7/24/2019 integron1

1/19

lntegron

lncorporoted

Dcvic

Uplon,

Micheilelorror-d ond

Lourie

Thomosi

The lntegroted

Components

Division

(lCD)

L,alr Llovd, r'ice

president

of the

lntegrateci

Ccimporlents

l)iuslon

I( D tif lntegrorr

Inc., pondered

over

his computer

as

tre

put

toaether

hi.

iliclei

summirrizins

the Lrenchmarking

stuclr,receutlv

cornpleted

fbr

his

ritr'h Lurlcashccl

Nlultichip

N{odulc

(NICNI)

rnirnr-tfhcturing

orsanizrttiotr.

In.fantralr-I )9,1-trr'o

nronths

prcviousl.,,-Jris

division

had assurtrcd

firll

1tr,

rf-rr

ancl loss

resportsibilitr.

f

7/24/2019 integron1

2/19

Port

3 Doto

Goihering,

Anolysis,

ond Engogemeni

Monogemenl

in

the

f.ture?

The

MCM

market

\,vas

in

irs

infanq,,

and

the

srate

o{'competitors

hacl

bv no

means

stabilized.

Ind,stry

experts

seemed

,nable

ro

agree

on

an

outlook;

credible

prediclions

ransed

fr.m

explosive

srowth to complete

clissol,tion.

Lloyd

r'r'orried

that

focusing

on

a

goal

based

on

current

standarcls

rnisht

leave

them

behind

in

this

fast-pacecl,

capricious

inclustrrr

2.

Horv

should ICD

focr rs

its

marketing

strarep;,?

The

NTCNI

market

cornprised

se'eral

diverse

segments,

and

foc.sing

on the

devel-

opment

of onc

set

of

capabilities

misht

preclucle

ICD

from

serr.

ing

other

seg-tnents

as

r,r,ell

as thev

coulcl

in

the future.

3.

Sh

7/24/2019 integron1

3/19

Cose 3.2 lntegron

lncorporoted

.

ic.1 r

t11)

to clelelop

tr

prodrrct. \\hile

eiicth

ne\\:

product

\v:ts

a

,,1

.r,-1;r11

v1l1lzed

(lesiqn,

its

teclrnical

char-actct-istics

(lid

trotchan{.lc

rr',i(

r irg

Pl-oductioll.

A nerr,

I)roducl

rllight

be

pro(hlccd lbr

r.elirs

'L-

ir:lillc2lnt

rnoclification.

S(),

parildoxicall\,,

r,vitilc

the

cler.clop-

.r

,.r1r

ielt

pressllre

to

l)c

agile

ancl

responsin'c, ntarrufhrlurz)zgar

tlre

rr

L.rlLr

Iacilitr'\\,ns

orsanizecl {or

l-ria'h-r

ulrrrriers

u.il.h

clcdicaterl

lirre

s

rrt

r,

ih

specializccl r,r,orklirrcc.

Stonding

AIone

fi

.,,c late

1980s,

business

rrrrits

u,ithin Integron

kneu,

ttrerv l.oulcl

,,

htcotttc

inclepenclent

:urcl stalt

to

Ilncl

cxtern;r1

sources

ol

busi-

.,

Ir

l )87,

Hcnrr,DornLrers,

lnr.egron's

CE(), let it lter

knorvn

that tl-re

-'r-.

r-,,1c1

companv

could no longcr

bc m:rnagecl

as a hierarcirical

r r:r-' ih.

His

goal

\\:lts

t()

clccentralize

clccisiorr

rnaking

so thzLt

()pcr:1t-

r-< iiri.

\

tclt

solcir.responsiblc

lor settins

str2ll.egic

clircctiol, imple-

r:r.:nti1ri

('()llpctitivc

initiatir.es.:rrld

tnceting

financial

hurdle

rates.

-',:lr,

rriglr

L)ornbcr-s

clicl not

spccil\ requirccl

hrrrclle

ratcs

publiclr-.

trnit

l.in.igcr-i

kncrv

tirer rtoulcl

be helct

lcsponsible [or atraining

aggr-essire

irnarrcial

r'esults

r

er-r,

quicklr,.

\\-ith

the

chill

u,inds

ol

chanse

bloh.ing througir

the

conrpirnr,.

ICll)

iltiti:rtecl

scrc't':rl

improvt'rncnt

pl'()e-r:uns

in

un cffirrt

to

bcconte rriore

r'()tllpetiti\ e itt

t]-rc

cxternal utarke

t.

