MODULE ASSIGNMENT OF COST MANAGEMET
WAHYU EKA LESTARINING TYAS
023111120
EXCELLENT CLASS-B 2011
TRISAKTI UNIVERSITY
MODULE ASSIGNMENT OF COST MANAGEMET
FOREWARD
Thnakful to God for all blessing that
I receive during the making of
module assignment report. Without His blessing, I believe this module assignment
can’t be done on define time.
As working for this report, I know there are so many constraints. But,
thankfully it can be resolved. I would like to say thank you to:
1.
Mam Dr. Yvonne Augustine, Ak., MM, CMA. as lecturer of Cost Management
3.
My parents who are willing to give me support.
4.
KU 2011 gives input and support to the completion of this module
assignment.
I known as a human being, I cannot make it perfect because perfection only
belongs to God. So, critics and suggestions are something that I need for
improvement of this module assignment. I hope it will be useful for everyone who
reads it in the future.
Jakarta, January 2014
Writer
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TABLE OF CONTENT
FOREWARD…………………………………………………………………………………………………….......
1
TABLE OF CONTENT…………………………………………………………………………………....……..
2
CHAPTER I: PREFACE
I.1 Background…………………………………………………………………………………………
4
I.2 Problem Statement………………………………..........................................……………
4
I.3 Objectives…………………………………………………………………………………………….
5
I.4 Advantages of Writing…………………………….………………………………………….
5
I.5 Systematization………………………………………………….....……………………………..
5
CHAPTER II: COMPANY PROFILE
II.1 Motorola…....................................................................................................................
7
II.2 NOKIA……………………………………………………………………………...........................
8
CHAPTER III: DISCUSSION AND ANALYSIS
III.1 Vision, Mission, Strategy……………………………………....................….............
10
III.2 SWOT Analysis………………………………………………………………………………..
13
III.3 Value Chain…………………………………………………………………………………….
17
III.4 Balanced Scorecard………………………………………………………………………… 18
III.5 Sustainability…………………………………………………………………………………… 20
III.6 Activity Based Costing…………………………………………………………………….. 23
III.7 Decision Process……………………………………………………………………………... 24
III.8 Quality Process………………………………………………………………………………... 34
III.9 Six Sigma………………………………………………………………………………………….. 35
III.10 Cost of Quality Indicators………………………………………………………………. 36
III.11 Supplier………………………………………………………………………………………….. 37
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III.12 Supply Chain…………………………………………………………………………………. 40
III.13 Efficiency / Effectiveness Linked to the Performance……………………. 41
III.14 Environmental Activities……………………………………………………………….. 43
III. 15 Environmental Plan………………………………………………………………………. 48
III.16 Environmental Benefits………………………………………………………………….. 49
CHAPTER IV: CONCLUSION………………………………………………..………………………………. 51
REFERENCES………………………………………………………………………………………………………….. 53
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CHAPTER I
PREFACE
I.1 BACKGROUND

Understanding Cost Management
Cost management is a system designed to provide financial information
(income and expenses) and non-financial information (quality and productivity) for
the Management to identify opportunities for improvement, strategic planning and
operational decision-making regarding the provision and use of resources in use by
the organization.
Cost management is also an integrated system that shows a link with other
systems such as the system design of the development, purchasing and production
systems, customer service systems, and also marketing and distribution system.
Cost management’s benefits for management:
1.
2.
3.
4.
5.
6.
Planning and control
Assist management in improving traceability costs
Assist management in optimizing total life cycle performance
Assist management in decision-making
Assist management in the investment management process
Assist management in integrating non financial performance measurement
criteria into financial performance in order to ensure consistency.
7. Assist management in organizing various levels of authorization
Other benefits from Cost Management is for helping company in applying new
management technic such as Bencharking, Total Quallity Management, Continous
Improvement, Activity Based Costing dan Activity Based Management, Reengineering, Theory
of Constraint, Mass Customization, Target Costing, Life Cycle Costing,dan Balanced Scorecard.
I.2 PROBLEM STATEMENT
Based on background issues this paper contains answer of some questions
that should be should be analyse to get a conclusion in comparing between two
copanies based on their Cost Management. The questions are:
1.
2.
3.
4.
5.
Mission, Vision, Strategy
SWOT Analysis
Value Chain
Balanced Scorecard & Sustainability
What is the activities while using ABC System?
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6. What kind of cost driver used in this company?
7. Decision process in this company
8. Concept of target costing used in this company
9. Quality process, six sigma, cost of quality indicators
10. Who is the supplier of this company?
11. How the supply chain management used or implemented in this company?
12. Is there any efficiency or effectiveness linked to the Company
performance?
13. What are the environmental activities of this company?
14. Is there any environmental plan for the future?
15. What is the environmental benefits of this company?
I.3 OBJECTIVES
The general objective of writing this paper is to find and analyze about the
factors of Cost Management in company that have been choosed. I choose company
in manufacture industry, they are Motorola and its rival NOKIA.
I.4 ADVANTAGES OF WRITING
Excess of module assignment are:
1.
To maximize the score as one of the subjects assessment of Cost Management
2.
In theory, to provide understanding for authors, readers, and users assignment
module of Cost Management for each chapter
3.
Generally, as the consideration for authors, readers, and users about the
condition of each company
4.
Module assignment is useful for companies who want to make comparisons
with competitors.
I.5 SYSTEMATIZATION
Module assignment is arranged in a sequence of chapter one until chapter
three. In every chapter consists of several sub-chapters in order to facilitate the
reader understand the core of this paper. Here's part of it:
 CHAPTER I : PREFACE
There are the background, systematization, problem statements, objective,
advantages of writing and systematization of this paper.
 CHAPTER II : COMPANY PROFILE
Explain about two companies that will be disscused
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 CHAPTER III : DISCUSSION AND ANALYSIS
Anwering the questions for both of companies (Motorola and NOKIA)
 CHAPTER IV : CONCLUSION
Conclusion from analysis in chapter III
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CHAPTER II
COMPANY PROFILE
Motorola, Inc was an American multinational telecommunications company
based in Schaumburg, Illinois. After having lost $4.3 billion from 2007 to 2009, the
company was divided into two independent public companies, Motorola
Mobility and Motorola Solutions on January 4, 2011. Motorola Solutions is generally
considered to be the direct successor to Motorola, Inc., as the reorganization was
structured with Motorola Mobility being spun off.
Motorola designed and sold wireless network infrastructure equipment such
as cellular transmission base stations and signal amplifiers. Motorola's home and
broadcast network products included set-top boxes, digital video recorders, and
network equipment used to enable video broadcasting, computer telephony,
and high-definition television. Its business and government customers consisted
mainly of wireless voice and broadband systems (used to build private networks),
and, public safety communications systems like Astro and Dimetra. These businesses
(except for set-top boxes and cable modems) are now part of Motorola Solutions.
Motorola
now
focused
on
smartphones
using Google's
opensource Android mobile operating system. The first phone to use the newest version
of Google's open source OS, Android 2.0, was released on November 2, 2009 as
the Motorola Droid (the GSM version launched a month later, in Europe, as the
Motorola Milestone). On May 22, 2012, Google CEO Larry Page announced that
Google closed on its deal to acquire Motorola Mobility. After being acquired by
Google they continued with released of Moto X and Moto G as their newer products.
Motorola’s products that being seeded after acquired by Google:
MOTO X
MOTO G
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COMPANY PROFILE
Nokia
Corporation is
a Finish communications
and
information
technology multinational
corporation that
is
headquartered
in Espoo,
Finland. Its Nokia Solutions and Networks company providestelecommunications
network equipment
and
services,
while
Internet
services,
including applications, games, music, media and messaging, and free-of-charge
digital map information and navigation services, are delivered through its wholly
owned subsidiary Navteq.
As of 2012, Nokia employs 101,982 people across 120 countries, conducts
sales in more than 150 countries, and reports annual revenues of around €30
billion. By the fourth quarter of 2012, it was the world's second-largest mobile phone
maker in terms of unit sales (after Samsung), with a globalmarket share of
18.0%. Now, Nokia only has a 3.2% market share in smartphones. They lost 40% of
their revenue in mobile phones in Q2 2013. Nokia is a public limited-liability
company listed on the Helsinki Stock Exchange and New York Stock Exchange. It is
the world's 274th-largest company measured by 2013 revenues according to
the Fortune Global 500.
Nokia was the world's largest vendor of mobile phones from 1998 to
2012. However, over the past five years its market share declined as a result of the
growing use of touchscreen smartphones from other vendors—principally
the iPhone, by Apple, and devices running on Android, an operating system created
by Google. In a bid to recover, Nokia announced a strategic partnership
with Microsoft in February 2011, leading to the replacement of Symbian with
Microsoft's Windows Phoneoperating system in all Nokia smartphones. Following
the replacement of the Symbian system, Nokia's smartphone sales figures, which had
previously increased, collapsed dramatically. From the beginning of 2011 until 2013,
Nokia fell from its position as the world's largest smartphone vendor to assume the
status of tenth largest.
On 2 September 2013, Microsoft announced its intent to purchase Nokia's
mobile phone business unit as part of an overall deal totaling €5.44 billion (US$7.17
billion). Stephen Elop, Nokia's former CEO, and several other executives will join
Microsoft as part of the deal.
