced
ke...
illik
 l
iïïkl
Upcoming SlideShare
Loading in …5
×

Analog devices case

1,323 views

Published on

nice one

Published in: Education
  • DOWNLOAD THI5 BOOKS INTO AVAILABLE FORMAT (Unlimited) ......................................................................................................................... ......................................................................................................................... Download Full PDF EBOOK here { http://bit.ly/2m6jJ5M } ......................................................................................................................... Download Full EPUB Ebook here { http://bit.ly/2m6jJ5M } ......................................................................................................................... ACCESS WEBSITE for All Ebooks ......................................................................................................................... Download Full PDF EBOOK here { http://bit.ly/2m6jJ5M } ......................................................................................................................... Download EPUB Ebook here { http://bit.ly/2m6jJ5M } ......................................................................................................................... Download doc Ebook here { http://bit.ly/2m6jJ5M } ......................................................................................................................... ......................................................................................................................... ......................................................................................................................... .............. Browse by Genre Available eBooks ......................................................................................................................... Art, Biography, Business, Chick Lit, Children's, Christian, Classics, Comics, Contemporary, Cookbooks, Crime, Ebooks, Fantasy, Fiction, Graphic Novels, Historical Fiction, History, Horror, Humor And Comedy, Manga, Memoir, Music, Mystery, Non Fiction, Paranormal, Philosophy, Poetry, Psychology, Religion, Romance, Science, Science Fiction, Self Help, Suspense, Spirituality, Sports, Thriller, Travel, Young Adult,
       Reply 
    Are you sure you want to  Yes  No
    Your message goes here
  • DOWNLOAD THI5 BOOKS INTO AVAILABLE FORMAT (Unlimited) ......................................................................................................................... ......................................................................................................................... Download Full PDF EBOOK here { http://bit.ly/2m6jJ5M } ......................................................................................................................... Download Full EPUB Ebook here { http://bit.ly/2m6jJ5M } ......................................................................................................................... ACCESS WEBSITE for All Ebooks ......................................................................................................................... Download Full PDF EBOOK here { http://bit.ly/2m6jJ5M } ......................................................................................................................... Download EPUB Ebook here { http://bit.ly/2m6jJ5M } ......................................................................................................................... Download doc Ebook here { http://bit.ly/2m6jJ5M } ......................................................................................................................... ......................................................................................................................... ......................................................................................................................... .............. Browse by Genre Available eBooks ......................................................................................................................... Art, Biography, Business, Chick Lit, Children's, Christian, Classics, Comics, Contemporary, Cookbooks, Crime, Ebooks, Fantasy, Fiction, Graphic Novels, Historical Fiction, History, Horror, Humor And Comedy, Manga, Memoir, Music, Mystery, Non Fiction, Paranormal, Philosophy, Poetry, Psychology, Religion, Romance, Science, Science Fiction, Self Help, Suspense, Spirituality, Sports, Thriller, Travel, Young Adult,
       Reply 
    Are you sure you want to  Yes  No
    Your message goes here
  • DOWNLOAD THI5 BOOKS INTO AVAILABLE FORMAT (Unlimited) ......................................................................................................................... ......................................................................................................................... Download Full PDF EBOOK here { http://bit.ly/2m6jJ5M } ......................................................................................................................... Download Full EPUB Ebook here { http://bit.ly/2m6jJ5M } ......................................................................................................................... ACCESS WEBSITE for All Ebooks ......................................................................................................................... Download Full PDF EBOOK here { http://bit.ly/2m6jJ5M } ......................................................................................................................... Download EPUB Ebook here { http://bit.ly/2m6jJ5M } ......................................................................................................................... Download doc Ebook here { http://bit.ly/2m6jJ5M } ......................................................................................................................... ......................................................................................................................... ......................................................................................................................... .............. Browse by Genre Available eBooks ......................................................................................................................... Art, Biography, Business, Chick Lit, Children's, Christian, Classics, Comics, Contemporary, Cookbooks, Crime, Ebooks, Fantasy, Fiction, Graphic Novels, Historical Fiction, History, Horror, Humor And Comedy, Manga, Memoir, Music, Mystery, Non Fiction, Paranormal, Philosophy, Poetry, Psychology, Religion, Romance, Science, Science Fiction, Self Help, Suspense, Spirituality, Sports, Thriller, Travel, Young Adult,
       Reply 
    Are you sure you want to  Yes  No
    Your message goes here
  • DOWNLOAD THI5 BOOKS INTO AVAILABLE FORMAT (Unlimited) ......................................................................................................................... ......................................................................................................................... Download Full PDF EBOOK here { http://bit.ly/2m6jJ5M } ......................................................................................................................... Download Full EPUB Ebook here { http://bit.ly/2m6jJ5M } ......................................................................................................................... ACCESS WEBSITE for All Ebooks ......................................................................................................................... Download Full PDF EBOOK here { http://bit.ly/2m6jJ5M } ......................................................................................................................... Download EPUB Ebook here { http://bit.ly/2m6jJ5M } ......................................................................................................................... Download doc Ebook here { http://bit.ly/2m6jJ5M } ......................................................................................................................... ......................................................................................................................... ......................................................................................................................... .............. Browse by Genre Available eBooks ......................................................................................................................... Art, Biography, Business, Chick Lit, Children's, Christian, Classics, Comics, Contemporary, Cookbooks, Crime, Ebooks, Fantasy, Fiction, Graphic Novels, Historical Fiction, History, Horror, Humor And Comedy, Manga, Memoir, Music, Mystery, Non Fiction, Paranormal, Philosophy, Poetry, Psychology, Religion, Romance, Science, Science Fiction, Self Help, Suspense, Spirituality, Sports, Thriller, Travel, Young Adult,
       Reply 
    Are you sure you want to  Yes  No
    Your message goes here
  • DOWNLOAD THI5 BOOKS INTO AVAILABLE FORMAT (Unlimited) ......................................................................................................................... ......................................................................................................................... Download Full PDF EBOOK here { http://bit.ly/2m6jJ5M } ......................................................................................................................... Download Full EPUB Ebook here { http://bit.ly/2m6jJ5M } ......................................................................................................................... ACCESS WEBSITE for All Ebooks ......................................................................................................................... Download Full PDF EBOOK here { http://bit.ly/2m6jJ5M } ......................................................................................................................... Download EPUB Ebook here { http://bit.ly/2m6jJ5M } ......................................................................................................................... Download doc Ebook here { http://bit.ly/2m6jJ5M } ......................................................................................................................... ......................................................................................................................... ......................................................................................................................... .............. Browse by Genre Available eBooks ......................................................................................................................... Art, Biography, Business, Chick Lit, Children's, Christian, Classics, Comics, Contemporary, Cookbooks, Crime, Ebooks, Fantasy, Fiction, Graphic Novels, Historical Fiction, History, Horror, Humor And Comedy, Manga, Memoir, Music, Mystery, Non Fiction, Paranormal, Philosophy, Poetry, Psychology, Religion, Romance, Science, Science Fiction, Self Help, Suspense, Spirituality, Sports, Thriller, Travel, Young Adult,
       Reply 
    Are you sure you want to  Yes  No
    Your message goes here
  • Be the first to like this