(lontirruous

qualitr

improvernerrt

lracl

long

brcn

a

ccntral theme

at lClD.

Inrleccl,

the

brrsincss

rrnir urrs

pr,rr-t

ol

a

gr'()Llll

rr,inning

t.lie

prestiuiorrs SkinncrAv:rrcll

1br

Chr:rlitr

in

1 ) )3.

NIo:t

L'nri)lovees

in

thc

plant

rlelc rnenrbcrs

of

at lcirst

one

clr-ralitr-

team.

IttJarttralr

l ) )+.

t(lD

nas lirrmzrllr,coru'crtccl

fiorn

ir

cr()st center

to

tl

Plofit

center'. \t

the

time o{'tire

Lrenchnrarkins

stlrd\,,

thc fledgling

rriar-

keting dep:tt

trnernt

u.as

six rleeks

o1cl.

ancl

the unit stil1

lackccl

a

(le(lic:rlcd

sales

lorce.

Nerv

nrarketine

per-sonnel

t,erc \{restlilrg u'ith

novel

:rncl

unlarlili:rr

issur:s strch

as

billina

policr,,

pr-ic:inu,

segn)entation

analr,sis,

and

sales

striitcgies for

cxternlrl

crLlst.omcrs"

rlost.

o1-

u,horl

rr'ere

original

eqlripnient rnirntrfactrir-ers

(OE,\Is),

'I'iiis

neu. rcsponsibilitv

c:1me

to

I(lD

at

a

\.el'\,

clifficrrlt

timc. Fir.st,

thc

hvblicl

inte3-r'atccl

cirr:irits

pr'oclucr 1ine.

the nta.jorin

of I(lD's

rc\rc.nucs,

\\'iIS

re.t(

irittg

rriaturitr'. Thcse

procluc[s

u'e

rc userl

br

tc]ccornrnrinications

cust()1rrcl'\-prirnarih

2l

cirptir'e rna|ket.

'['hc

or-er':rll

market

\\r:is

pl.o-

-jectccl

I1)

g1'o\\:

rlt

just

.1-'.%

per

t,ear,

artrl

I-lor-ci

knerv

iris

lntegron

cus-

tonlct:

r\et'e

st:trting

to seek.)ilt

extet.nal

suppliers

in sear.ch

of a

bet.ter

pricr'

,

'i

gilcu

iet'els

of

per'liilrnancc.

,\clclitior-rirllr',

the rrrost

prorrrisine

grcN.-l

.i|eu.

the

erncrqing

rrrultichip

tllorhrle

rnat.ket,

\\'2rs s() neu,that

it

\\'rts

-r.

,rtishinglv

ditficult

to

predict

ho.n

lalge

ii

u,oul

7/24/2019 integron1

4/19

Mulrichi

Modules

166

Port

3

Doio

Goihering,

Anolysis,

ond Engogemeni

Monogemenl

A rn,ltichip rn,dule

(M(ll.l)

consisted

of

se'eral

microelectronic

cornponents

bondcd

onto a

comrnon

substrate.

A

module

began

lif-e

as a

substrate

or.rto lvhich

conductive

rnaterial

\\'as patterned

to form

circuit

intelconnections.

Different

combinations

of

integratecl

circuits

or

clrips.

placecl

on

tire

subsrrate

formed

a hybrid

circuit

that

was

capable

of

perfbnning

more

complex

fur-rctions

than

rvould

be

practicable

on

a

single

chip.

The N'ICNI

itself

consisted

of

several

lavers

oI

hvbrid

inte-

gratecl

circuits

sep:rr':rted

bv

ir thin-film

polyrner.

The

module

incorpo-

rated

passive

colnpotlents,

such

as

resistors

and

capacitors,

which

pror,icled

ir

\\,ith functionirlitv

bei.ond

th:rt

of existins

inLesrared

circuits.

NtlcN{s

provided

cost-effecti'e,

cLlstom

solutions

for

technically

advancerd

applications

requiring

hieh

speecls

in

space-constrained

systems.

Flolvever,

as

speed

requirernents increased,

the

density

of

elec-

tricai

cornponents

on the N,ICN{s

had

also

increasecl,

causing

routing

probiems

that

rnanifested

themselves

as

siqnal delays

and

interference

on the

circuit.

