Motorola Corporation: a History of Quality Management

MOTOROLA CORPORATION – A HISTORY OF QUALITY MANAGEMENT Ivan Ortiz Illinois [email protected] com 630-699-3264 GM 588 Managing Quality Instructor Robert Lee August, 2011 Keller School of Management Introduction The Motorola Corporation was founded in 1928 when its’ Owners Paul and Joseph Galvin decided to start a business in the area of battery storage. Paul was interested in improving on the technological advances that had taken place to date in that field. As a result, his motivation and hard work allowed investments to be made in the manufacturing industry toward the promotion of that product.

The first device made and marketed by the company was a power converter designed to allow battery-powered radios to run on household electricity. Afterwards, and learning on the successes of their product the first production car radio was successfully designed and marketed toward the consumer during the 1930’s. Then, as a result of business savvy operations and an intelligent staff Motorola Corporation continued on its quest for technological innovations for the succeeding eight decades. In fact, the public company rose to become a pioneer in the electronics communications market.

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The group currently is a publicly traded communications company which employs 120,000 workers and its total revenues are $17 billion. Its’ core products include integrated circuits and cell phones worldwide. Motorola Corporation continues to be committed to sound ethical standards through their supply chains awhile improving social and environmental conditions in the electronics industry, at the same time maintaining the superior quality of products. Problem Statement For many years, Motorola Corporation has held a tradition of performing top quality work in the electronics market.

Its reputation for great customer service, technological advances, and continuing education for its workforce has resulted in acceptance of numerous awards from the electronics industry, including the Malcolm Baldridge Award for Quality. In fact, the company has invested heavily on a revolutionary quality management system named Six Sigma. It is designed to promote precision and predictability when business issues arise and cannot be handled otherwise. How important is quality to the long-term effects of company operations?

Can it be an underlying philosophy that summarizes the corporate strategic business plan? The basic framework of customer satisfaction is as important to Motorola as continuous quality improvements. As such, the paradigm created an exhibit that as quality improves cost decreases. That is because there is less rework that has to be accomplished which decreases production costs and places the company on a much higher competitive plane. In addition, the managerial teams are trained to identify the different perceptions of their environments.

Therefore, they will research more about the capabilities of Motorola competitors and learn why and how the products and services provided function as they do. As a result, the corporation had profited so much money since its inception that by 2005 their net revenues rose to $36 billion. Unfortunately, recent confirmation has developed suggesting to the company’s oversight in not proving a ‘zero defects’ policy for suppliers’ quality procedures with respect to domestic and or international operations.

As a result, numerous site audits have been performed in order to provide an assessment for accuracy of actual conditions. These major internal and external quality control failures (domestic and international) are a costly estimate in order to remedy. In 2004, the Motorola Corporation invested $2. 1 billion in supplier diversity initiatives. As a result, this study proposes the execution of an effective Supplier Quality Assurance agenda to facilitate and minimize supplier management accountability and responsibility issues. Literature Review

What type of management initiatives and policies must be set in place for an organization to be successful in product development such as that of Motorola? First and foremost the culture must be driven and conform to the vision and wishes of its leader(s). Also, the employees must enjoy their work and understand that achievements are earned through hard work and perseverance. That in turn leads to productivity gains and profits for those involved. Finally, as the group increases market shares and grows into a conglomerate over a period of time employees are satisfied in personally taking part in the progression of the company.

However, in order for success to continue management must constantly strive to determine the correct equilibrium by aligning the company’s vision and strategy. In fact, one of the group’s biggest feats was to allow the left-brain, analytical side of Six Sigma to coexist alongside the right-brain creative process without disrupting it (Crockett, R. O. , 2006). Using the Six Sigma approach, Motorola is continually working toward capturing, measuring, and eliminating defects in every method during processes.

For example, the defect rate, the management process, the improvement tools, and the foundation for culture and values are areas to be focused on. The management philosophy specifically centers on four factors: the emphasis on statistical science and measurement, a rigorous and structured training deployment plan (Black belt, green belt, Champion) a project-focused approach with a single set of problem-solving techniques such as DMAIC (define, measure, analyze, improve, and control), and reinforcement of Juran tenets (top management leadership, continuous education and annual savings plan) (Basu, R. 004). Once upon a time Motorola Corporation based and measured its’ innate yet excellent service levels as percentages. As modern technology emerged a new and more accurate process control system was needed in order to optimize quality standards. There are several factors that can determine this, for example the balanced scorecard management method gauges whether resources are meeting the planned objectives in order to increase the company’s operating performance.

