Motorola Knowledge-Based Manufacturing
Sonora Sourcing Case Study
August 15, 2006
Wendy Vittori
Motorola Inc., Embedded Communications Computing
Agenda
Motorola – Embedded Communications Computing - Background
The Situation
The Solution
Results
Additional Information
Embedded Communications Computing
Our Products and Solutions
Our Position in Motorola
Motorola, Inc.
Computer Industry
Ed Zander, Chairman and Chief Executive Officer
Cellular /
Handheld
Computers
we call
“computers”
Embedded
Infrastructure
Signal and Image Processing
Mobile Devices
Data Switching and Transaction
Processing
Connected
Home
Networks and Enterprise
Personal
Communications
Cellular Networks
Energy Systems
Seamless Mobility
Devices
iDEN Networks
MOTOwi4 Wireless Broadband
Network Services and Applications
Management
Cable and Satellite
Wireline Networks
Connected Home
Telecom Video
iRadio
Commercial, Government and Industrial
Solutions
Global Relations and Resources
Motorola Application-Enabling Platforms & Building Blocks
 DRILL DOWN
 DRILL DOWN
Our Global Operations
Tempe, AZ, US
Group
Headquarters
Bangalore, India
Sunnyvale, CA,
US
Nogales,
Mexico
Munich, Germany
European
Headquarters
Loughborough, UK
Our Position in the Industry
Motorola Ranked #1
“The highest ranked vendor by the TEMs in this
study, Motorola has a comprehensive portfolio of open
standards-based communications server offerings,
which it delivers out of its Embedded Communications
Computing business unit. Motorola has been a
driving force in the telco industry’s evolution to
standards-based communications servers…”
The Yankee Group
Marlborough, MA,
US
Hyderabad, India
 DRILL DOWN
Embedded Communications Computing
Standards-Based Communications Servers for Telecommunications:
Market Drivers, Inhibitors, Perceptions and Rankings
January, 2006
 DRILL DOWN
Motorola General Business Information, Embedded Communications Computing Overview, Q2/2006.
MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office. All other product or service names are the property of their respective owners. © Motorola, Inc. 2006.
The Situation
CEM Manufacturing in China (Shanghai)
Key decision factor: Low labor costs
Requirements:
 Extensive training to expedite knowledge and experience transfer
 “Exact replica” of ECC’s Plant in Tempe
Motorola
Microsystems
Inception
2003
1988
1981
2002
Renamed as
Motorola Computer
Group (MCG)
2004
Today
2005
Assessment of Shanghai Operations
Results:
 Late deliveries and decreasing product quality impact
customer satisfaction
 Rising production costs
Main Causes:
 ECC’s highly complex products required continuous
engineering support
 Customized products and short production runs
increased costs
 High manufacturing turnover rate
 Time zone differences
 Culture and language barriers
Motorola General Business Information, Embedded Communications Computing Overview, Q2/2006.
MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office. All other product or service names are the property of their respective owners. © Motorola, Inc. 2006.
The Solution
Assessment of Manufacturing Alternatives
Motorola
Microsystems
Inception
CEM Manufacturing
in China (Shanghai)
2003
1988
1981
Key Options:
Outsource manufacturing
Internal production: Tempe (AZ), Nogales (Sonora,
Mexico), Asia
Evaluation Criteria:
Internal Factors: Human resources, time zone
compatibility, product complexity, cost
External Factors: Ease of imports and exports, ease of
business operations, government incentives, access to
education, infrastructure, and others
2004
2005
2002
Renamed as
Motorola Computer
Group (MCG)
Today
Assessment of
Shanghai
Operations
Transference of
Operations to Nogales
(Mexico)
Critical Decision Factors
Our manufacturing process:
High Mix – Low Volume
Close working relationship
between engineering centers
and manufacturing site
Production close to customers
and within same trade zone
Risk reduction through
diversification
Motorola General Business Information, Embedded Communications Computing Overview, Q2/2006.
MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office. All other product or service names are the property of their respective owners. © Motorola, Inc. 2006.