Thcre

nere

three

basic

substrate

tvpes,

which

distinguisrrecr

the vari-

ous

\{ClN{

families:

MCN,I-C

(Cieramic),

MCM-L

(Laminate)

anrl

MCM-D

(Diclech-ic).

Each

familv

o1 N,ICNI

varied

in

rerns

of

the

solutions

it

ofI'erecl.

N'icM-cs

were based

on a

thick-filrn

technologl.substrate.

The

MCN{-L technoloe-1 r,as

similar

to

surface

lnollnr

techrorogl (sNIT),

in

that

it

achieved

high

densities

anrl

rvas

the

cheapest

r,

produce.

Finall1.,

the

x'ICli\I-D

technolog.v

was thc

most

technicallr

acllancecl

of the

three

product n'pes.

Bursed

on

:r thin-fiirn

technologr. snbstlate,

it

lvas

excellent

for

ror-rting

nnd

densit-v

problems.

MCN{-Ds

rrere

als.

capable of

',orking

at verv

higli

freq

r-rencies,

currently

those

above

1

00

\IHz,

as

cornpared

to

printecl

circuit

boards.

ivhich

u.ere

limited

to

applications

belou,50

NIHz.

ICD

ofl'ered

proclucts

in

the

N{cN{-D

ciass and

u-as

also

u,orking

on

an

acivanced

technologr.proclr-rct

in

the

MCN{-D

categon,that

u,oulcl

enable

it

to ofI'er

a nrtrch

lorvcr-cost

dielectric

solution.

Producl

Reolizotion

The

creratio,

of

multichip

rlodrrles

at

ICD

\l-as a

process

character-

ized

by hear.r,

early

interacticin

betrveen

the

custonrer-

ancl

ICD

appli-

catior-rs

enginccrs

zrnd

desisners.

Prior

to

the

.rcttral

bid,

a

team

cornprisine'

clrstotner

engineers

ancl

ICD

per-ronnel

cleterminecl

u'hether

there

r'r,as

a

technicai

match rrnd

whetl-rer

I(lD

had

the

opera-

tional

capabilities

to nteet

necess:ir\

lead

tin'rc.

r,rr.rd

produce

the

requirecl

r,oiumes.

Next,

the

custotners

and ICD

7/24/2019 integron1

5/19

Cc:se

3.2

lntegron

lncorporoted

specific:rtions

1t,as

acknorvledged

1:1.

3

1r.,r211 ac cePtancc:

le

tter. Th

is

s telr

et)sured tlurt

all

teanl

mcrnbers haci

clciuly'laicl

out their

rJc,signs

ancl

Pro(luct

critcria. The

tearlr Lhen

eml);{l'kecl o1l

z1

lrrotot\?ins

pl occss to

builct ancl

test. thc

nroclcls

a.ncl

prototype batches.

Throtrghout

this

Ilrocess,

(ktrolvu

to

all

as

the

product

realizatiolr

process,

PI{t}),

arduou.s

fiurctional

tcstinq u,as

done to

simtrlate

the lot

in

ltrli

proclrrction

rtith

thc

highcst

possible

fidclity The

crrsronlers

cl:eckccl

rhc

clesisu of

the

sample

procluct

f-or

thcir

application

irfter- tlri.s hrst

group

of

urodels

hacl

l:een

built

ilnd testecl

r'r'ithin

ICID.

TIris

step

u,zrs

ckrctrlnentcd

u.ith a

cus*

tortter

r:roclel

acceptance

letter. The

per:icld

{i-orn

rhc ol'iq-iniil

rlesign

accept?illce lett.er

until

the

rnoclel

acceptiurce lettet \\,as

I'Picall1,

fbur

\,rrecks.

Dtu'ing

the

fir-ral 10 rveek

pltasc bef,orc

volurue proclrrction,

the clcsic*n

te2lnr

built

an

engineering

1>ilot

hatcir,

rrslrally

a

groui)

of

10

to

?0

mocl-

ules

thtrt

the ctrstonrer

tvould

trse

in

his

or

her riesign

proccss

(rather-

thatr

situpl1,

check

fi>r

functionality).

Tliis prc)cess

ltas

sirnilar

to

thc

model

ltrocess.

I)esi.gn cJ:;lng'cs

\t,erc iti:or-prl'atcd

ancl the mirutr|actrlr'-

ir-rg

process

rA/as

ftrlh,tlot:umentecl

to

facilitate r:oltrme

produc{.ion.