On the other hand, the method may not work due to inaccurate data collected or misinformation presented by those involved. It is possible that managers may not find the appropriate essentials to remedy something that may have a great impact on company operations. That is why other details should be sought in designing effective performance measurement initiatives that have the potential to increase quality and cost savings. Motorola’s quality philosophy. Motorola’s total quality management (TQM) system was first used during the 1950’s and became popular during the 1980’s.

Currently, its’ premise is based on the company culture and worker attitude toward successful assignments in developing products for customers. Initially, it commences at the lowest levels of workers and emerges through the executive levels of management. TQM focuses on both employee and management involvement in continuous achievements and improvements toward client satisfaction by working as cohesive units. In fact, to empower and enable people is to give them the authority to improve performance and lesson errors at their discretions (Waterman, B. 993). Control must be given to those who are expected to ultimately make the physical and mental sacrifice to help grow the company toward success endeavors. In this fashion, the worker is rewarded and trained to progress toward the quality in management. If the system is designed to concentrate and center on people issues than it can be assumed that creating and integrating the right dynamic will increase customer satisfaction. The scheme may incorporate flexibility and fluidity when society is included in the organization’s success.

However, it does contain drawbacks that inherently affect a group when poor strategies are implemented. Therefore, a commitment to quality must begin at the top if achievements are to be accomplished. Due to global regulation in trying to improve issues such as social responsibility and ethics, Motorola Corporation and other major companies (i. e. AT&T, Xerox, Microsoft, etc. ) have embarked on a project to revolutionize the auditing process for its suppliers.

It is named the Supplier Audit Confirmation (SAC) and it is a program designed to improve the standards, testing, and certification methods of all partied involved (Zuckerman, A. 1995). Let it be clear, in that the complexities are evident in the scale and scope of supply chain management operations and consumer goods. For example, it may involve multiple industries with varying technological domains, such as electronics and telecommunication services. In addition, some common trends affecting supply chain issues include the global distribution of commerce and consolidation of groups through mergers and acquisitions.

As a result, the trends lead to highly competitive and geographically spread businesses which produce an amalgamation of components toward the industry. Currently, a number of obstacles have to be gauged in determining a successful supply chain management program: these include a lack of awareness for sustainability issues, the compartmentalization of tasks between various departments and difficulty in breaking down traditional boundaries, difficulties in changing corporate culture (especially with respect to international companies which are often nherited by its host nation), strong business focus on supply change management and a lack of drivers to convince senior management of the importance for sustainability issues, and a lack of experts and centers of expertise which have a good grasp of the concepts (Charter, M. , Kielkiewicz-Young, A. , Young, A. , Hughes, A. , 2001). One method in the auditing process used for Motorola suppliers includes tools and methods specifically geared towards the supply chain management realm.

For example, supplier assessment and evaluation programs are scopes included within the business agreement to ensure quality standards and production quality requirements are met to improve performance measures. If used a strong overall control system will lower external audit expenses, provide tighter control over a group’s assets, and provide more reliable data-driven information for use in financial decision making. Another issue suggests that lead companies seek new sources of advantage across a chain by outsourcing responsibilities to main suppliers.

For example, hire someone with innovative ideas that can foster new developments for the company. Also, lead companies and Tier 1 suppliers set the standard for commodities that extend beyond the price range into performance standards. For example, develop strict quality requirements set for specifications, cost profiles, and delivery methods and schedules. The distinct identities used for operational principles are replaced by codes of conduct which extend to standards of environmental, ethical, and employment practice. The lead companies continually monitor supplier conformance that provide clear data on operational performance.

They also establish supplier associations to support development and promote knowledge sharing (Rhodes, E. , Warren, J. P. , Carter, R. , 2006). In its quest to streamline operations and improve on profitability Motorola Corporation focused on the elimination and redundancy of functions like sourcing, manufacturing, and logistics across different business units. They centered on standardizing processes like supplier management so that every business unit used the same methodology to calculate and monitor its assets, suppliers, and manufacturing performances (Tohamy, N. 2006). In addition, Motorola emphasizes that is the responsibility of their suppliers to implement, manage, and enforce standardized code of conduct. In addition, the suppliers must take a stringent approach to ethical and environmental issues in ensuring code compliance (SOMO, 2008). Analysis Today, many successful companies fail to materialize due to their unproven management approaches, particularly chosen in business field. As we all know, the current market sector world is more complex and continuously evolving with varying processes.

Therefore, well-designed organizational planning should be addressed from a strategic standpoint insofar as quality assurance. In this manner, accurate techniques are used in understanding and managing work in the multifaceted world of commerce. Let it be known that customer service and problem satisfaction is a key approach to successful business operations. In fact, knowing one’s customers and understanding their want and needs is fundamental in understanding the human psyche toward happiness. However, it all commences internally within the company workforce by actively seeking input from sources on how to better improve performances.