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Nokia’s products that being seeded after join with Microsoft:
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CHAPTER III
DISCUSSION AND ANALYSIS
III.1 MISSION, VISION & STRATEGY
MISSION
We are a global communications leader powered by a passion to invent and an
unceasing commitment to advance the way the world connects. Our communication
solutions allow people, businesses and governments to be more connected and more
mobile
VISION
Our history is rich. Our future is dynamic. We are Motorola and the spirit of invention is
what drives us
STRATEGY
Motorola is using differentiation strategy for their company. It can be seen
through three ways of their strategies. First, in 2011 Motorola has been released
many kinds of products of smartphone with android as their system on their
smartphone. The products, such as Motorola Charm, Motorola Atrix, etc. In
Indonesia, their products weren’t success. Motorola divided their products into many
kinds of models, but that’s not too clear, they specified it based on what, so
customer confused and their strategy can be called as failed, because they didn’t get
good profit. They wished that in the next year, they can be focus only for one or two
models of smartphone.
Second, in 2012 Google has been acquired Motorola, so Motorola’s product
has different design with their design in the past, not only the design, their logo also
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changed after Google has acquised Motorola. In fact, after Google acquised
Motorola, they’ve been focused about the design on their smartphone. They divided
their product into two. They released Moto X for adult and Moto G for teenagers.
They specifying their product based on price, color and size. Moto X has focus on
Adult customers, because it has high price (About Rp 5.000.000-Rp 6.000.000), the
color is just black and white, and size is bigger than Moto G. Different from Moto X,
Moto G has lower price (about Rp 2.000.000), they served Moto G with colorful case
such as, blue, yellow, white, red, black, etc. With this differentiation, Motorola has
profit better than 2011.
Third, after Google acquired Motorola, they also divide their product not only
smartphone, but also tablet Product. For this kind of product, they’ve been released
Droid X, and Droid 2. They want to compete one of their competitor, Apple with Ipad
for their tablet product. Droid has good sales but haven’t beat the sales of Ipad.
MISSION
Connecting people.
Our goal is to build great mobile products that enable billions of people worldwide to
enjoy more of what life has to offer. Our challenge is to achieve this in an increasingly
dynamic and competitive environment. (Nokia, about us)
Nokia’s mission seems focused on building its brand worldwide, it looks like
Nokia would like to achieve again the credibility and the position as a market leader,
which it once had. The company wants to target the mass market and it also
understands that the products it has to offer must be “more” than what already exist
in the market. The mission statement is recognizing the competitive environment
that Nokia faces now. Nokia is lacking the positioning and the brand identity of its
competitors.
VISION
Regaining leadership in the Smartphone space
To help us achieve our mission, Nokia has formed a strategic partnership with
Microsoft that will, we hope, see us regain lost ground in the Smartphone market.
Together, we intend to build a global ecosystem that surpasses anything currently in
existence. The Nokia-Microsoft ecosystem will deliver differentiated and innovative
products with unrivalled scale in terms of product breadth, geographical reach and
brand identity.” (Nokia, about us)
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The company’s vision on how it will achieve its mission seems build around
the company’s strategic alliance with Microsoft. Nokia seems to understand that they
have lost their brand identity and bets on the partnership with Microsoft to build
new ecosystem, which will compete with and surpass their rivals. Nokia’s main
objective is to regain its lost market share and position itself as market leader. From
their vision we can see that, they recognize the need of differentiation and
innovation in order to achieve these objectives. However from the mission and vision
statement it does not become clear who Nokia’s customers are. The company is
targeting the mass smartphone market.
STRATEGY
Nokia is using differentiation strategy. Generally, marketing strategy of Nokia
is based on three factors. First, Nokia designing their product based on the market
segment, it means that Nokia runs the strategy of multi product for multi market
segment. If we observe, in Indonesia Nokia has a long range of price for their kind of
hand phone. They serve hand phone start form under Rp 1.000.000 until over than
Rp 5.000.000. Nokia serve all grades of hand phone, start from the low ones until the
high ones. With this kind of strategy, they can get their self into all circles.
Second factor, Nokia has a design product which elegant and interesting. If we
observe, most of Nokia’s design is interesting, colorful and relatively loved by market.
The colors offer customization for the devices and differentiate the products from
rivals such as Samsung, Motorola and Apple. The three companies often offer their
smartphones in only two colors. Besides design, Nokia’s product also known by their
durable product. Means that, not only use design as their priority, but also customer
satisfaction also they keep, to make the hand phone is more lasting.
The third factor, the devices of Nokia’s products is differentiated in a non-physical
way through the company’s partnership with Microsoft. Nokia is first to manufacture
a smartphone running Windows software, and at present it is offering more Windows
phones than any of its rivals. The Lumia 920 is also differentiated by its innovative
technologies such as its revolutionary camera. Nokia 820 and 920 both offer wireless
charging, which is a new and innovative offering for the European market.
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III.2 SWOT ANALYSIS
STRENGTH
1. Reacting to the situations and
challenges very quickly
2. Motorola existed as strong competitor
in the market because of having
strong alliance, acquisitions and
mergers.
WEAKNESS
3. Quality of the product is not up to the
mark when compared to its
competitors.
4. Customer service is one of the biggest
weaknesses, many complaints
registered saying that “executives
doesn’t react after the sale”.
OPPORTUNITY
5. New ventures, business partners and
alliances can increase the dealings of
Motorola.
6. Introducing new product categories
into market can make Motorola more
competitive.
THREAT
7. All other competitors like Nokia,
Samsung are providing high quality
products at low prices.
Strengths
1. Reacting to the situations and challenges very quickly
As look from Motorola strategy from 2011 to 2012, although they used same
strategy, that’s differentiation strategy. But, they are sensitive that their product
in 2011 weren’t suces, So in 2012 they released their products being more focus
to their target market. It makes their profit higher.
2. Motorola existed as strong competitor in the market because of having strong
alliance, acquisitions and mergers.
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After Google acquired Motorola, they became a strong competitor in
smartphone industry because Google is the owner of Android system. It make
sense, that other competitor will be careful with the innovation of Motorola.
Weaknesses
1.
Quality of the product is not up to the mark when compared to its
competitors.
For the quality of their product, Motorola can’t be guaranteed. Not like their
competitor, Nokia, Nokia being known with their durable product, especially
their battery. But Motorola haven’t known yet by their good quality.
2.
Customer service is one of the biggest weaknesses, many complaints
registered saying that “executives doesn’t react after the sale”.
Especially in Indonesia, Counter with license from Motorola is so rarely being
looked in Mall. Different from its competitors such as, Nokia, Samsung, Apple,
they have their own counter with their customer service who ready to serve
customer. This point, makes customer need to think twice for buying Motorola’s
product.
Opportunities
1. New ventures, business partners and alliances can increase the dealings of
Motorola.
Wishing after being acquired by Google, the management, strategy and
innovation can be better than before. Because Google is the owner of Android
system, wish that Motorola can complete what we feel less from their product.
2. Introducing new product categories into market can make Motorola more
competitive.
After acquired by Google, Motorola released their Moto X and Moto G, it makes
their company is like coming again after no good innovative product they’ve
been released. Hoping that’s is a good introduction for their company after
being acquised by Google.
Threats
1. All other competitors like Nokia, Samsung are providing high quality products
at low prices.
Motorola’s competitor such as Nokia and Samsung surely also served their
products by High quality and low prices. This minded haven’t attached by by
Google company, although they have make an effort in their Moto G product.
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STRENGTH
1. The brand is well known
2. The products are associated with
distinct design, accountability and
sturdiness
3. Has developed brand awareness and
the company brand has been
associated with the best products in
the industry
WEAKNESS
1. Difficult in catching up with the
changing customer trends
OPPORTUNITY
1. Partnership with Microsoft
THREAT
1. Facing a huge competition
2. Hard for company to come back to
the top again
STRENGTH
1. The brand is well known
One of Nokia’s main strengths is in its brand. Before the mobile phone market
was sidelined due to changing market trends, Nokia has been one of the most
respected and well-known companies in the mobile phone market. Their products
are associated
2. with the products are associated with distinct design, accountability, and
sturdiness
With distinct design, accountability and sturdiness, The Company has headed the
sales in mobile phone market since 1998 until the last couple of years (“Samsung
overtakes Nokia”, 2012).
3. Has developed brand awareness and the company brand has been associated
with the best products in the industry
Nokia has developed brand awareness and the company brand has been
associated with the best products in the industry. Although Nokia is having hard
times catching up with the Smartphone market, their brand and loyal customers
can help the company to regain its market share. The company has been long
time in the smartphone market and has great and experienced personnel.
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WEAKNESS
1. Difficult in catching up with the changing customer trends
Nokia is having difficulties catching up with the changing customer trends; it is
lagging with introducing innovative products. The main evidence for this is the
inability of the company to meet market trends after the IPhone release, and the
failure of its Symbian platform. Nokia plays the role of phone manufacturer so
Internet, software and services are not its strengths. However this weakness is
now offset by the Partnership with Microsoft.
OPPORTUNITIES
1. Partnership with Microsoft
Nokia is one of the first companies to provide Windows phone, it could use
this as competitive advantage, and develop new and innovative products.
Samsung and HTC have also released Windows Phone 8 models after the first
Lumia Smartphones were introduced in Europe. However Samsung has only
one windows phone and Nokia by now has released eight. This means that
Nokia is more experienced into developing joint products with Microsoft. The
company can expand its Lumia series offering devices from different price
range and features to serve multiple customer demands.
THREATS
1. Facing a huge competition
Nokia is facing a huge competition in the Smartphone market from Samsung,
HTC and Motorola. In the high end costly mobile segment the company is
facing Apple’s IPhone and RIM’s Blackberry. Nokia has played the role of a
market follower and has lost time in the Smartphone market with developing
and repairing its strategy. Nokia has switched from Symbian software to
Windows phone, which confused customers and made it hard for the
company to deliver its message and build awareness in the market.