A{ter

corlpletiotr

of

the

lot, the cnstor-ner

irg;rin

signecl olf

rvitlr

:r

prodtrc{.

acceptlillce

lcttet',

indicating

that

she

or-

he

r.r'as

reacly

to bcgin

vohrrtre

procluction

(see

Exhihit

3.1).

Velerffixe

Froduefiem

T'he volrrme

prodtrction

process at

ICD l:egzur

rr,ith

ei(her-a

flbrccastecl

or-cler',

gene:'atecl

in

anticipatiou

of il

$,irr,

or n'ith a halcl

order.

z\fter'

the

orcler-\\ItIs

enterecl

into

the

s1'sterrr,

thc

rrxltcriarl

ftir

Lhe

strbstrate

u,:rs

cudcrec l.

The

lezrd

tirne to

receive tlre silicon

l\rls

16

neek.s-ir

bottlerrcck

for

thc

entirc

llrocess.

The

rnaster schechrling

s)'sterlt

ctreclied

firr

bill

ol''

tnater:ial

availabilit),

8trrl

cak:rtlatcd

availablc

capacitv

in the

factorV. If

t-t-tateri:rl

irtrd

ca 1lilcit1,

rvere

ar,:rilal:le,

tlie

st'steru

autont;lticallr,

sr:ltecluk:cl

t.he

builcl rvithout

the

interventiorr,oft a

plzrrrner-.

Once schccluled,

a

r

ollte

c:rrcl ancl

shop order

\r,erc creatcd

irncl clis-

i:atched

to

the first

step

of

thc

rnarrnlhcturing

prc)ccss.

A

stroug

ru'tion

insrairted

custotr-:rnd1:r'acticr:

dictiitccl

rrery specific

rolcs

fbr

eaclr

oper:

irtor; nccessitating

a stal:le

o{'material

haurllcrs,

displitclrers,

ancl

regrr-

lar

olterzltol's.

Iiach operator

carelirllv

docullentcd,

on

the rotite

carcl,

his

or

lrer

coutribtrtion

to the

l]l'ocess

and

urovert

the

lot

thrr:ugh

the

linc.

At

the

encl

of

ttre

process,

thc

i:ar-ts

lr,ere cnterecl r,ia

a

b:u'

cocle

reacler into the

on-line

trircking sys(em,

and inpr ocess

vield

l

7/24/2019 integron1

6/19

Port

3 Doto Gothering,

Anolysis,

ond

Engogement

Monogement

ldentify

Customer

Opporlunitv

lnitial

Customer

Opportunity

Evaluation/

r^hhi^al tr.r^h'

/eio\

&

Letter Drawn

UD

Certify FitnessJotruse

Circuit Layout

Design

& Component

[,4apping

Electrical

Test

Spec.

Compatibility

Assessment

Bedes

gn

as

Needed

48 Hour Technica

Debug

Process

Tesl N/odel

Evaluation

7/24/2019 integron1

7/19

Cose

3.2

Iniegron

lncorporoted

'-'ilr-o(hr(t

t\-pe

\,v()uld

bc

procrtrccd

o,

trre

s.nre

ri.e.

ICL),s

)

\\e

.e

srlrc

tllis

la'.ut

*ri.lcl

herlp

r-eclucc

r,:inrrfnctr.-ina

leacl-

r

'

r

rrc.erLse

flcxibilin'

to

r,.lrrrne

ricr.a,ds

:r.d

desisn

.t,",rg.r.

'

-ire.

1b.

specialt'

procructs,

rvas

schecr.recr

firr

cornprction

i,

',,J

,

.e

e

Exlribit

.,1.2).

Forecast

Beceived

Forecast

Entered

into

EPPS

by

Customer

Service

I\,4aterial

Planners

Stars

Custom

Silicon

buy

i\,4/S

System

(AtvlAPS)

Checks

BOM

&

Capacity

Availability

lf Forecast

System

Directiy

Schedules

Build

Shop

Order

&

Bouter

Created

Shop

Order

&

Fate

Card

(Dispatcher

Starts

Process)

initiates

t

10 Produ(

yvrth

Su

i,lanufactul

loute

Card

ilon:

Picks

lstrate

to

inq 1

st

Step

lni ates

Sl

CSLO'

Proqra

rop

Order

Tracker

m

(in)

SK

)reroom

Electror

)

