Motorola Company - Management Essay Example
Motorola was founded in 1928, and soon became widely known for its radios and other consumer electrical and electronic products - Motorola Company introduction. Motorola has achieved over$ 5. 5 billion in sales, employed over 99,000 people and spent $411 million in research and development. By the 1960s, it sold semiconductors products, communications equipment, and components to consumers, industrial companies, and the military throughout the world. To exploit fully the growing demand for semicustom integrated circuits, Motorola organized the Application Specific Integrated Circuits (ASIC) Division as part of the Semiconductor Products in 1984.
The controller of ASIC sensed that he and his staff could play a significant part in determining the success of this new business. That is, because ASIC division was competing in a new and dynamic market with unique requirements but it also was radically changing the way to deliver its product. These circumstances led the controller to reassess the most basic issues involved in designing a management control system, which are how, what, who, and for whom should it be measured.
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The managers of the new division realized that the semicustom integrated circuit business had different requirements for success. In this semicustom gate arrays market, the customers are involved in the middle of the development cycle. Thus, Motorola focused on its customers, rather than on its product. Customers such as DEC, Apple Computer, and Unisys competed in markets characterized by rapidly changing technology. High quality, quick development time, and the ability to achieve volume production rapidly were paramount to capture the business of these customers, while price was secondary importance.
In 1985, the ASIC Division occupied Motorola’s Chandler facility in Phoenix, US. The division was organized along functional lines called Department, which are: Product Engineering Department, Production Planning Department, Marketing Department, New Product Development Department, Quality Assurance Department, and Manufacturing Department. These department, along with Division Financial Controller are headed by ASIC Division General Manager.
Product Engineering Department was responsible for the tehnical aspects of ongoing product manufacturing, where product engineers designed the maunfacturing process, made a feasibility study, estimate revenues and reported to marketing department to ensure that the assumptions and estimates were reasonable. Production Planning Department scheduled orders from the customers. When the product was shipped, the department billed the client and reported this to the financial controller. Marketing Department was responsible for identifying initial prospects and making sales to them.
In addition, the department had certain responsibilities for product pricing and accurate forecasting of market demands. New Product Development Deparment was responsible for the translation of customer product specifications into manufacturable designs. This group provided an estimate of manufacturing cost to the marketing group. Quality Assurance Department was responsible for the outgoing quality of the product. And the Manufacturing Department focused on manufacturing process. In the new plant for ASIC Division, machines and workers were organized along functional lines.
This functional design resulted in large physical movements of product over relatively large distances on the factory flooes. There were 29 cost centers, whose inventory was valued at standard cost. This system required extensive recordkeeping. An entry was made everytime the product was moved from one cost center to another. A frequent physical audit of inventories was required to verify product amounts. This functional design of the factory caused difficulty in placing responsibility for an individual product, also resulting large inventories and large batch sizes.
So the manager of the newly formed ASIC Division realized that the new production facility in Chandler represented an opportunity to introduce substansial changes in the division’s manufacturing operations. The factory was organized around nine cells, and products moved from cell to cell where most of the processes were machine paced. Each of the cells was run by a production team, which was supervised by a team leader. The controller of the ASIC Division was well aware of the tendency of the outdated control systems to hinder progress in manufacturing operations.