Chapter-11
Case Analysis
Case 11-1
Analog Devices, Inc. (A)

Time Frame: 1986-90

Q1A. What was Analog Devices’ strategy in the second half of the 1980s?

Answer: Problems faced in mid 80’s Growing inventory Increase in defect level of product ADI’s strategy in 2nd half of 80’s Emphasis on quality QIP: Half-life by implementing TQM Scorecard.
TQM OUTCOME Parameter Measured improvement On time delivery Increased from 70% to 96% Cycle time Decreased from 15 weeks to 8 weeks Average yield Increased from 26% to 51% Defects in products shipped Decreased from 500PPM to 50 PPM.

Q2A. 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 the half-life for different process? How is the half-life concept different from the experience curve concept?

Answer: Benefits of half – life: Limitations of half life concept Difficult to determine half life as it is dependent on technical and organizational complexities Calculated based on historical data which may not give a very clear picture 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.
IMPLEMENTATION OF HALF-LIFE
Half Life Learning Curve Rate of decline of defect level is constant over time With doubling of cumulative experience the unit cost drops by a constant percentage Concept generally deals with defects Concept generally deals with cost Defect reduction owing to a root cause being eliminated and subsequent tackling of the next root cause Cost reduction owing to the same action being performed repeatedly.
Q3A. Identify the conflicts that