Stage

Recetves

ic Pick

to BOI\,,1

Production

Process

Occurs

Packaging

&

Shipping

Occurs

Adjacent

to Production

Existing

lnternol

Volume

Production

process

Not

Sufficient

or

)w

Order

7/24/2019 integron1

8/19

Port

3

Doto

Gothering,

Anolysis,

ond

Engogement

Monogement

The

Morket

for

Mulrichi

Modules

N'Iarket

fbrecasts

fbr

multichip

rnocrules

rvere

{iustratirrgly

r,aried

and

uncertairr.

orrc iridustry

research

organization,

Dzltaquest,

estimated

the

currcnt

marker

at

$300

million

and

expected

it

to

grow

to

$1g

billion

bv

the

ye:rr 2000.

Hou,e'er,

these

market

size

estimates

hacl

bee'

de

creasing

srrbstarrtiallrr

e\:ery

r,'ear. Dataquest

also

estimated

tl.tat

Z07o

of all

chipi

r'r'oulcl

be solci

as

part of

a rnr-rltichip

modr.rle

by that

time.

The

federal

govcrnmellt

was

supporting

the

growth

of

the

market

b,v

deemirre

it

a

critical

te chnoioer.'.

and

in late

l993,

it

appropriated

$70

million

in

ftmd-

i.g

frorn

the

Dcferrse

Adr,a.ced

Reseirrch

projects

Auency (DARPA).

There

rernained,

holer,er,

other

industry

obscrvers

r,l,ith

]ess

optimistic

viervs.

Thcv

believecl

that

rnultichip

moclules

r,l.ould

be confinecl

to small

nichcs,

bccarrse

crlrrenr

single-chip

packaging

techniques

couplecl

with

hrrther

shrinking

of

traditioniri

microprocessors

nould

offer

the

rnost

cost-effectirre

tcchnical

sohrti

on.

Not

.niv

wirs

the

overall

gron,th

of'

the

multichip

moclule

rnarket

urrcertain"

but

the relrfiit.te

gronth

of

each

of the

hishly

diverse

se{rments

u,as

also

cliflicult to

predict.

There

rvere

thrce

primary

market

segments:

personal

computer.s,

.wircless,

and

automirted

test

equiprnent.

Personsl

computers

&

workstofions

ICD

projected

rhis

segme.t

u,oulcl

srou,

frorn

about

$70

million

in

1993

ro ahorrr

$1.1

biliion

in

1995.

Altho,gh

it

*'as

the largcst

single

segme,t,

it u,o.ld

most

likcly

ha'e

the

t.ost

st.ringcnt

cornpetiti'e

requirernents.

Procl.ct

life

cycles

tverc

'e'y

hort.

custcimers

dernancled

fast

prototvpins

abilities,

and

cost

pressures

$'ere

tremendous.

Also,

most

cllrrent

rnultichip

moclule

competitors

$'ere

focusecl

cln this

segment.

ICD

hacl

{bcused

on

the

high-encl

rvork-

stirtion

portior-r

of

this

segment

ir-r

order

to ler,erage

its

leading-edge

techr-rologl

capabilities,

but

rnanirgers

\\rere

certain

of

thc

n.l"d

t,,

derr:lop

a

ne\\',

cheape'

tech.ologv

to .emai^

a

co.tcnder

in

this

segmellt.

wireless

Inter,al

projectio.s

estir,ated

this

segment

r'ould

qrorv

[i'om

irbo.t

$40

rnillion

in

1993

to

g280

millio,

bl,

1g95.

This

segnie't

currentll

hacl

longer

procluct

lif'e

cl.cles

than

tire

pcl

market,

ur-rd

tlr.

required

prod.rctiorr

runs

were

also longer.

Horver.er,

the

rvireless

market

ru:rs

lacing

t.oush

cost

pressures

and

u.as moving

to

the

Lrse

of

,,platfbrm,,

prochrcts-birse

prodncl.s

that

coulcl

be

urodified

or

uperaded

over

dmc

u'ithout

:r full-scalc

redesign.

To

compete

in

this

seg:ment,

ICD

might

have

to rcoricnt

its

rvhole

"custom-clesien"

process

to shift

from

100%

cust()11

to

a

much

more

incremental

approach.