Results
Improvement in operational results, especially in product quality and TTM
Additional benefits expected from regional development initiatives:
Nogales Port of Entry -- Hours of Operation
Free and Secure Trade (FAST) Program
SENTRI Program
Nogales Arizona Development
Motorola General Business Information, Embedded Communications Computing Overview, Q2/2006.
MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office. All other product or service names are the property of their respective owners. © Motorola, Inc. 2006.
Additional Information
To access the Motorola Case Study, please visit Tecnológico de Monterrey
website http://www.gda.itesm.mx/cic/. After registering, access the Case
Catalogue (Catálogo de Casos). The case can be found under the Information
and Technology Systems (Sistemas de Información y Tecnología) section; it is
available in both Spanish and English.
For further information, please contact one of the following parties:
Dr. Jorge A. González González
Director del Centro Internacional de Casos
Instituto para el Desarrollo Empresarial
Tecnológico de Monterrey, Campus Guadalajara
Tel.: 52 (33) 3669 3000, ext. 3908.
Enlace intercampus: 80-432-3908.
E-mail: jgonza@itesm.mx
Carola Venot-De-Suárez
Strategic Planning
Office: (602) 438-3437,
E-mail: carola@motorola.com
Motorola Inc., Embedded Communications
Computing
2900 S. Diablo Way, Tempe, AZ 85282 U.S.A.
Motorola General Business Information, Embedded Communications Computing Overview, Q2/2006.
MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office. All other product or service names are the property of their respective owners. © Motorola, Inc. 2006.
Backup Slides
Motorola General Business Information, Embedded Communications Computing Overview, Q2/2006.
MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office. All other product or service names are the property of their respective owners. © Motorola, Inc. 2006.
The Future of Communications is
Seamless Mobility
The promise of converged communications
Voice and data on multiple devices, delivered
uninterrupted across multiple networks
User experience will be transformed by
new applications and the ability to connect
to anyone, anytime, anywhere
Motorola is enabling OEMs to increase
market share by providing complete
communications server solutions that
accelerate time-to-revenue for seamless
mobility applications
Motorola General Business Information, Embedded Communications Computing Overview, Q2/2006.
MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office. All other product or service names are the property of their respective owners. © Motorola, Inc. 2006.
Accelerating Development of
Communications Server Ecosystem
Leading the efforts to define and accelerate the
adoption of communications servers through key
industry associations
▪ Motorola founding member of Communications Platform Trade Association
▪ Premier member of Intel Communications Alliance
Motorola Communications Server Alliance
▪ Validate 3rd party products with Motorola’s communications servers
Promoting standards-based technology to
encourage third-party application development
and create the next generation ecosystem
Motorola General Business Information, Embedded Communications Computing Overview, Q2/2006.
MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office. All other product or service names are the property of their respective owners. © Motorola, Inc. 2006.
Predictive Sourcing
Sourcing
Methodology
Business Strategy
Core Value and
Differentiators
Shows how sourcing decisions affect core values to create competitive
advantage
Delivers both decreased costs and long-term growth
Motorola General Business Information, Embedded Communications Computing Overview, Q2/2006.
MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office. All other product or service names are the property of their respective owners. © Motorola, Inc. 2006.
Four Steps To Predictive Sourcing
From sourcing through delivery
Cost Considerations
Includes shipping, handling, quality,
logistics management
Engineering throughout product lifecycle
Innovation
Core Competency
Competitive Advantages
Environmental
Assessment
New, differentiating capabilities drives
profit
Cost-based competitive advantage is fleeting
Avoid short-term savings that harm long-term
advantage
Consider entire value chain
Assess both internal and external elements
Motorola General Business Information, Embedded Communications Computing Overview, Q2/2006.
MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office. All other product or service names are the property of their respective owners. © Motorola, Inc. 2006.
Drill Downs
Motorola General Business Information, Embedded Communications Computing Overview, Q2/2006.
MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office. All other product or service names are the property of their respective owners. © Motorola, Inc. 2006.
