Motorola Inc., Bandit Pager Project

1
Motorola Inc., Bandit Pager Project

• The development of a fully automated production
  line for manufacturing radio pagers. The project
  was completed in 18 months.

2
Learning Objectives

• This case gives students the first view of an
  entire development project.
• The case helps to frame the discussion about how
  projects help educate those involved.
• This case helps students understand the value of
  step-wise, rather than revolutionary,
  improvement, and see how projects can be used to
  create and institutionalize new capabilities and
  culture.

3
Background

• When the Japanese entered the American electronic
  pager industry selling pagers at about half the
  price, Motorola realized that business as usual
  wouldn't be enough.
• They set out to develop the best off-the-shelf
  technology in the world. Through the Bandit
  Project, they reduced production costs
  drastically, gained the flexibility to make each
  pager different to fit customers' specific needs.
  
• Motorola now transmits orders for customized
  pagers (see next slide) by computer to its plant
  at Boynton Beach, Florida. The pagers are
  manufactured, tested, and ready for delivery in
  less than two hours.

4
Mass Customization

• Motorola began customizing their Bandit pager in
  the early 1980s, to offer customers up to 29
  million product combinations encompassing
  hardware and software configurations.
• Production was consolidated in one factory
  whereas before the project it had been divided
  among a number of facilities. Customers select
  their options and a salesperson enters the
  specification into a computer system. It is then
  transmitted to the company systems and on to the
  assembly process.
• The facility could accept orders for single
  pagers in any sequence. The finished product was
  then shipped to the customer.

5
What is Six Sigma?
Pioneered by Bill Smith at Motorola in 1986
originally used as a metric for measuring defects
for improving quality a methodology to reduce
defect levels Opportunities (DPMO). Motorola has reported
US17b savings as of 2006. Early adopters
include Bank of America, Caterpillar, Honeywell
International (previously known as Allied
Signal), Raytheon, Merrill Lynch and General
Electric.
6

• Three levels of Six Sigma
• As a Metric
• As a Methodology
• As a Management system
• Essentially, Six Sigma is all three at the same
  time.
• is a registered service mark and
  trademark of Motorola, Inc.

7
Metric

• The term Sigma is often used as a scale for
  levels of "goodness" or quality.
• Equates to 3.4 defects per one million
  opportunities (DPMO).
• Six Sigma started as a defect reduction effort in
  manufacturing and was then applied to other
  business processes for the same purpose.

8
Methodology

• A business improvement methodology that focuses
  an organization on
• Understanding and managing customer requirements
• Aligning key business processes to achieve those
  requirements
• Utilizing rigorous data analysis to minimize
  variation in those processes
• Driving rapid and sustainable improvement to
  business processes

9

• At the heart of the methodology is the DMAIC
  model for process improvement
• Define opportunity
• Measure performance
• Analyze opportunity
• Improve performance
• Control performance

See Some Tools of 6 Sigma, slides 11-17.
10
Management System

• A top-down solution to help organizations
• Align their business strategy to critical
  improvement efforts
• Mobilize teams to attack high impact projects
• Accelerate improved business results
• Govern efforts to ensure improvements are
  sustained
• Framework to prioritize resources for projects
  that will improve the metrics, and it leverages
  leaders who will manage the efforts for rapid,
  sustainable, and improved business results.

11
Some Six Sigma Tools 
12
Quality Function Deployment

• QFD helps Six Sigma Black Belts drive
  customer-focused development across the design
  process.
• QFD is a system and set of procedures to
  identify, communicate, and prioritize customer
  requirements.
• Did you know? With QFD, Six Sigma teams can more
  effectively focus on the activities that mean the
  most to the customer, beat the competition, and
  align with the mission of the organization.

13
Cause and Effect Matrix

• The CE Matrix helps Six Sigma project leaders
  facilitate team decision-making.
• The CE Matrix is a tool that helps Six Sigma
  teams select, prioritize, and analyze the data
  they collect over the course of a project to
  identify problems in that process.
• Six Sigma teams typically use the CE Matrix in
  the Measure phase of the DMAIC methodology.
• The CE Matrix is particularly great for
  obtaining team consensus on the potential
  relationships between factors that affect a
  process and the output of that process.