Aulom,,ted

Test Equipmenr

and

rnsrrumentqtion

(ATE)

The

tar-

geted

areas

o1'the

ArE

market

includecl

vision

sr,srenrs.

irieh-speed

instm-mclrts.

integratecl

circuit

testers,

and

circuit

bo:rrci

testers.

This

marker

was expectcd

to

grorv

fiom

$28

million

in 1993

to

s72

millior-r

bv

19g5.

7/24/2019 integron1

9/19

Cose

3.2

lntegron

lncorPoroied

, r---.:, rechnical

requirements

ill this

segrnent

{itted

u,ell

with

lCl)'s

l,,i-L-)

technolog)'.

ICID

had alreadv

ilcql.lirecl

a

Prcsl.igiot.ts

cxt.ernai

cus-

,..r

ur

ihis

segmeltt,

rrnd

scveral

o[hers

\{cre

in the

pipeliuc'

Bccrrr-tse

the

ntrrltichip

lnoclulc

tnarket

\\'21s

so

ne\\',

irrld

nright

off'er

r-

..c

,qrorrth

possibilities,

a

rallgc

of

clif

rent

types

of

competitor

ha(l

t

ttl .rttL:tcteci,

each

trying

to capttlre

a

piece

of

thel

market'

Vertically

inlegrated

syslems

comPsnies

lnteqron

\vas

a nlenlber

,i

tltis

category

alons

u,ith

comPanies

sr.lch

as

IBX'I,

AI&T;

Fujitstr,

and

DEC..

These companies

originallv

der,eloped

n-rultichip

moclllle

exPel:

risc

ro solve

internal

technical

challenges

ancl

rvcre

nory

lqoking

for

r\rern:il

conll)terci2rl

opportunities

to

leveraElc

thcir

tcchnical

abilities.

Each

of

thesc

flnr-rs

hacl substanti?rl

ir)ternai

clematrd

th:rL

collid

sttstllirl

ihe ttr

tht'orrgh

e:rr11',

uncert:rin

externirl

mat'kct

dcYelopments'

Hor'r'ever'

theit'

specifii

rnarket

approach

tactics

\verc

beginnitls

[rl

diverger.

IBNL

,\T&T

ancl

lntesron

had

kept

N,ICM

capi,rbilities

in-hor-rsc,

but

recentlY,

DECI

hacl

clitesterl

its capabilities

intc'r an

ilidepenclent

contprurr.

\'[icro

\lociule

Sr,stems

(MN'IS)

.

Technological

compelifors

Poterltizrl

compctitors

in

this

groltp

inclrrclecl

Cvpress

Semiconcluctor,

I'Iotorola,

Hirrris

Sermicotrdr.rctotr,

Pacific

\{icroelectronics,

zrnd

'fexas

Instt'tur-rents.

These

plavers

com-

pered

primaril_v

throush

their

abilities

rvith

tlror-rolithic

silicon.

but sonle

rret'e

ernterins

rhe

N'IC\I

mirrket.

The

rn:rrket\\'as

tlttracti\rc

to

these

com-

llllties

19t orilv

as a

S()urce

of

grc-rrvth

but

alst,

irs

lln

oPllortunitv

to

ril'['set

the

cornmc,clitizatign

of their

core

prgducts.

N'

an1'

gf

them

hopeci

NI(l\ls

rlrlrlcl

pror.icle

price

premiums

and

opPortunities

to

difl-erentiate

on the

brisis

of'perfornlance

and

service.

\{hile

these

compeLitors

did

have

C\perrise

in packauing

rnr-tltiple

chips in

one

unit,

most

did

trot

vet

have

the capabilitics

to

integrate

prtssive

conlllorlents

(individual

componcnt.s

rh21t

enablccl

increasecl

firnctionalitl'

o1'\'lClN[s,

sucit

:rs

capacitors

al)(l

cliocles)

into prodgcts

r,r,ith6nt

the

assistancc

of

OENIs.

These

conrpeti-

rors

had

.t..ri-rg

rclationships

rr.ith

potential

\"ICI'I

customers

thrortsh

their

other

product

o{I'erings.

Several

of

thenl

\\''ere

beginlrins

to

u'ork

u.ith

OEN{s

to

build

requisite

skills.

Conlrscl

c,ssembly

houses

(iompanies

in this

segnlent

inchtdc

7/24/2019 integron1

10/19

Port

3 Doio

Gothering,

Anolysis,

ond

Engogement

Monogement

lzrrger

companies'

ensineers.