2. Hard for company to come back to the top again
It will be very hard for the company to come back to the top again as
Smartphone switch from the customer’s perspective is hard. The handset is
more than just a phone, it becomes part of people’s lives keeping their
important and personal information, and it adjusts to their personal
preferences. Due to the different software it is hard for the users to transfer
their information from one software as Android to other as Apple’s IOS. This
switch may cost users to loose important information. Given all this customers
need a very good reason to change their operating system. In order for Nokia
to gain back its lost market share, the company has to come up with very
good
Technology, and convince the customers that their products are the best
choice in the market.
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III.3 VALUE CHAIN
The value chain model is a useful analysis tool for defining a firm’s core
competency and the activities in which it can pursue a competitive advantage. A
firm’s success in developing and sustaining a competitive advantage depends not
only on its own value chain, but on its ability to manage the value system of which it
is a part.
Specific activity at NOKIA divided into two types; they are Primary activities
and Support activities, and the explanation:
1.
Procurement
2.
Human Resource Management
3.
Technologycal Development
4.
Firm Infrastructure
Support
Activities
1. Inbound Logistics 2. Operations 3. Outbond Logistics 4. Service
Primary
Activities
Primary Activities: 1. Inbound Logistics: Activities associated
2. Operations: Activities associated with
3. Outbound Logistics: Activities
4. Service: Activities that maintain
Support Activities: 1. Procurement: Relating to the acquisition with handling the
material prior to of inputs/resources
2. Human Resource Management: HR the processing of input into
output. Management from recruitment, compensation until
stopped.
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3. Technological Development: Development undertaken to deliver
the hand of tools, software, hardware, procedures, costumer
products. In transformation from input to output.
4. Firm Infrastructure: Compose of improve the products,
department, functions (accounting, finance, planning, etc.) that
serve the needs of the organization.
III.4 BALANCED SCORECARD
Financial Perspective
 Higher EPS to satisfy
stakeholders
 Sales growth
 Increase in stock
Customer Perspective
 Customer satisfaction
 Customer service
(customer survey)
 Market share and
growth in market share
Internal Perspective
price
Vision:
Our history is rich.
Our future is
dynamic. We are
Motorola and the
spirit
of invention
is
Learning
& Growth
what
drives us
Perspective
 Innovation
 Good research and
development
 Customer management
 Operational Excellence
 Regulatory &
environmental
processes
 Strategic
competences
 Strategic technologies
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Financial Perspective
 Earnings growth
 Increase in stock
price
Customer Perspective
 Customer loyalty
 Brand recognition
 Customer satisfaction
 Customer service
 price
Internal Perspective
Vision:
Regaining
leadership in the
Smartphone space
 Operational excellence
 High quality product
 Up to date invention
Learning & Growth
Perspective
 Innovation
 Competence of
managers
 Education and training
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III.5 SUSTAINABILITY
Motorola corporate responsibility team coordinates their activities and
determines which issues are important to Motorola Solutions. The team establishes
performance indicators, sets goals for improvement and reports progress to their
stakeholders.
They operate an Environment, Health and Safety management system and
have active participants throughout their businesses, working to reduce the
environmental impact of their products throughout their lifecycles. Their supply chain
corporate responsibility team assesses suppliers’ compliance with their business
conduct expectations, including labor and environmental standards.
Motorola have established metrics in relevant areas of corporate
responsibility. They determine these by referring to the Global Reporting Initiative
guidelines, the findings of stakeholder engagement and best-practice reporting.
They promote corporate responsibility to employees through communication
channels including the company intranet, emailed news summaries, employee
meetings, leadership messages and internal video systems. Each year, they share
metrics and achievements with employees and provide the link to their corporate
responsibility report online.
These principles guide Motorola’s actions:
INNOVATIVE
PRODUCTS, CUSTOMER
DELIGHT AND QUALITY
ETHICS AND
TRANSPARENCY
ENVIRONMENTAL
QUALITY
Motorola create
innovative products and
solutions with quality
and performance that
meet or exceed their
customers' expectations.
Motorola operate with
transparency and
according to high
standards of ethics and
the law in directing and
managing the company
for all stakeholders.
DIVERSITY AND
INCLUSION
SAFE AND HEALTHY
WORKFORCE
Motoroloa foster
sustainable use of the
earth's resources in their
products and operations,
and they strive to design
environmentally conscious
products.
ECONOMIC
OPPORTUNITIES AND
GROWTH
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Motoroloa create an
engaged workforce that
can contribute its full
potential in an inclusive
work environment.
In cooperation with their
employees, they work to
maintain a safe and
healthy workplace and
support employees' worklife integration.
Motorola work to create
wealth, economic
opportunities and growth
in regions where they do
business, through our
products, services,
relationships and
operations.
SUPPLIER
RELATIONSHIPS
COMMUNITY SUPPORT
SHAREHOLDER VALUE
Motorola support
educational,
environmental and social
needs in the communities
where they operate.
Motorola strive to achieve
strong financial results and
long-term success through
sustained profitable
growth, technological
innovation and market
leadership.
Motorola set
expectations for their
suppliers and work with
them to conduct their
operations in compliance
with applicable laws and
accepted standards of
fairness and human
decency. They promote
supplier diversity.
Nokia aims to be honest and transparent as Nokia seize opportunities to grow a
sustainable business and meet their obligations to people and the planet. Their
sustainability strategy is to support the business by meeting stakeholder
expectations, minimizing their impacts and maximizing their positive contribution.
Nokia focus on three key stakeholders: their employees, their customers and their
planet.
Good housekeeping
Nokia respects all relevant laws, regulations and international standards. More than
that, Nokia aim to create an organization where ethical business practice is a source
of pride and employees have a safe, motivating working environment.
Nokia Code of Conduct is central to operating responsibly. It is reinforced with
mandatory annual training for every employee and supported by detailed policies
and guidelines. Nokia also have strong management systems in place covering anticorruption, human rights, labor conditions, occupational health and safety,
and environmental protection standards.
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Their own operations have a relatively small environmental impact but they have
ambitious goals to improve the environmental efficiency of our facilities, IT services,
travel and service fleets.
Sustainable value for customers
Nokia extend the high demands they put on themself to their suppliers. They also
work closely with customers to improve the safety of all workers involved in higher
risk tower building and installation works.
But they can do more. Nokia put a lot of effort into helping customers reduce their
environmental footprint. As well as the industry-leading energy efficiency of our base
stations, they provide solutions to optimize energy consumption in the entire
network.
A good neighbor
Nokia want to contribute broadly to the communities where they operate and
employ people. They do this by minimizing any adverse environmental effects of our
operations and by connecting with local communities.
Positive impacts on the planet
The greatest contribution they can make to sustainability is to use their technology
to benefit communities and the environment.
Telecommunications is in a unique position to drive social and economic progress
while helping to reduce the environmental impacts of many industries. For example,
they are working with partners to deliver machine-to-machine (M2M) solutions as
well as to save energy in telecoms networks.
Additionally, we recognize their responsibility to carry out due diligence so that their
communications products are used to support and not infringe human rights.
Commitments
NSn (Nokia Solutions and Networks) is a member of the United Nations Global
Compact and they are committed to its Principles. Their annual Sustainability is their
Communication on Progress. Nokia Group, including Nokia Siemens Networks is
included both in Dow Jones Sustainability Index (“Technology Supersector Leader” in
2009 and 2010) and in FTSE4Good.
They want to maintain an active and open dialogue, engaging widely to find new and
better ways to serve stakeholders and improve our performance.
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III.6 ACTIVITY BASED COSTING
Motorola is produce a product in their operating activity, so the
implementation of Activity Based Costing can be used to produce some products.
Mobility can drive significant value for manufacturers with some of the biggest
savings realized by reducing unplanned downtime. Motorola can used Activity Based
Costing in their operator or maintanance, as:
By using Activity Based Costing, Motorola can compare what’s product will be
gain more profit for them. Example, they can compare between Moto X and Moto G.
Through activity based costing, they can know how’s the profit margin for each series
of smartphone by calculate all of the activities using each rate, then they’ll know
about the effectiveness and efficiency of each series of their smartphone. Through
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the result, they can make a decision for their company. Whether keep produce the
product or maybe eliminate it.
Nokia and Motorola are in the same industry, both of them is on manufacture
industry, so the implementation of Activity Based Costing can be used in producing
their products. Nokia can used Activity Based Costing in their operation as:
Activity
Activity Consumption Cost Driver
Engineering
Engineering Hours
Setups
Number of setups
Machine Operations
Machine hours
Packing
Number of packing orders
By using Activity Based Costing, Nokia can compare what’s product will be
gain more profit for them. Example, they can compare between Nokia Asha and
Nokia Lumia. Through activity based costing, they can know how’s the profit margin
for each series of smartphone, how’s the effectiveness and efficiency of each series of
smartphone. Through the result, they can make a decision for their company.
Whether keep produce the product or maybe eliminate it.
III.7 DECISION PROCESS
The choice of strategy for Nokia becomes a question of which option would give the
best chance of building a sustainable and viable ecosystem around Nokia products?
Nokia has three decision, and score it based on some factors on each decision.
