Motorola asic division case study

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Motorola asic division case study

Case Motorola Inc final Part A: The case study further examines the organisation of the division in detail; the division consists of product engineering department deals with customer complaints and technical aspects of the manufacture, the development of software related to manufacture and carrying out feasibility studyproduction planning department schedules customer ordersmarketing department identifies initial prospects, forecast sales and quote pricenew product department gives estimate of production cost and translates customer specifications into productsQuality assurance department responsible for quality of the product, operate not as inspectors but work in liaison with other departments to identify the main problem due to which rejection occurredManufacturing department involved with actual manufacturing processes.

Motorola asic division case study

The manufacturing system is divided into 6 steps with each requiring extensive record keeping. With the help of pictorial representation it represents the lay out chandler plant The ASIC facility for production.

It also examines the cause of large inventories and how the standard cost system operates and the reasons why it cannot be taken in to use to its maximum as well as the problems faced by the management to gather data of 29 cost centres organise them and represent them meaningfully with the help of standard costing.

The 9 cells of the factory are defined starting from assembly preparation up to its storage in warehouse or when it is shipped out. It was noted that not all chips manufactured went through the Motorola asic division case study manufacturing process some chips did not under go the same procedure.

The case study describes all the processes in detail and with the help of pictorial representations it demonstrates its U-shaped path and what type of chips undergoes a certain process.

Lastly it discusses the concern of controller regarding the role of the management control system about the systems capabilities Motorola asic division case study the method by which the new system of JIT should be incorporated. This was in place even before the formation of the division but the formation of the division made it easier with the specific new product development department in the ASIC division.

The market which the division was targeting to serve was a rapidly changing one with each computer manufacturer trying to differentiate their product. So it was important for them to have Integrated circuits which complement their systems excellently and were unique to them so that it can differentiate their product giving them an edge over their competitors.

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As discussed above, the market to which the division caters was a rapidly changing one. So it was extremely important that the products delivered were not only on time but also in the shortest time possible. This means that the time taken for a product to be delivered i.

This is primarily because for customers quick development time is of immense importance due to rapid introduction of new products in their markets. Timely deliveries were also important as some customers like Hewlett-Packard were developing just-in-time systems and any problem with the delivery time would result in their production system to come to a stand still.

Does a traditional standard cost system address these key success factors? Traditional standard cost system itself has many problems which creates a lot of difficulties in the simple production systems. As stated Material, labour, and overhead standards were updated twice a year and these were often obsolete because of the dynamic environment and the steep learning curves.

As discussed, short times to reach consumers from time query was done and quick delivery times is one of the key success factors but the standard cost system that changes twice a year will not be able to take account of this.

The products developed are unique to customers a lot of times that means a lot of learning issues will arise as a number of new products would have been manufactured around the year.


Thus, the overheads are allocated according to labour hours which itself is affected by learning, so with uncertainty around the basis in itself it would be unwise to allocate overhead in the competitive environment the ASIC division is operating.

In addition, as estimated 8 to 12 percent of the labours productive time was spent on record keeping which was partly because standard cost system was being used, again raising the cost not only because of labour time being wasted but also due to method of overhead allocation.

Although the cost is not of primary importance for the customers still if there is more than acceptable difference in the prices because of standard cost than the customer might be forced to reconsider their decision. This also hinders the achievement of key success factor; shortening lead and delivery times as if this time taken in record keeping if spent in production, the lead time and the production time can possibly be lessened from what it already is.

What are good measures of these key success factors? A good measure for innovations, that is, number of new products developed during a period, as per customer specifications, can be by comparing the number of new products developed during the year by the number of existing products.

This can also be done as in comparison of previous years, that is, number of new products developed during current year as compared to number of products developed in previous years.

This measure might not be as helpful as it may trigger the quest for development of new products ignoring existing profitable products or the products that were developed and whose production commenced at the end of previous year. Such products have practically just been developed and would have been profitable but if this ratio is predominantly used, it should be used as its importance cannot be denied, than the important factors, as assessed, can be ignored.

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Innovations as compared to industry standards, if available, can also be useful.By Dr. Phil Garrou, Contributing Editor The IC industry “poker championship” is down to the last table. The IC industry started out like a poker championship tournament.

Hundreds of players, through the years, put up their entry fee to compete (i.e. paying for their fabs) and the competition began.

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Motorola has achieved over$ 5. 5 billion in sales, employed over 99, people and spent $ million in research and development. 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 -Case Analysis 1) What are the key success factors for Motorola's ASIC Division?

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