Communications Computing Solutions
+ 20 Years Leading Embedded Infrastructure Computing
Computer Industry
Computers
we call
“computers”
Cellular /
Handheld
Motorola, Nokia
HP, Palm, Sony
Signal and Image Processing
Medical Imaging, Aero, Defense, Industrial Automation
GE Medical Systems, Raytheon, Applied Materials
Embedded
Infrastructure
Laptop, PC /
Server
Dell, HP, IBM
Data Switching and Transaction
Processing
Networking, Telecomm, Storage
Nokia, Alcatel, Lucent, Motorola, Nortel
Motorola Application-Enabling Platforms & Building Blocks
Motorola General Business Information, Embedded Communications Computing Overview, Q2/2006.
MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office. All other product or service names are the property of their respective owners. © Motorola, Inc. 2006.
RETURN 
Communications Computing Solutions
Components
Macrocomponents
PMC, PrPMC, PTMC and
AMC modules
Board-level building
blocks
Computing and
communication singleboard computers and
blades in VMEbus,
CompactPCI, and
AdvancedTCA form
factors
Application-Enabling Platforms
Pre-integrated and pre-tested
carrier-grade platform solutions
+
=
+
Software building
blocks
Enabling software that
makes it easier to use and
integrate our boards and
platforms.
+
Platform-level
building blocks
Carrier-grade
platforms based on
open standards
Motorola General Business Information, Embedded Communications Computing Overview, Q2/2006.
MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office. All other product or service names are the property of their respective owners. © Motorola, Inc. 2006.
RETURN 
Embedded Communications Computing
Global Operations
Tempe, AZ
Group Headquarters
Munich, Germany
ECC European Headquarters
Bangalore, India
Sunnyvale, CA, USA
Nogales, Mexico
Marlborough, MA
Loughborough, UK
Motorola General Business Information, Embedded Communications Computing Overview, Q2/2006.
MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office. All other product or service names are the property of their respective owners. © Motorola, Inc. 2006.
Hyderabad, India
RETURN 
Motorola Business Structure*
Motorola, Inc.
Ed Zander, Chairman and Chief Executive Officer
Mobile Devices
Personal
Communications
Energy Systems
Seamless Mobility
Devices
Networks and Enterprise
Cellular Networks
MOTOwi4 Wireless Broadband
iDEN Networks
Network Services and Applications
Management
Connected
Home
Cable and Satellite
Wireline Networks
Connected Home
Telecom Video
iRadio
Commercial, Government and Industrial
Solutions
Global Relations and Resources
Embedded Communications Computing
Motorola General Business Information, Embedded Communications Computing Overview, Q2/2006.
MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office. All other product or service names are the property of their respective owners. © Motorola, Inc. 2006.
* Does not include functional units (HR/Finance/Legal/Facilities/Security) or the CTO office
Aligning With Seamless Mobility
RETURN 
Motorola Ranked #1
“The highest ranked vendor by the TEMs in this study,
Motorola has a comprehensive portfolio of open
standards-based communications server offerings,
which it delivers out of its Embedded Communications
Computing business unit. Motorola has been a driving
force in the telco industry’s evolution to standardsbased communications servers…”
Motorola Press Release
March 22, 2006
The Yankee Group
Standards-Based Communications Servers
for Telecommunications: Market Drivers,
Inhibitors, Perceptions and Rankings
January, 2006
Motorola General Business Information, Embedded Communications Computing Overview, Q2/2006.
MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office. All other product or service names are the property of their respective owners. © Motorola, Inc. 2006.
RETURN 
Volume
(Number of Products)
Production Automation Types
High
Mix
Automation
Flexible
Automation
Medium
Low
Mass
Customization
Small Batch
(SemiAutomation)
Manual
Methods
Low
Medium
High
Mix
(Number of Components)
Motorola General Business Information, Embedded Communications Computing Overview, Q2/2006.
MOTOROLA and the Stylized M Logo are registered in the US Patent & Trademark Office. All other product or service names are the property of their respective owners. © Motorola, Inc. 2006.
RETURN 