So let's take a look at each of Nokia's three options to try and understand its recent
strategy decision:
MeeGo and Symbian
Android
Windows Phone
Technology
The Business Case
Technology
Ecosystem
Ecosystem
Differentiation
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1. MeeGo and Symbian
Technology (Operating System)
Symbian has, in the last few years, faced a barrage of criticism. The
most commonly cited example is the continuing debate around the Symbian
user experience (UX). However, in the longer term its architectural legacy and
the cost of porting Symbian to new hardware are more important factors.
Essentially these factors, together with the resource constraint characteristic
that has enabled Symbian's success to date, meant the cost of developing the
next generation (i.e. 3 years’ time) of the platform would be expensive.
Furthermore Symbian's biggest advantage, allowing the ability to build low
cost devices (low BOM) is gradually being eroded, both by improvements in
other platforms and by falling hardware component costs. Nokia was well
aware of these factors, which is why it planned for the introduction of a next
generation Linux based platform (Maemo/MeeGo).
This does not mean that Symbian no longer had any value. It had clear
potential to continue as a mid-tier platform for a significant period of time.
Indeed, by weight of numbers, it would have remained Nokia's primary
smartphone operating system for some time to come. However, it does mean,
especially in the light of the Qt connection, that its future was bound up with
Nokia's next generation Linux platform.
It's undeniable that the issues facing Symbian have been compounded
by a number of evolutionary and management decisions that, over the years,
became a ligature strangling the wider and continued development of the
operating system. It may be interesting to ask what might have been, but in
the context of Nokia's strategy decision, it is largely irrelevant.
The issues with Symbian described above led directly to the adoption
of Maemo as Nokia's platform for its next generation of 'smart' mobile
devices. This had been long planned, with Linux development starting as far
back as 2002. The acquisition of Trolltech in 2008 gave Nokia Qt, a much
improved developer environment, and the bridge it created between the two
operating systems allowed for a common ecosystem. Despite its cross
platform elegance, Qt presence in the mobile space is largely tied to that of
Symbian and MeeGo. While it can be ported to other mobile platforms, it
would never be the primary framework of those platforms.
At acquisition, Qt was not mobile-ready. Neither the Qt Mobility APIs or
QML and its related components have arrived quickly enough. The issues
around Symbian's legacy architecture are neatly illustrated by the amount of
time it took to integrate Qt into the platform. The time it took to bring Qt to
Maemo and MeeGo is harder to explain, especially given that Qt was already
running on Linux. On balance, the problem here lies more with integration
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into Nokia's software engineering culture and processes rather than the Qt
environment itself. With that said, it is important to note that Qt is not a magic
bullet, as is amply demonstrated by the failure of the Qt-based Orbit
(Symbian^4) and Direct UI (Maemo / MeeGo).
Maemo's (and subsequently MeeGo's) ambitions, open source
philosophy and technical architecture gave a level of reach and sophistication
that sat well with Nokia's ambitions of playing right across the market and
expanding into emergent disruptive markets.
The creation of the open source-based Maemo with a relatively small
engineering team was both admirable and impressive. However, the N900
clearly showed that this was not yet a platform that was ready for commercial
scale in either specification or design. Nokia threw engineering resources at
the problem, but adding engineers rarely leads to a directly proportional
decrease in development time. The merger with Moblin to create MeeGo gave
additional credibility, scale and engineering resources, but also added further
delays.
Put bluntly, MeeGo isn't yet ready for the role it was envisioned for.
How quickly this might be resolved is a matter for debate. The first device will
arrive this year, but it is unclear how quickly and how widely this could ramp
up. It is entirely possible that MeeGo might still be ready in a similar time
frame to the Windows Phone transition. But that does not matter; it is seen to
be a significant risk, especially given Nokia's track record in delivering on
software engineering targets. Ultimately, the market and Nokia investors are
likely to be more forgiving of a transition delay than another delay in current
strategy.
Ecosystem
Four years ago, drawing comparisons with the move to mobile
telecommunications in the 1980's, Nokia's leadership spoke of the need for
the company to transform itself into a ‘software and services' company. The
awareness of the need to build an array of services around its products was
realized and given shape in the form of the Ovi services portfolio.
Nokia was far sighted here, but it failed to fully deliver on its vision. In
retrospect, it was an unbelievably ambitious goal. It's hard to escape the
conclusion that Nokia had the right idea but failed to execute it properly.
Among the Ovi services, there have been some total failures, most obviously
N-Gage, but there are some notable highlights too. Ovi Maps is industry
leading and both Ovi Store and Ovi Music offer impressive geographic reach.
Nokia's overall performance in emerging markets, for example with Ovi Mail,
has been encouraging, but is largely restricted to Series 40 devices.
The biggest failure in the Ovi strategy is that Nokia fundamentally
underestimated the importance of third party applications. Ovi Store was slow
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to arrive at the start line of the app store race and the early implementation
was poor. While the implementation has improved markedly, it is still
fundamentally limited by an inadequate software catalogue, which is the
direct result of failing to fully connect with developers and build the services,
tools and platform requirements they needed to create a sustainable business.
In a similar way, Ovi Music has been put in the shade by Apple's iTunes.
Apple's iPod incumbency is a big factor here, but the failure to deliver a
comparable user experience (DRM, catalogue scope, ease of use) must also be
counted as a missed opportunity.
In choosing to continue with Symbian and MeeGo, a critical issue for
Nokia would be that their related ecosystem is already somewhat discredited,
overtaken by its competitors. The argument that past performance is a good
indicator for future performance may be unfair, but is hard to escape without
a visible change, such as that provided by transitioning to another platform.
Put simply, Nokia has a perception problem. As far as many companies are
concerned, especially that in the US, Nokia is not currently part of the
smartphone landscape. That's why we've not seen the Kindle app on Symbian,
it's why the vast majority of demos at this year's MWC were done on
an iPhone or Android device (a sharp contrast to five years ago) and it's why
the media, even in Nokia's European heartland, is dominated by its rivals.
But I think there's a bigger issue. As the elements that are
encompassed by the ecosystem definition expand, I believe it is becoming
very difficult, if not impossible, for any single company to build out a
complete ecosystem on its own, especially if they wish to address the entire
mobile market.
It is instructive that neither of Nokia's two major ecosystem
competitors try do everything themselves. Google has its manufacturing
partners and is missing some service offerings (e.g. music and video). Similarly
Apple, who in any case only serve a relatively narrow vertical market,
effectively outsources its manufacturing and brings in (for example) location
services from Google.
2. Android
The Business Case
With Nokia's market share heading downwards, it became fashionable
to suggest that Nokia should release an Android device. Android's greatest
advantage is that it offers an existing viable ecosystem. But the business logic
for Nokia going Android has never been clear. Nokia would be obliged to
surrender too much of the value and differentiation ability, most obviously in
services and advertising, to Google.
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A partnership between Nokia and Google would not have been one of
equals; choosing Android really would have been raising the white flag of
surrender. Nokia still believes it can significantly differentiate its devices from
its rivals, in large part by helping to build a cohesive and sustainable
ecosystem. The subtle difference between joining and helping to build an
ecosystem, and the associated value sharing that goes with each option, is
ultimately what made a Nokia tie up with Google highly unlikely.
Other factors, such as a lack of operator enthusiasm, ferocious
competition within Android, weaknesses in Android's architecture and
governance model, and potential legal complications may have also played a
role, but in my opinion Nokia would have found it difficult to look beyond the
basic business logic, before these and other issues had even begun to be
considered.
3. Windows Phone
Technology
Windows Phone 7 was launched at MWC in 2010, with the first devices
arriving on the market in October 2010. It represented a near complete break
from Microsoft's previous efforts in the mobile space. As such, it can be
regarded as a young platform, but it should be appreciated that some of the
underlying technology has a longer history.
Windows Phone 7 is based on the Windows Embedded Compact 7
core, the latest version of Microsoft's embedded operating system (previously
known as Windows CE). The operating system, especially in its more recent
versions, is generally well regarded and used in a very wide variety of
embedded devices.
On top of this core, sits the Windows Phone UI, codenamed Metro, and
associated software suite. The design language of Metro is a significant
departure from the traditional grid and list-based mobile UI. This directly
addresses the most common criticism that Nokia has faced with Symbian, that
of an inadequate UI/UX.
Nonetheless, the move to Windows Phone will be an abrupt change for
existing Nokia users and may not be universally welcomed. The path of
familiarity from Series 40 will also be lost, potentially making it harder for
Nokia to upgrade its mobile phone customers to its smartphones.
A more significant issue is that of the holes in Windows Phone
7's feature set, when compared to Symbian. The best known of these is the
absence of third party app multi-tasking, but other areas of concern
include VoIP support, video calling, tethering, HDMI,
Bluetooth serial, USB Mass Storage, USB OTG, custom ringtones, depth and
richness of API support, and more. We'll look at this specific area in more
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detail in a future article to highlight some of the work Nokia and Microsoft will
have to do to achieve a greater degree of feature parity.
At this stage, it not really possible to provide a full assessment of what
Windows Phone technology means for Nokia devices. That will only be
possible once the first Nokia Windows Phone devices arrive. However, in
general, a key performance indicator for Microsoft and Nokia will be whether
a consumer comparing the functionality of a new Nokia Windows Phone
device to an older Nokia Symbian device finds any major negative differences.
This includes not only definable feature requirements, but also more
subjective performance characteristics, such as battery life and software
stability.
Ecosystem
In the press releases announcing the Microsoft and Nokia partnership,
it is telling that, in their respective quotes, both Stephen Elop and
Steve Ballmer emphasized the ecosystem that the two companies could build
together. While the licensing of Windows Phone by Nokia is the starting point
for the partnership, it is quite clear that the ability to build an ecosystem
together was the driving force behind the deal.