Ho,r,vever,

with

the

crevelopment

of thirci-

party

softlvare-suites

of

standarcl

design

tools,

contract

assemblers

were

expected

to acquire

desisn

capabilities

quickly.

In

ad.dition,

the Micro-

electronics

and

cornputer

Consortiuur

was clevekrpinu

industrr-rvide

standards.

If

these

competitors

o\-ercarne

their

current

obstacles,

thel,

u,ould

be in

an

excellent

competitive

position,

because

end

users

\,vanted

the

flexibilitv

to

,se

diff-erent

companies'

chips

in

any

given

clesign.

Withi,

these

cornpetiti'e

segments,

the specific

players

$,ere not

solidlv

establishecl

a,d

changed

fionr

rveek

to lveek.

At

the

tirne

of

the

benchmarking

stuch',

several

cornpanies

had

exited

the

m,rtichip

mocl-

ule

market

lr,hile

a

number

of

others

r,r,ere

just

entering.

Industrv

expert.s

believed

that

the

u,innins

competitors

rvoulcl

be those

lr,ho

had

the

most

llnancial

sta,vins

po\,\,er

ancl

who

ber upon

the right

technological

option:

either

high-end,

technically

complex

proclucts

or

chcaper,

standardized

proclucts.

It

seerned

to Llo,vd

thaL

evervone

was simplv

garn-

bling

on their

best hunch.

The

Problem

Gambling,

according

to Llor,d,

\{as

not

soocl

enoush

for

his

manr,rf-ac-

turing

orgirniz:rtion,

and

so

he

u,as

determined

to clevelop

abilities

across

a broarl

front

to cover

all of

the

perssibilities.

I-lo,vd

k.er^,

ICD

had

to

becor.e

externallv

competitive

in

order

to

grorv, arrd

the

organization

had

developed

a

to

do list

to

help

boost

irs

abilities

(see

Exhibit

3.3).

He

nored:

I

utotr,ld

lore

to

thinh

th,L

there

is

some

perfect,

fbcusecl

sfra,teg\

out

there

that

uould

enyure

our

success.

lhtt

the

lact

('the

matter

is tltat

ute

hout

lu

fterforttt

tt'cll in

nll

rt.:prrtt nI

out l,usintst. .\pet

if it

srntreg-i.

in.itirtiues

nre

fif,rical\

the result

of srme

personnl,

uision.

lv[y

okl

bos.s,

Mike NId\Ianus,

started,

to

.foat'

on

quality. M1

current

boss,

Jert,rLl

Dudky,

thinks

zue

need to

strengthen

Lhe

uoice

of

the

antom.r;

theret'ore,

ute ha,ue

kLunl:hed,

scuera,l.

(:ustomer

seruice

ini,tiatives

inclurli.ng

a, satis:

.faction

surac).

Llovd

brousht

in

tlvo

consultants

from

Hantrvood

Associates,

to con-

duct

a

benchmarking

st,d,v

of

the r.anufacturinu

operation

fbr

trrro

1'easor1s.

First,

he'wanted

to

assess

the

progress

that

had

been

made

in

the

various,

periciclic

improvement

initiatives

in

the

past.

second,

he

r'vanted

a

methocl

bv

which

the

manufacturing

sroup

could

set

opera-

tional

goals

for

itself.

The

consultants,

Debra

Spoouer

and

charlene

crandall,

both

recent

graduates

of

a lr,ell-knon,n

Eastern

business

school,

initiall,v

ernbarked

o.

the

generic

steps

of

a benchrnarking

studv

but

quickl,v

ran into

problems

as

they

thor,rsht

aborit

the

clesign

of

this

particular

stud\,.

7/24/2019 integron1

11/19

Cose

3.2

lniegron

lncorPoroted

9::r:ll

':t :l?i.:r:i':l:

i::: trll

fr:q::T

ME

OBJECTIVES

OPERATIONAL

PROGRAMS

ME

INITIATIVES

IMPROVE

CUSTOMER

SATISFACTION

INCREASE

PEOPLE

INVOLVEMENT

CUSTOMER

SATISFACTION

l.

lSO900l

Certificotion

2. Customer

Soilsfoction

Plonning

Orgonizoiion

3. DQI

Progrom

4. Customer

Servlce

ond

Quoliiy

lmprovement

Foru

ms

5.

Customer

Removol

Rote

6.