14
Failure Modes Effects Analysis

• FMEA helps Six Sigma teams to identify and
  address weaknesses in a product or process,
  before they occur.
• Before implementing new products, processes, or
  services, Six Sigma teams use FMEA to identify
  ways their new introductions might fail, and then
  to develop preventative measures targeted at the
  failure scenarios.
• Did you know? An effective FMEA identifies
  corrective actions required to prevent failures
  from reaching the customer and will improve
  performance, quality, and reliability.

15
t-test

• The t-test helps Six Sigma teams validate test
  results using small sample sizes.
• The t-test is used to determine the statistical
  difference between two groups, not just a
  difference due to random chance. Six Sigma teams
  might use it to determine if a plan for a
  comparative analysis of patient blood pressures,
  before and after they receive a drug, is likely
  to provide reliable results.
• Did you know? Guinness Brewery is the work
  environment that led to W.S. Gossett's creation
  of the t-test. While an executive at the brewery
  in Dublin, Gossett created the t-test to help
  select the best barley for Guinness beer.

16
Control Charts

• Six Sigma teams use Control Charts to assess
  process stability.
• Control Charts are a simple but highly effective
  tool for monitoring and improving process
  performance over time because they help Six Sigma
  teams to observe and analyze variation.
• The three basic components of any control chart
  are a centerline, upper and lower statistically
  determined control limits, and performance data
  plotted over time.

17
Design of Experiments

• DOE helps Six Sigma Black Belts make the most of
  valuable resources.
• DOE is a statistical technique that encompasses
  the planning, design, data collection, analysis
  and interpretation strategy used by Six Sigma
  professionals.
• Did you know? Six Sigma teams use DOE to
  determine the relationship between factors (Xs)
  affecting a process and the output of that
  process (Y).

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Structure and Organizational Position of an
Innovating Team
19
RD Organizations
20
Shusa

• Leadership -- shusa big boss/ project named
  after shusa
• Teamwork -- member assigned to project for its
  life (continuity)/ retain ties with functional
  area but under control of shusa. How they
  performed will be evaluated by shusa, will
  determine their next assignment.
• Communication -- team members signed pledges to
  do exactly what everyone has agreed upon as a
  group/ resolve critical design trade-off early.
• Organization -- number of team members are
  highest at outset of project. As development
  proceeds, number dwindles as specialties (e.g.,
  market assessment) are no longer needed.
• Concurrent engineering (CE)

21
Factors Affecting the Necessary Structure and
Organizational Position of an Innovating Team
22
Demonstration Project

• A tool used to improve product development
  capability.
• The Bandit Project provides Motorola Inc.
  opportunity for
• Learning,
• Accessing what was learned,
• Building on its success to enhance its
• Capabilities
• Rate of learning on future projects.

23
Important Lessons Learned

• Making a heavyweight project team work
  effectively on a major development effort,
• Technical problem-solving in a process automation
  project,
• Transitioning from a development project to an
  ongoing operating environment,
• Process development project lessons that might be
  transferable to product development projects.

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Analysis
25

• Top management support
• Selection of champion
• Creation of dedicated team
• Development of contract book
• Participation of ALL essential functions
• Development of periodic prototyping
• Broad-base sharing and knowledge development
  across various sub functions.

26
Transition

• What steps must be undertaken to ensure that
  day-to-day operating performance and achievements
  will be as outstanding as the development project?

27
From RD to Production
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Classical Transition Problems

• A product goes through 5 stages
• Concept definition of a product is accomplished
  by close collaboration between marketing and RD.
• Production development RD, in close cooperation
  with the reliability and quality department, is
  responsible for producing working prototypes
  documentation
• Manufacturing is responsible for mass-producing
  the product, overseen by the reliability and
  quality department.
• Marketing is responsible for distribution and
  sales, and
• After-sales service and support.
• Organizational walls of responsibilities exist
  between RD and manufacturing
• Frequently causing delays in the introduction of
  a new product to the market.

29
Quarrels and Disputes

• Often, RD lose interest in a product once the
  prototype successfully demonstrate the principle
  of operation and reached the desired level of
  performance.
• They see the subjects of cost of fabrication, the
  use of readily available parts and materials,
  etc. as of secondary importance.
• They see work related to problem-free
  manufacturing as trivial, that all tasks related
  to manufacturing are none of their business.
• Manufacturing expects to receive a fully
  developed and de-bugged product from RD, with
  all necessary error-free documentation and
  drawings
• Any mistake in the documentation or
  inconsistencies in the drawings provided by RD
  can be a major cause in interrupting the
  manufacturing process.