The hardware and software parts of the deal are at first glance obvious,
with Nokia providing hardware and Microsoft providing the software.
However, it is important to appreciate that these are not indivisible
competencies. Microsoft will draw heavily of Nokia's expertise as it evolves
Windows Phone, especially as it seeks to move the operating system into
lower cost devices. Moving forward, a close working relationship on the
software engineering side, with contributions from both companies, will be
vital if the partnership is to reach its full potential.
At this point it is worth reminding ourselves of the significance of
Nokia's scale in the mobile device industry. As a company, Nokia touches
more consumers than any other and does so with that most personal of
products - the mobile phone. Scale is the single most vital prerequisite for a
viable ecosystem - it doesn't matter how good the products and services are if
you can't get them into peoples' hands.
In entering a strategic partnership Nokia and Microsoft are seeking to
combine different service assets to jointly build a sustainable and viable
ecosystem in mobile. So what are these respective contributions?
Nokia, because of its global focus, has done a far better job of taking
its services outside the core Western European and North American markets
than its competitors. This byproduct of Nokia's scale means that it has
significant infrastructural assets in key services areas. For example, Ovi Store
has billing arrangements with more than 100 operators in 34 countries.
Similarly, its Ovi Music service is operational in many more countries than
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Microsoft's Zune. Setting up the necessary licensing agreements and
infrastructure for these operations is a very significant time and financial
investment.
Nokia's biggest service contribution is its location assets in the form
of Navteq and Ovi Maps. The importance of the current generation of location
and mapping services is already well appreciated. But, more importantly,
location is also the key component underlying the trend towards contextual
awareness, which provides that vital bridge between the physical and digital
worlds, and will, in time, radically change the way we interact with technology.
Microsoft will be contributing its advertising assets. Microsoft's ad
Center will be used to serve advertising across search results and services on
Nokia devices. The two companies also specifically identified new advertising
opportunities related to local services as being significant. Given the rapidly
evolving business models being built around advertising, especially in the
mobile space, there is obviously scope for a great deal more here. Nokia has
tried to get into the advertising space before, with the Enpocket acquisition
and related Nokia Ad service, but was never able to gain any real traction. So
for Nokia, the potential new revenue stream could be one of the most
significant outcomes of the deal.
Microsoft will also contribute search (Bing) and gaming (Xbox)
services. Xbox, in particular, could be a significant draw for consumers and
there's a very real potential to provide console integration that none of the
competing ecosystems would be able to match easily.
There are also areas where both companies have similar existing
operations. The most obvious of these are in music (Ovi Music/Zune) and
developer services and their related app stores (Ovi Store/Marketplace).
Nokia and Microsoft have been curiously quiet on music services
details. During the partnership announcement and subsequent discussions,
neither music brand was directly mentioned, suggesting the details are still to
be worked out. Microsoft's Zune provides a more elegant user experience but
is only available in a limited number of countries. Nokia's Ovi Music is more
widely available and will need to be retained for Nokia's Series 40 devices.
Regardless of how the two services are amalgamated (or not), the companies
do have strong music assets in place.
The switch to Windows Phone means a switch to Microsoft's developer
environments (Silverlight and XNA) and associated tools. Microsoft has built a
business around providing excellent developer tools and support and its
current mobile offering is generally regarded as first rate. The switch to
Windows Phone is likely to attract developers who were previously unaware
of, or ignoring Nokia, but there is no denying that it will be painful for existing
Nokia developers.
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Both Microsoft and Nokia have extensive teams helping to support
their developer ecosystems. Both have their strengths and weaknesses. For
example, Nokia sometimes struggles to clearly communicate the credibility of
opportunities it offers, but has enjoyed success in building connections with
developers by connecting at a local level.
In terms of app stores, the details are also still being worked out, but it
looks like an Nokia branded store will live within the infrastructure of the
Windows Phone Marketplace. Content will be accepted by both Microsoft
(App Hub) and Nokia (though Ovi Publish).
The idea that Nokia's and Microsoft's service assets can be combined in
an ecosystem which is greater than the sum of its parts is beguiling. A great
deal will depend on execution and how well the two companies can mesh the
components together. Nonetheless the potential is clear - a combination of
Microsoft and Nokia offers the opportunity to create a very competitive
challenger in the mobile ecosystem war.
Differentiation
A critical factor for Nokia, regardless of platform, is the ability to
differentiate its phones from its competitors. After all, this is what persuades
someone to buy a Nokia device rather than a competing device.
At first glance, Windows Phone, with its limited customisation elements
and tight chassis specification, seems to offer only limited possibilities. The
most obvious of these is through Nokia's hardware design capabilities and
specialisms (e.g. imaging). On its own, this is a strong differentiating element,
but I believe there are three additional points that should be considered.
Firstly, during the strategy announcement, it was made clear that
additional chassis specifications (classes of devices) will be introduced,
catering for different and lower priced devices. Indeed, Nokia is likely to be
instrumental in helping author these specifications. Thus the limitations of the
chassis specifications are likely not a major concern.
Secondly, it was made clear that Nokia would have the ability to
customize any part of Windows. Intriguingly, Elop suggested that Nokia would
not necessarily do so; recognizing consistency within the Windows Phone
ecosystem could be a significant asset. That, of course, still leaves plenty of
room for a variety of Nokia-only applications and services. It seems
reasonable to think that a Nokia Windows Phone device might be able to
offer significant software and hardware advantages over a vanilla offering.
Thirdly, it is likely that Nokia will come to dominate the Windows
Phone device line up. It's not hard to imagine Nokia devices making up 80%
or more of Windows Phone shipments. That level of dominance will also give
Nokia the greatest voice in shaping the future of the platform and it clearly
becomes Microsoft's favored hardware partner. It's going to be interesting to
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see how Microsoft's other hardware partners react - there's a real possibility
that one or more of them will stop making Windows Phone devices, on the
basis that it is going to be hard to compete with a Nokia which has (now) fully
committed to the platform. It is not too much of a stretch to suggest that it
may get to the point where Nokia smartphones and Windows Phone become
almost synonymous with each other.
Critical to the ability to differentiate, is to ask what devices Nokia will
need to differentiate against. Elop made it clear that his number one priority is
to compete with Android. So the answer here is Android and, to a lesser
extent, iOS devices. Differentiating against these devices from within the
Windows Phone ecosystem is relatively easy. In other words, the competition
Nokia faces outside the Windows Phone ecosystem is a far bigger issue than
any competition it will face within it.
Contrast this situation with what would happen if Nokia went with
Android. It might still end up as the biggest player within Android, but it
would not be dominant and would face ferocious competition from within its
chosen ecosystem.
THE DECISION
The discussion around Nokia's smartphone strategy decision comes down to
this simple question: Could Nokia be successful in the smart devices space by
following a 'go it alone' strategy? There are two answers to this question, each of
which leads to a different strategy. If yes, continue the Symbian-MeeGo-Qt strategy.
If no, a strategic partnership with Microsoft and a switch to Windows Phone offers
the best way forward. In both cases, Nokia will need to improve upon its execution.
The trouble is that there are so many factors and uncertainties involved that it
is just not possible to give an absolute answer to the question above. To an extent, it
means the decision then comes down to assessing relative risk and potential return.
It is possible to make a strong case that Symbian-MeeGo-Qt remains a viable
option from a pure technology perspective; indeed, it may even be the most
technically advanced. Symbian's sophistication remains undiminished and
MeeGo's scope, philosophy and architecture seems well equipped to address
a multi device segment world. However, the ecosystem factor means that this is not
enough on its own.
In the smartphone space, who are Nokia's biggest competitors? Answer Google and Apple, and perhaps RIM too. The current competiveness of iOS,
Blackberry and Android devices is of course, in part, related to their hardware and
software functionality, but it does seem that their most significant difference to
Nokia is their surrounding ecosystems.
This lends heavyweight support to the argument that the smart devices space
has indeed become a battle of ecosystems. It means that to be competitive you have
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to have a viable and sustainable ecosystem and, as such, it becomes the critical factor
in deciding what strategy to follow.
Nokia's track record in building its own ecosystem has been mixed. With the
limited time available, it is difficult to see how it could change this on the scale
required to be competitive. Part of the problem here is that the ever increasing
competencies required to build an ecosystem make it difficult for any company to
succeed alone.
Participating in a jointly built ecosystem with Microsoft makes a lot of sense.
The companies are complimentary; with the obvious exception of mobile operating
systems themselves, there is surprisingly little overlap. Each company has assets that
the other needs - meaning that there's a mutual dependency and joint equity in the
ecosystem. Nokia becomes the dominant manufacturer in the ecosystem almost
immediately and is able to have meaningful differentiation from its main Android
and iOS competitors. As a secondary consideration, a joint approach also arguably
allows Nokia to concentrate on what it is best at, rather than spreading itself too
thinly.
So in assessing the relative risks and potential return between the two
strategies, my opinion is that by following the 'go it alone strategy' Nokia would see
a continued gradual decline in the face of intense competition and a less competitive
surrounding ecosystem. By contrast, partnering with Microsoft offers Nokia the
opportunity, although not the guarantee, to reverse its recent decline and potentially
return to its dominant position in mobile.
Undoubtedly, Nokia is taking a big gamble with its new smartphone
strategy. Inevitably, questions get raised around the wisdom of partnering with
Microsoft. Some of the concerns are addressed by appreciating that Microsoft is a
changed company in the light of the rise of Google and other competitors.