Customer

Chonge

Notificoiion

&

Acceplonce

Progrom

/. T2

Roting

ORDER

REALIZATION

1.

Monufociuring

ond

Order

Monogemenl

Sysiems

2. Service

lo Customer

Wonl

lmprovemenls

NEW

PRODUCT

INTRODUCTION

l. New

Producl

Reolizotion

lmprovemenls

2. MCM

Product

Reollzotion

Process

3.

FCP

Migrotion

Progrom

4.

FCP Product

Reolizotion

Process

SKINNER

DISCIPLINE

l

Skinner

Assessmeni

PEOPLE

INVOLVEMENT

1 . Quolity

lmprovemeni/Tosk

Teoms

2.

Suppori

Teom

3.

Employee

Suggestion

Progrom

4. Customer

Focus

LEADERSHIP

1. Leodership

Troining

2. Monogemenl

Teom

Initioiives

3.

Performonce

Approisol

4.

Skills

Enhancement

Proqrom

COMPLETE

TURNAROUND

PLAN

PROFIIABLE

GROWTH

L

Microeleclronics

Tronsition

2.

Domestic

Soles

Growth

3.

lnternotionol

Soles

Growth

FINANCIAL

COMMITMENT

1 . ABC

lmplementotion

2. MCM

Focus

Foctories

3.

FCP

Focus

Fociories

4.

Expense

Reduction

Initioiives

TECHNOLOGY

'l

.

MCM-L Iniroduction

2.

Low-cost

Metollizotion

lnlroduciion

3.

New

Polymer

Introduction

4. MIT

lniroduciion

5.

FCP

Developmenl

I

I

I

Proqromsl

ENVIRONMENTAL

L CFCICHC

Eliminotions

2.

SARA

3,13

(Alr)

3.

Poper

Recycling

ond

Reduction

Whal

altributes

should

be

benchmorked?

Tl're

constrltants

\\'anted

to

benchmark

a specific

operati()nal

irtfibute

21s

it

aPplied

to a

sirlglc

n)21rkel

scglncnt.

Hotcver,

Llovcl

hircl

exprcssed

strollg

I'eelings

that

ltis

organizad;n

h:rcl

to

br-rild

a set

of

sctleral

capabilities

that

i:oukl

scrve

all

segmi:nts.

He

hopccl

that thc

stucll"lvoulcl

help unc:rrth

this

set

of

rcquired

skills;

thus,

hc clid

not \,vant

the

consultattts

to

1l21rro\{

the

sttrdl

ilr

atrv

rvav

7/24/2019 integron1

12/19

Port

3

Doto

Goihering,

Anoiysis,

ond

Engogement

Monogement

How

shourd

dota

be

corected?Beca,se

there

u,ere

no

crear

indus_

r'

ieaders'

trre'

c.,,sultants

di(1

no_t

\,vant

to

fircus

solely

upon

o,rpe

tit,rs'

sk,r.s

They.also

s.specl;d

that

if

co,rpetiti'e

prant

tours

\('re

'.rirnrerl.

rlrer

rr..uld

he

Ioo

gs11.,,.,,;

r,,

be

lrt.lplui.,;j,rT,;:,;:.:i:

orners

was

:t pote.tial

alte.,at.,

;',r;r.,.,

,f

infbrmation;

hor,r,ever,

ICD

zrcl

'er'f'erv

oEtrI

.r,r,.,-",.

,,,-rh;;;;".

of

rhe

sr.clr..

eaaiiiorurtl;

tt,"

onsurtarts

srspectccl

th.t

these

oru..

n"a

l,er'

little

cont:,rct

\{dth

other

\{cM prodrtcers.

Th*s,

sp.,,r,r..

or-il

c.anaalt

*,ere

fhced

u.it^

the

task

f

,enc'nrarking

a

broaa

ser

;p;;,;"nce

crircria

across

rb,r

market

cemenls

ivith

litrle

access

to

competitots.

,",I'l}|l|:.||:?:llfl;orne

risks

associatecl

rvitn

benchm,rki.g

in

the

r

Slr,rrrld

berrr.hrrar.kinq

lrt.ase6l

,r7

,rll

ttt

st.t

lorrg_ler.rrr

objcctires

ri

this

f.stpacecr,

..i"

i,..1,,.t

"i

ii"r,:"'ji,"::*::::t1,

.l]

lr:rscrl

orr

rJre

I

I(-_D

set

specific

ohjt.