Analog devices case

  1. 1. Analog Devices Inc Part A í "NWIIMMM
  2. 2. Q1. what was ADI’s strategy in the 2”” half of 1 980’s?
  3. 3. - Problems faced in mid 80’s ° Growing inventory - Increase in defect level of product * ADI’s strategy in 2"“ half of 80’s ° Emphasis on quality ° QlP : Half-life by implementing TQM ° Scorecard Plan Act Check Do
  4. 4. On time delivery Cycle time Average yield Defects in products shipped ‘I l Intl: I’ IH H Increased from 70% to 96% Decreased from 15 weeks to 8 ‘ weeks Increased from 26% to 51% Decreased from SOOPPM to 50 PPM
  5. 5. Q2. Critically evaluate the half life concept in light of analog devices strategy, what are the potential benefits and the limitations of the half life concept, how would a company develop half life for different processes, how is the half life concept different from the experience curve concept?
  6. 6. - Benefits of half- life: HALF-LIFE AS A TOOL BENEFIT Goal setting tool Rational determination of future performance Diagnostic tool Benchmarking improvement efforts against best practice for processes of similar complexity Measure of organizational learning To make comparisons with alternative methodologies. ° Limitations of half life concept - Difficult to determine half life as it is dependent on technical and organizational com plexities - Calculated based on historical data which may not give a very clear picture
  7. 7. increasing I-iaIt-Livesí-o- MulllPle Product Organtations Dgyfi-lrfpmgrt, C LEÏOfTlÉ-TlVe ndor Pa rtn-tnng Cross Functional increasing Half—Lives—> organizational complexity Single Function EN“ Simple Complex Technical complexity Estimated Half-Lives
  8. 8. m '*"“'= °'"* Rate of decline of defect level is constant over time Concept generally deals with (lefects Defect reduction owing to a root cause being eliminated and subseqtient tackling of the next root cause With doubling of ctumilative experience the unit cost drops by a constant percentage Concept generally cieals Will) cost (‘ost reduction twwing to the same action being performed repeatedly
  9. 9. Q3. Identify the conflicts that exist between QIP measures and that reported by financial systems? Which numbers should we believe ? Can they be reconciled ?
  10. 10. The major conflicts between the QIP and the financial measures are: - ° ADI’s incentive and performance evaluation systems were based on the financial measures only ' QlP measures emphasized on the cost reduction whereas the financial measures were more inclined towards revenue enhancement - QIP measures were more useful for evaluatíng the performance of the cost centers whereas financial measures could more effectively capture the performance of the profit centers ° QIP measures were not given much importance as these are mere avenues to achieve higher financial measures
  11. 11. "(Hi “ÍtifÍtÍfilttíiisttrr 713135 ii¿‘i= »iiii; jti; i‘íis% ti? ’ ‘ii’? 1ï’jï; rif; i.tï= .f¡ï? ‘-+i ‘arrasan injuria ti: éiïisfttfiifsé‘ Ïááïfiuylïl rm áit: ¿iiaiá5‘ri= i;: :ir= iitiaiir? ‘¡‘¿i}illï€ÏlJï! tilïllili’ ïiI? = rïaiátiitií . Mwmam%iüñmmmaramenmwmmnmu ¿in? inn. i'á+ié"-
  12. 12. OScorecard is a blend of financial v/ s non-financial measures. OADl’s corporate scorecard assesses the performance of the company on Financial, New products and QIP measures by comparing targeted value with the actual value. ORole of each measure: - Financial Revenue Help determine the financial performance ofa company and also ReVelwe Gmwfl‘ how effective! assets are em lo ed Y P Y Profit ROA
  13. 13. New Products NP introduced Help determine the pace of NP bookmgs innovation at ADl NP breakeven NP peak revenue Time to market QIP On time delivery Help measure the Operational Cyde t¡me and human resource effectiveness of ADl Yield Defects Employee productivity Turnover v Non-financial measures are used at low levels for task control = Financial measures are used at high levels for management control
  14. 14. Q5. Evaluate the management planning & control systems at ADI during 1990-95 in light of ADI’s strategy in ls‘ half of l990’s