By empowering the employees, companies display to them a sense of trust and loyalty. In that sense, workers feel proud to have been given the opportunity to positively contribute to the mission and vision of their employer. The worker will tend to contribute more to his/her job when they are given assignments that make sense. In other words, when tasked by their supervisors the employee personally becomes involved by ‘direct contact’ and plays a key role in the development of company objectives. By designing action plans and implementing procedures the employee will obtain a superior experience.

Especially if the process management quality tool used is Six Sigma or Total Quality Management. When either one is used the main goal is to provide a strategy in which on-going manageable processes are used in limiting the number of variations and defects. As a result, re-occurring work is limited and therefore saves the company money. In addition, corporate suppliers are highly encouraged to follow codes of conduct to manage their respective environments. This can be done by way of microscopic methods used which can significantly exert more control over the company.

Motorola’s ultimate goal is to ensure that strategic goals are successful in emerging markets. It requires a supply chain that is efficient, flexible, and focuses on the customer’s needs. Recommendations I believe the quality management initiative is to continue using the Six Sigma approach. It is a strict method to maintain and expect company employees and suppliers to uphold but ultimately it will pay off financially. The Total Quality Management System is great as well because it focuses on all company personnel in adhering to continuous achievements and improvements toward the benefit of the customer.

TQM gives control to the employee and allows him a certain level of autonomy and responsibility in developing methods. As a result, they feel empowered and unrestricted in creating products and services toward client satisfaction. The balanced scorecard method is also highly encouraged to use as a guide in determining the level of success achieved throughout. My recommendations are based on the extensive research time I invested in knowing more about the quality improvement programs implemented and managed by Motorola Corporation. The company is very serious in conducting domestic and international business successfully.

As such, their approach in developing a sound and centralized supply chain only increases their profitability in the market sector. Reflection Motorola Corporation executives must show a strong and sustained effort in seeking new and improved techniques to further the business. They must also ensure a devotion to discovering and tracking measurable data by proposing solutions to outstanding issues. Perhaps, by setting benchmarks the company can reassure its clients of a concerted effort to avoid deviations in assessing products and services.

As stated previously, the ultimate goal of the group is to please the customer. If Motorola views quality from a customer’s perspective than the opportunity arises where a positive impact must be made toward the satisfaction of the client. Otherwise, they run the risk of losing the business from the patron. In fact, superior service and quality should be the central focus of a strategic plan if a company is to flourish. In addition, the customer’s expectations should be fully met by delivering high-quality products that are priced competitively.

The company should mold the client’s perceptions by creating an environment of trust through communication and engagement. A binding agreement must be made to ensure improvements are constantly being made through internal channels in order to improve a customer gratification. At Motorola, they periodically measure happy consumers by asking for input in creating action plans and incorporating methods that will deliver a great experience to the client. As a result, Motorola Corporation demonstrates originality by gaining buyer loyalty, faith, and conviction in providing positive business delivery results.

However, its supplier chain must demonstrate its ability to adhere to codes of conduct. They must maintain, manage, and utilize quality standards that allow them to become competitive businesses. Their strategies should focus on customer needs and satisfaction awhile inducing a product within a positive work environment. In this manner, the supplier can be recognized as a source of high quality input and can therefore partner with others to become international/domestic successes. As a result, the company can become competitive and potentially grow in nature.

References Crockett, R. O. (2006, Dec. 4). Six Sigma still pays off at Motorola. Businessweek, 50 Basu, R. (2004). The Hierarchy of Quality. Implementing Quality, First Edition, pg. 14 Waterman, B. (1993). Does Total Quality apply to Knowledge Work? Absolutely! Journal for Quality & Participation, 10409602, Oct/Nov96, Vol. 19(6) Zuckerman, A. (1995). Move to Revolutionize Supplier/Quality Auditing. Electronic News, 10616624, 10/23/95, Vol. 41, Issue 2088 Charter, M. , Kielkiewicz-Young, A. , Young, A. , Hughes, A. (2001).

Supply Chain Strategy and Evaluation. The Sigma Project- R&D Report, Ch. 4. 3(4. 3. 7- iv), pg. 68 Rhodes, E. , Warren, J. P. , Carter, R. (2006). From Supply Chains to Total Product Systems. Supply Chains and Total Product Systems: A Reader, Ch. 1(1. 1), pg. 21 Tohamy, N. (2006). Introspection Points to a Breakdown in Culture and Supply Chain. Case Study: Motorola’s Quest for Supply Chain Excellence, Ch. 2, pg. 4 SOMO Mobile Connections (2008). Supply Chain Policies of the Major Brand Companies. Supply Chain Responsibility of 5 Mobile Phone Companies, pg. 4

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