Furthermore, this is a partnership of a bigger scale and more equal footing than
anything else Microsoft has done in mobile. But I think there is another factor to
consider; namely that this strategic partnership is just as important for Microsoft as it
is for Nokia.
Nokia provides Microsoft with the swing factor; taking Microsoft from an also
ran to a serious challenger in the mobile ecosystem war. Bearing in mind the
important role mobile is certain to play in the evolution of the tech landscape over
the next decade, this is, for Microsoft, an almost priceless opportunity. If it can't
succeed with Nokia in mobile, it will not succeed with anyone. It's no exaggeration to
say a failure to perform in the mobile would have dire consequences for the future of
Microsoft as a whole. Nokia clearly are taking an enormous bet on their new strategy,
but I think the stakes are just as high for Microsoft.
Ultimately this mutual dependency is why I think Microsoft and Nokia will give
everything they can to make this partnership succeed. And it's why I think these two
giants will ultimately find success together.
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III.8 QUALITY PROCESS
Motorola had a commitment to quality in every aspect of product
development. This was demonstrated through a three-pronged approach: quality of
forethought, quality of workmanship, and quality of objective self-appraisal. In other
words, the quality program took into account all three stages of production: preproduction, production and post-production. This approach undoubtedly secured
Motorola's place at the forefront of American business for the next several years.
Before Six Sigma, quality levels were measured in percentages, or parts per
hundred. However, as modern technology grew more complex, it became clear that
older standards of quality no longer applied. Motorola invented Six Sigma to raise
the bar and focus the quality debate on parts per million, and in some cases, parts
per billion. Today, through Six Sigma, Motorola quality target is 99.99966%, or 3.4
defects per million opportunities. In other words, Motorola strive to optimize their
production processes by ensuring that there are six or less standard deviations within
the specifications of any given process.
As in the 1960s, Motorola still works to build quality into their products up
front. How-ever, the Six Sigma approach encompasses all of Motorola's internal
processes by providing a structural approach to continuous improvement. We think
of this as "six steps toward excellence." They include:






Identify the type of product or service you provide
Identify your customers and their requirements
Determine your needs and suppliers
Define the process for approaching and doing work
Eliminate defect sources and optimize processes
Continuously improve the Sigma level.
It is important to define tools that can be used to control the quality of the
application during development. Quality control is a continuous process that extends
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throughout the development process, and it should be possible to backtrack later to
identify the origin of mistakes that might have been made during the project.
Quality control tools include, for example, technical reviews and review
minutes, checklists, expert evaluations, and user feedback. The tools should be linked
to specific phases and outputs of the development process.
To evaluate quality, define specific and exact requirements for your application that
can be used as quality metrics. The metrics can require the following:

Reduction in the number and severity of errors, and improvements in the findings
of reviews and testing;

Improving the rate of success at meeting project deadlines and milestones;

Conforming to the requirement specification;

Responsiveness to feedback from external experts, including the evaluations of
usability experts.
In addition to testing and evaluating the product that is under development,
must do regularly evaluate the application development process itself. Audit the
existing process and gather feedback from the development team to determine
whether there is any need for change.
III.9 SIX SIGMA
Motorola is company with extensive Six Sigma programs, that certify their own
employeess. At Motorola Mobility, Motorola chose to take a “back to basics”
approach and focus on the essence of Six Sigma – the methodology used to delight
their customers by exceeding their expectations and delivering products and services
of the highest quality.
The Six Sigma program at Motorola Mobility is a grassroots effort where
individuals use the methodology to solve everyday problems in their functional
areas. Fostered by consistent and relevant training, and coupled with mentoring,
these individuals have been able to use a range of techniques – from simple
graphical tools to more complex analyses
Using the Six Sigma approach, Motorola is continuously working toward
capturing, measuring and eliminating defects in every process. Six Sigma also allows
us to maintain their focus on the processes, not the people. They believe that if
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processes are designed to be flawless, people will perform flawlessly using the
process.
What began as “Six Sigma” in 1986 has evolved at Motorola today into
“Digital Six Sigma.” Digital Six Sigma (DSS) is a management system with a business
improvement methodology that focuses on customer requirements, process
alignment, timely execution, etc. using applied statistical tools derived from Six
Sigma. The current DSS program integrates principles of traditional “Six Sigma” with
“Lean Tools.”
There are two main branches of DSS at Motorola today, namely, Six Sigma
Process Improvement (SSPI) and Six Sigma Product Development (SSPD). SSPI’s focus
is on eliminating waste and variation in business processes, while SSPD’s focus is on
robust new product development utilizing the Voice of the Customer.
Motorola’s DSS program encompasses all Motorola and is driven by the
company’s businesses. Basic training is available to all Motorola employees via
Quality IQ classes administered through Motorola University, while Green Belt and
Black Belt certification programs involve a rigorous nomination and review process.
Our DSS program enjoys total commitment from Motorola senior management.
III.10 COST OF QUALITY INDICATORS
Motorola views quality from a customer perspective, meaning they have only
one opportunity per each product they deliver to favorably impact a customer. If the
product doesn't meet expectations, they run the risk of losing that customer. It isn't
enough to simply meet industry averages--every single product that reaches a
customer should exhibit a uniform standard of quality.
From 1987 to 1999, the first twelve years of Six Sigma at Motorola, their
business saw significant results. By 1999, Motorola had eliminated 99.7% of all inprocess defects. The Cost of Poor Quality was reduced by more than 84% on a per
unit basis, and cumulative manufacturing cost savings totaled more than $18 billion.
At the same time, employee productivity increased dramatically--up 12% annually.
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III.11 SUPPLIER
Supplier is someone whose business is to supply a particular service or
commodity to company. Suppliers to Motorola Mobility include both production and
non-production suppliers. Their production suppliers manufacture components and
assemble their final products while our non-production suppliers provide them with
goods and services that do not go into our products.
On Motorola’s official site mentioned some of Motorola’s vendor in supply their
hardware, which is include to production supplier, they are:
1. Access IS
Access IS designs and manufactures data capture peripherals for desktop and
portable applications and is a global supplier of Optical Character Recognition
(OCR) readers to read the MRZ (machine readable zone) of travel documents
including passports, visas and identity cards. A family of snap-on MRZ reader
accessories has been developed specifically for the MC7x EDA range
2. Agora Leather Products
Agora Leather, founded in 1985, is a leading manufacturer of quality stock and
custom cases and components for OEM, business and industry.
3. Apriva
Apriva leads the way in wireless payment processing and secure mobile
communications. Customers benefit from fully-managed, end-to-end security
solutions that incorporate hardware, software and network infrastructure.
Apriva's Authentication Suite is integrated with many Motorola Solutions
devices to provide customers with highly secure communications and fully
authenticated users and fulfill essential government and corporate mandates
for data privacy and security.
4. ATP Electronics
ATP Electronics is a leading manufacturer of high performance, high quality
NAND flash memory solutions and DRAM memory modules. With over 20
years of experience in the design, manufacturing and support of memory
products, ATP continues to focus on mission-critical applications such as
industrial, telecom, medical and enterprise computing where high levels of
technical support, performance consistency and wide operating temperature
ranges are required.
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5. Brodit AB / ProClip USA, Inc
Brodit AB, manufacturer of ProClip in-vehicle charging holders/docking
cradles and dashboard mounts, offers uniquely designed solutions to mount
and charge electronic devices, such as mobile computers, mobile phones,
satellite radios, two-way radios, tablets, MP3 players and GPS navigation
systems in virtually any vehicle. The company's mission is to supply customers
with professional quality, secure and easy-to-install mounting solutions.
6. Brother Mobile Solutions
Brother Mobile Solutions offers mobile professional unique, robust printers
that meet the specific and complex needs of field service, public safety, route
accounting, manufacturing, health care and retail vertical markets. Worldwide,
Brother is a $5 billion group of companies, powered by excellent, home-grown
printing technology. Brother Mobile Solutions, based in Colorado, is a growing
team of mobility and labeling experts who tap into Brother's expertise in
printing, miniaturization and manufacturing to create the tools needed by
today's professionals.
7. Celio Corp
Celio Corp creates, defines and drives technologies that enable mobile devices
like smartphones/handheld computers and tablets to become the primary
mobile computing device.
8. Portsmith Technologies
The team at Portsmith Technologies has a shared vision of developing unique,
intelligent accessories for enterprise mobile computing devices and strives to
produce products that enable users of handheld mobile devices to maximize
the utility and value of their equipment. Portsmith Technologies experts take
great pride in the role they play in helping mobile professionals around the
world be more productive and successful every day.
9. Sinbon Technologies LLC
Sinbon Technologies is the U.S. division of Taiwan-based Sinbon Electronics.
Sinbon has established itself as a proven data capture industry cable supplier,
designing and manufacturing client-customized cable assembly solutions for a
global roster of technology clients.
10. Technology Solutions UK Ltd
Technology Solutions UK Ltd. specializes in embedded RF solutions and the
design and manufacturing of both embedded and snap-on accessories for
ruggedized handheld computer terminals. Key technologies include Radio
Frequency Identification (RFID), Contact Smart Card, Fingerprint Biometrics,
Bluetooth, GPRS/GSM and 1D and 2D laser barcode scanning.
11. Technische Informationssysteme GmbH (TIS)
The most outstanding hardware accessory of the TIS Plus accessory line for
Motorola devices is the TIS Trigger Handle - especially developed for use with
the Motorola flagship - MC95 series. This robust slide-on grip enables
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convenient and no-fatigue longterm handling while operating the MC95's
versatile features, such as WWAN- capability, integrated camera and featured
scanning - anywhere you need it and even under the toughest work and
weather conditions.