  15. 15. Oln period 1990-95 the emphasis shifted from cost reduction (QIP) to wealth creation ONew dynamic measures were introduces to measure performance OHoshin became a guiding philosophy OC omplementing ADI’s scorecard, key success factors were introduced to measure milestones related to companies business plans ONew planning system was introduced where planning was done by teams rather than being done centrally
  16. 16. l "l; w-éwïagzgtïaia «nïïtili ïíiis» tríttiiitiatiigicti" n _ , ,. r u‘? .r— - — A »— . .-v “:5 '* ‘ti. itpi_’iiii; _ivisjietrrvrti! ‘ ÍJÏ i! Fl? ’
  17. 17. OCompensation not linked to the performance on the scorecard , as the perfonnance measures change quickly owing to the dynamic environment OSenior management compensation was based on stock price performance OF or all other employees compensation linked to revenue and the operating profit 0Hence, individual performances were not appreciated OSo we do not agree with the compensation philosophy.
  18. 18. Q7. describe ADI’s strategy as of 1996. How should scorecard & other management systems change in 1996 to best fit the strategic needs of the company?
  19. 19. ‘-“jiï"n. k'íiïi, "i'hk‘ E“¡ÉÍi’-'i'ï""| *_i_¡ ‘¿i ‘Í-‘Iiïíi igc_lirïrljïiï_ï]lfi‘él“ï Ïiï‘ É-líiahmái ¡«ganancia»! áitlií; ‘uuu-sunny. tn-‘rzrmgq; ia¡a; a_n'ag= ,iï€tgai ¿ÏÍÏÉIÍÏ-¿Ïïlïi in; mi. ” Iv’ ¡aeprkgjáiïi i"nr. -iuia, gprveiviviiii aipigirzwiïaanlïiïiar ¡is-Ir art-fixam iaaritali= sfïginrai| plïéï-ïïiï-Ïï-filúii¡‘#45 L. ;'_(é3¡fáfi¿(; :. ¿Listar ï_itif= _ii= rit’n_niní:9_li*él¿áy" {igtyisjiais Ïilivlf“tÉlun'! ï" '9_AI'f»? ‘fI4ÍÍ! J_Ï; ïÏ. -"“
  20. 20. Managerial compensation can be linked to EVA. FINAN C E l Growth 2.Growth tlnough old & new customer 3. EBIT 4. Profit margin C US T OMER l. Non- confonnities 2.Adhoc-requests 3. Customized solution 4. Customer satisfactioxl 5. Operating result ADI inc. LEARNIN G IN T ERNAL PROCESS . . l. Trannng l. Contractual conflicts. 2. Deviation from budget. 3. Update web report. 4. Procurement 2. Employee development 3. Personal ttunover. 4. Customer base
  21. 21. Analog Devices lnc. (B) . ‘.
  22. 22. Q1 . How did ADI’s industry change between 1996 and 2001 e mlmlmmííle
  23. 23. OIntemet era let to a 78 % increase in top line growth OChange in demand characteristics for ADI’s products ODisaggregation of the supply chain OOperators of chip fabrícation OGloba| component distribution OContract equipment manufacturers OTradition distinction between analog and digital market was increasingly becoming blur OGreater collaboration required in the product design process OReduce product life cycle;
  24. 24. Q2.How are the targets set for the metrics on the scorecard? Who sets them?
  25. 25. O Gradual drift from half life concept as it was only suitable for weakness based measures Goal setting process _ Bottom up Divisions prepare the plans which are approved by the senior management, based on the plan post consultation with both the parties goals are assigned Top down Senior management assigns goals to the lower rang managers O Cross Functional Team sets the targets.
  26. 26. Q3. is adi’s scorecard as useful today as it was in the 80s? what are the limitations to scorecard? What can go wrong?
  27. 27. * Not as effective as in 8os ° Change in Business Environment v Extremely dynamic measures are not included in the Executive information system and are captured through spreadsheets i‘ Presence of too many measures make them less relevant as actionable information = The Scorecard was not linked with the employee compensation
  28. 28. Q4.Wou1d you make any changes to the way adi manages its scorecard? What changes? why? .1.
  29. 29. - Metrics should be embedded ¡n EIS 8a not on manual spreadsheets - Metrics should be kept flexible
  30. 30. Q5.Does the metrics system have flaws? Can employees game the system? What are the dangers of the eis? A
  31. 31. As employees and the organization get used to the old way of doing t ings, new scorecard measures should be introduced keeping in mind the Dynamic nature of the semiconductor market Time required to implement the project Dangers ofEIS O Ubiquity of information-Presence ofto_o many measures make them less relevant as actionable information O Benefits hard to quantify O High implementation costs 0 System may become slow, large, and hard to manage
  32. 32. illik l iïïkl

×