12. Vxi Corporation
VXi Corporation has been at the forefront of providing best-in-class
telecommunication and speech recognition solutions for contact centers,
offices and mobile professionals since 1989. From the company’s first noisecanceling microphone to its newest line of Unified Communications solutions,
VXi is known around the world for delivering value, excellence and innovation
to the market. VXi meets the highest global standards for product quality and
service, and its products are backed by the industry’s best warranties.
Working together with Global Alliance Partners, Nokia address customer
needs and identify new opportunities in areas such as IP connectivity, Mobile and
Network Security.
Nokia’s partners are global leaders in the IP industry, by pooling their
expertise, capabilities and knowledge, Nokia can deliver a wide range of end-to-end
solutions and an even better service to their customers. The suppliers are:
1. Juniper Networks
Their partnership with Juniper Networks in depth:
- Mobile Backhaul solution
- Mobile Site Connectivity
- Carrier Grade NAT (CG-NAT)
- LTE Transport Security
- Mobile and Evolved Packet Core Security
- Multiservice IP Backbone
2. Cisco Systems and NSN
Their partnership with Cisco Systems and NSN in depth:
- Mobile Backhaul
- Mobile Site Connectivity
- Multiservice IP Backbone
- LTE Transport Security
- Mobile and Evolved Packet Core Security
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III.12 SUPPLY CHAIN
Motorola Mobility is committed to achieving high standards in human rights,
labor, ethics, environmental protection, and health and safety in their supply chain.
This contributes to the quality of their products and their suppliers benefit from
better labor relations and more secure business relationships.
Suppliers to Motorola Mobility include both production and non-production
suppliers. Their production suppliers manufacture components and assemble their
final products while their non-production suppliers provide them with goods and
services that do not go into their products.
Their Supplier Code of Conduct is referenced in their supplier agreements as a
requirement of all suppliers. They take a multi-pronged approach to helping their
suppliers improve their labor and environmental performance. This includes
assessing and monitoring suppliers as well as providing programs to help suppliers
develop the capability to improve their own performance over the long term.
Motorola’s Supplier Code of Conduct is referenced in their supplier
agreements as a requirement of all suppliers. They take a multi-pronged approach to
helping their suppliers improve their labor and environmental performance. This
includes assessing and monitoring suppliers as well as providing programs to help
suppliers develop the capability to improve their own performance over the long
term.
As a major global company, Nokia interact with thousands of suppliers every
day. This gives them a great responsibility and they’re committed to ensuring that
the highest standards of corporate responsibility are exercised.
As Nokia operate our own global manufacturing network, most manufacturing
is done in-house complying with our strict internal social and environmental
requirements. The first tier of their supplier network starts after their own
manufacturing network.
Nokia supply chain consists of around a hundred direct suppliers for
hardware, components and parts, as well as hundreds of software suppliers. They
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also work with thousands of indirect suppliers who provide services and equipment
needed for their daily operations.
Nokia’s global supply chain begins with raw material extraction and
processing, and ends with the manufacturing of components and final product
assembly and distribution.
There are typically four to eight supplier layers between mining activities and
Nokia’s assembly factories. Nokia’s supply chain is a network of companies in
multiple tiers spread around the world. It delivers goods and services to our own
production sites as well as to our offices worldwide.
III.13 EFFICIENCY / EFFECTIVENESS LINKED TO THE PERFORMANCE
Motorola is implementing their efficiency performance through their delivery.
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Nokia is implementing the efficiency through their energy efficiency in their
company performance.
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III.14 ENVIRONMENTAL ACTIVITIES
If we look from official site of Motorola’s Inc, we can know that they are very
notice with the environment. They doing their operations and produce their product
based on its impact to their environment. They do several environmental activities
based on their operations and product, there are:
1. Operations and the Environment
a. Green buildings
Recognizing that their buildings offer significant opportunities to
reduce their environmental impact, Motorola Mobility’s EHS department,
in conjunction with Real Estate and Workplace Services (REWS), is
implementing a Green Building strategy across their operations
worldwide. The strategy is based on Leadership in Energy and
Environmental Design (LEED) standards for existing buildings, which
provide guidance on sustainable site development, sustainable
purchasing, water and energy efficiency, use of materials, indoor air
quality and innovation in operations
They use green procurement and green cleaning guidelines to set
targets for their sites to purchase environmentally responsible paper and
office products, IT equipment, furniture, lighting, and janitorial and
cleaning supplies.
b. Energy and climate change
ENERGY
At Motorola Mobility, they are working hard to shrink their energy use
and carbon footprint. By doing so, they can improve efficiency, cut costs,
and honor their corporate responsibility commitments. They approach this
challenge by focusing on efficiency and on sourcing energy from clean
renewable sources such as wind power. They have set energy and
greenhouse gas reduction goals for 2011-2016.
ENERGY EFFICIENCY
Energy Use
Energy Use*
2011
2012
Year Over Year
271.2
252.2
7% Decrease
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(Million KwH)
CLIMATE CHANGE
Motorola Mobility recognizes that climate change is one of the greatest
challenges facing the world. They believe addressing this challenge will
require concerted effort by governments, business, civil society and
consumers.
They are playing their part by:
 Cutting the impact of their operations through energy efficiency
measures and renewable energy purchases
 Improving the energy efficiency of their product range
Motorola Mobility measures its carbon footprint according to the
scope 1 and 2 emissions defined by the Greenhouse Gas Protocol, the
leading international greenhouse gas (GHG) accounting standard. By
measuring their global emissions they set a baseline for emission reduction
goals and activities
c. Waste
Motorola has a dual strategy toward waste management. They seek
both to reduce the overall amount of waste they generate at their
manufacturing facilities and office buildings and to increase the amount of
waste we recycle.
2011
2012
Year over year
change
Non-hazardous
waste
Hazardous waste
12,591
11,667
7% decrease
138
248
80% increase*
Total Waste
12,729
11,915
6% decrease
Total waste
1.75
1.70
3% decrease
normalized by
floor space
(tonnes/1000 ft2)
*The increase in hazardous waste was due to a reclassification of waste to
be handled as a hazardous waste for their manufacturing facility in Taiwan.
d. Water and other impact
Their electronics manufacturing processes use very little water. Most
water use at their sites is in dining facilities and restrooms, as well as in
building cooling systems. In 2011, they set a company-wide water use
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reduction goal and pursued a number of water savings projects at sites
around the world
2011
2012
Year over year
change
Total water use
(cubic meters
Total water use
normalized by
floor space
(cubic
meters/1000ft2)
1.15 million
1.06 million
8% decrease
159.9
150.5
6% decrease
2. Products and the environment
a. Mobile devices
Every new mobile phone and accessory they design is assessed for
compliance with materials regulations, energy performance and packaging
minimization. Their entire mobile device product range is now free
from brominated flame retardants (BFR) and contains no PVC or
phthalates.
b. Materials and compliance
Motorola working to reduce the amount of potentially hazardous
substances in their products and to find environmentally sound
alternatives, while maintaining performance and quality. They have a
continuing program to research and monitor independent scientific
reviews of the environmental and health impacts of materials. The result is
a growing list of product restrictions and environmentally sound
alternatives.
They voluntarily extended our compliance with the European Union
and China directives on the restriction of hazardous substances (RoHS) to
all mobile phones and mobile phone accessories regardless of where they
are sold worldwide.
Using recycled plastic reduces consumption of natural resources,
reduces carbon emissions from materials manufacturing and prevents
waste. It also encourages recycling by creating a market for used materials.
Motorola developed 25 percent post-consumer recycled plastic from water
bottles for use in select products.
In 2011, CTIA (the international association for the wireless
telecommunications industry) set a goal that by the year 2015, 25 percent
of phones sold in the U.S. market will be built with recycled plastic content.
Motorola Mobility is an active participant in the CTIA Green Working
Group that developed the goal and is working toward its accomplishment.
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c. Packaging
Motorola take a holistic approach to packaging development involving
cross-functional collaboration between their teams. The principle of
“Reduce - Reuse – Recycle” drives their packaging innovation, as well as
compliance initiatives.
Motorola Mobility’s Global Packaging team works hand in hand with
their carrier partners to reduce the weight and volume of their retail
packaging while expanding the use of recycled materials. Wherever
possible, they design and engineer their product packaging with
“minimizing environmental impact” as an integral part of their design
brief.
Motorola Mobility supports the CTIA Green Packaging
guidelines. Examples of current packaging initiatives include:
 Use of FSC certified paper
 Use of water-based adhesives
 Use of 100 percent recycled content pulp packaging parts, replacing
plastic parts
 Use of soy/vegetable based inks as well as zero VOC UV inks
 Program-to-program reduction initiatives
 Increasing packaging density per pallet
d. Recycling
Motorola Mobility operates take back programs on their own and in
partnership with carriers, customers, retailers and recyclers. They depend
on the end user to participate in their recycling programs
By law, they are required to take-back and recycle their products in 30
countries in the European Union and the European Economic Area. Their
commitment goes beyond legislation and has worldwide reach. They offer
programs for mobile phones in approximately 60 countries. Their takeback programs accept any mobile phone or accessory (not only our
products). Some phones are refurbished for reuse and then sent to
developing countries where they are sold at a low price, helping to boost
access to communications.
Motorola seek to design their products to be easily recycled. Many
used phones are still in good condition and can be refurbished. Those that
cannot be reused can be recycled, which reduces waste and the use of raw
materials to make new phones. Their mobile phones meet or exceed the
European (WEE) directive recyclability target of 65 percent
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Nokia improves their offices, factories, logistical operations and use of
technologies in ways that save energy and reduce emissions. And they aim to ensure
that sound environmental, health and safety, labour and ethical practices are
embedded within all their operations.
1. Smarter Manufacturing
Nokia manufacture their phones primarily in their own factories and apply the
highest standards to ensure safe and supportive labor conditions. Proximity to
suppliers and partners also brings environmental benefits. Nokia’s Xingwang
Industrial Park in China, a cluster of facilities including them and 12 partners, has
achieved an annual decrease in energy consumption equivalent to nearly 45,000
tonnes of coal as well as water conservation of half a million tonnes.
2. Eco choices at factories
3. Ensuring materials used in our products come from socially and
environmentally responsible sources
In line with Nokia Natural Resources Policy, Nokia wants to ensure that all
materials used in their products come from socially and environmentally
responsible sources. For fiber based printing and packaging materials they aim is
to use 100% certified renewable or recycled materials by 2015. They accept
certifications by Forest Stewardship Council (FSC) and / or The Program for the
Endorsement of Forest Certification (PEFC) with priority on the former. They also
target to use at least 70% of recycled fibers on an average across all packaging.
4. Saying no to waste
They’ve made great improvements in increasing the utilization of waste,
meaning reuse, recycling and energy recovery. Today, five out of seven Nokia
factories have reached 100% waste utilization or are within 1% of that target. In
2012, they reduced their total waste by 30% from 2011, resulting in 31,400 tonnes
of waste in total. Key to their improvement in this has been the selection of
vendors with good solutions for waste utilization. Additionally, they’ve increased
internal awareness of waste segregation among their employees.
5. Green logistics
They’re working on ways to streamline logistics and reduce their impact
through packaging efficiency, in-transport packaging efficiency, alternative
transportation modes and engagement with their operator customers.
6. Eco in choices in logistic
7. Eco choices at offices
They look at the energy consumption and greenhouse gas emissions of their
products and operations and set reduction targets accordingly. While Nokia is not
a particularly energy intensive company, they’ve still made major improvements.
In 2012, they occupied more than 450 facilities around the world, including
nine production sites. About 20% of these buildings result in 90% of the total
environmental impact, so these sites are where they focus on improving their
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efficiency initiatives, and new ways of thinking about how they can use space
effectively. Compared to 2011, C02 emissions from their facilities decreased by
14%, and over a third (41%) of the energy they use to power their operations is
renewable.
III.15 ENVIRONMENTAL PLAN FOR THE FUTURE
Motorola Mobility has set ambitious long-term objectives to guide their
operational sustainability efforts as well as specific goals to reduce our energy and
climate impact, thier water use and the waste they produce.
These efforts are good for business as well as the environment. Reducing the
energy and natural resources we consume can also improve operational efficiency
and cut costs.
2016 Goals
Maintaining their focus on environmental excellence, Motorola mobility has set
challenging goals for their first five years as a new company. By 2016, they aim to
reduce from 2011 levels:





Absolute greenhouse gas emissions by 10 percent
Greenhouse gas emissions normalized to floor space by 15 percent
Water use normalized to floor space by 10 percent
Total waste (hazardous and non-hazardous) normalized to floor space by 10
percent
Increase our purchase of electricity from renewable sources to 50 percent by
2016
MOTOROLA’S VISION
To guide their thinking and actions on Motorola Mobility’s contribution to
sustainable development, they have set the following long-term objectives for their
company worldwide:
 Zero waste: Reuse or recycle all waste materials generated during the lifecycle
of our products
 Benign emissions: At our manufacturing sites, phase out all emissions that are
harmful to the environment
 Closed loop: Introduce a 360-degree recycling loop for all products and
processes to conserve natural resources
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


Zero occupational injuries and illnesses: Achieve and maintain an injury-free
workplace
Green energy: Maximize energy efficiency and use of renewable energy sources
such as wind and solar power
Product stewardship: Design all products to ensure customer safety and
environmental protection
The goal of the Nokia Environmental Management System is to improve their
environmental performance, focusing on:

energy consumption

water consumption

air emissions

waste management

packaging
III.16 ENVIRONMENTAL BENEFITS
From environmental activities that have been Motorola implemented affect
some benefits for their company, environment also planet. Some benefits from their
environmental activities are:
 By working hard to shrink their energy use and carbon footprint, they can
improve efficiency, cut costs, and honor their corporate responsibility
commitments.
 Using energy more efficiently across their operations and facilities, it helps
them in their commitment to tackling climate change, and it enables them to
introduce operational efficiencies that in turn reduce costs, benefiting their
bottom line.
 Their strong focus on building efficiency also help them manage the risk of
rising energy prices and be well prepared for potential future regulations.
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

Measuring their operational greenhouse gas emissions provides a baseline for
them to improve against, and is critical to identifying opportunities to reduce
emissions.
Using recycled plastic reduces consumption of natural resources, reduces
carbon emissions from materials manufacturing and prevents waste. It also
encourages recycling by creating a market for used materials.
Nokia see clear business benefit in minimizing the environmental impact and
enhancing the social impact of their operations – from cutting our energy costs to
enhancing their brand. Some of the benefits are:
1. Smarter manufacturing by Nokia has decreased in energy consumption
2. Ensuring the materials used, they use renewable material and recycled
fiber means that they support in reduce the amount of logging and reduce
the garbage that can’t be composed
3. By in increasing the utilization of waste, they’ve reduce their total waste
4. By implementing Eco choices at their office, Nokia have reduced C02
emissions from their facilities
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CONCLUSION
Motorola is a pioneer in 6-sigma program in early 80s and is a benchmark for
others. They are losing out cell phone business to Nokia in the world market since
about 2001-2002. After being acquired by Google, in my opinion their name is
haven’t be able to beat its competitor, Nokia which is have been joined with
Microsoft. I think Motorola’s product quality is good because they’re the pioneer of
6-Sigma until now, but for company growth the quality is not the one and only
factor, marketing is become important too to make the name of company being
remembered by market.
I am not the expert in technology, but I much rarelier see any commercial of
Motorola in comparison to Nokia’s commercials on Polish TV. Maybe that is the case.
Motorola has somehow limited themselves to some markets. I do not look for
amusement from cell-phones, but I know with which Nokia’s phones I can
play games, send images, make a word document, edit photo, install many
applications, etc. I do not know so much about Motorola’s phones, their models and
exellence eventough they’ve acquired by Google.
“Quality does not mean that the strategy is ‘right’”. This is the most important
part and many people think Six Sigma should be the magic for business success. It is
the program for process success, if done properly. So, if 6-Sigma done properly, I
think to make the products being known by market, company also must have strong
marketing department. That’s I think Nokia do better than Motorola, they can
marketing their products well rather than Motorola.
Not only good on marketing department function, I think Nokia’s phones refer
not only to communication but also they refer in many cases to amusement so many
young (probably the biggest part of the market) prefer their phones to Motorola’s .
“Nokia’s phones are cool – says commercial”. That is the basic fundamental that
Nokia has banked on. They had decided that they would cater to their customer’s
tastes rather than quality, while not totally avoiding quality.
I mean, who would want a phone that works perfectly for 10 years?, I am sure
all of us would want to a newer and a more reliable model soon, which Nokia
constantly churns out while Motorola decided in favor of quality and that’s why their
mobile phones look so staid and might I add so out of fashion.
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We also can see from the newer products that have been released by
Motorola also Nokia. Motorola just launced two kinds of smartphone, they are Moto
X and Moto G, both of them I think have stiff models, but Nokia have released many
kinds of Lumia with different kinds of models also price.
Being supported with cool design and strong advertisement I think Nokia still
beat Motorola until now. Eventhough its position still under Apple and Samsung, but
Nokia still have a position above Motorola.
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REFERENCES
http://responsibility.motorola.com/
http://responsibility.motorola.com/index.php/environment/
http://www.motorolasolutions.com/USEN/Channel+Partners/Independent_Hardware_Vendor_IHV_Program/Providers
http://responsibility.motorola.com/index.php/suppliers/
http://www.supplychaindigital.com/procurement/motorolas-six-sigma-journey-inpursuit-of-perfection
http://www.qualitymag.com/articles/84187-motorola-a-tradition-of-quality
http://www.processexcellencenetwork.com/people-performance-and-change-inprocess-improveme/articles/the-legend-of-motorola-embracing-the-next-generati/
http://pure.au.dk/portal/files/53734147/Nokia_marketing_strategy.pdf
http://www.scribd.com/doc/19039775/Nokia
http://www.nokia.com/global/about-nokia/people-and-planet/supply-chain/supplychain/
http://www.allaboutmeego.com/features/item/12622_Understanding_Nokias_smartp
hon.php
http://www.nokia.com/global/about-nokia/people-andplanet/operations/operations/
http://www.nokia.com/global/about-nokia/people-and-planet/strategy/ems/emsand-policy/
http://developer.nokia.com/Develop/Development_process/
http://www.isixsigma.com/topic/what-is-going-wrong-with-motorola-inc/
http://www.slideshare.net/AprielManik/pt-nokia
http://www.plantcalculator.motorolasolutions.com/
http://www.motorolasolutions.com/web/Business/Solutions/Trucking_Logistics/Logis
ticsSolutions/static_files/110715+Road+Transport_nv.pdf
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