1. Motorola Knowledge-Based Manufacturing
Sonora Sourcing Case Study
August 15, 2006
Wendy Vittori Motorola Inc., Embedded Communications Computing

2. Agenda Motorola – Embedded Communications Computing - Background
The Situation
The Solution
Results
Additional Information

3. Embedded Communications Computing
Our Products and Solutions
Our Position in Motorola
 DRILL DOWN
 DRILL DOWN
Our Global Operations
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
Standards-Based Communications Servers for Telecommunications: Market Drivers, Inhibitors, Perceptions and Rankings
January, 2006
 DRILL DOWN
 DRILL DOWN

4. 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
1988
2003
2004
Today
1981
2002
2005
Renamed as Motorola Computer Group (MCG)
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

5. The Solution Assessment of Manufacturing Alternatives
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
Motorola Microsystems Inception
CEM Manufacturing in China (Shanghai)
1988
2003
2004
Today
1981
2002
2005
Renamed as Motorola Computer Group (MCG)
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

6. 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

7. Additional Information
To access the Motorola Case Study, please visit Tecnológico de Monterrey website 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) , ext
Enlace intercampus:
Carola Venot-De-Suárez
Strategic Planning
Office: (602) ,
Motorola Inc., Embedded Communications Computing
2900 S. Diablo Way, Tempe, AZ U.S.A.

8. Backup Slides

9. 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
Industry in transition
The challenge of linking people, information and devices simply and reliably, known as converged communications or seamless mobility places the communications industry at a crossroads. For service providers, the objective is to deliver seamless mobility efficiently and profitably, integrating traditional and next-generation services. For equipment manufacturers, taking advantage of potential new revenues and increased profits means delivering new applications faster and much more cost-effectively.
These scenarios illuminate the challenges of converged communications:
Mobile phone users not only talk on the phone, but also send and receive , monitor stock transactions in real time, receive instant sports results, browse the Internet, watch TV programs, and take and transmit digital photos.
Medical professionals transmit graphics-intensive diagnostic information (e.g., CAT or PET scans, MRI, X-rays) to distant specialists and require quick analysis and response.
Military “drone” airplanes fly over conflict situations and send graphical data back to commanders who have to analyze the data instantly to make battlefield decisions.
Life sciences researchers share huge data sets of information about the molecular design and expected behavior of newly developed pharmaceutical agents.
To meet this demand profitably, and build a sustainable competitive advantage, all the players in the communications value chain need a new way to create and maintain converged network infrastructures.

10. 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
Leading the ecosystem
Founding member Communications Platforms Trade Association
Premier (Gold) member Intel Communications Alliance
We have established the Motorola Communications Server Alliance to validate qualified program participants’ products to be pre-tested and validated to work with Motorola’s communications servers. This will help both Motorola and its communications server customers to develop and deploy their new products faster and more cost-efficiently.
Leadership roles in key standards development organizations
PICMG – ATCA, AMC, MicroTCA
OSDL – Carrier Grade Linux
Service Availability Forum – HA Middleware and Systems Management
Establishing technology directions for Motorola product portfolio
Ethernet as fabric for ATCA-based platforms
PCI-Express for Next Generation VME

11. Core Value and Differentiators
Predictive Sourcing
Sourcing Methodology
Business Strategy
Core Value and Differentiators
Predictive Sourcing:
“Sourcing methodology that will not only satisfy the near-term cost concerns but also position the organization for long-term operational success and profitability”.
Objectives:
Controlling Supply Chain expenses
Reducing long-term costs associated with manufacturing
Critical challenge: To maintain innovation capabilities (core engineering and knowledge-based manufacturing skills) at core operations in North America. That is, to maintain intellectual capital necessary to sustain and economically viable organization
Shows how sourcing decisions affect core values to create competitive advantage
Delivers both decreased costs and long-term growth

12. Four Steps To Predictive Sourcing
Cost Considerations
From sourcing through delivery
Includes shipping, handling, quality, logistics management
Innovation
Engineering throughout product lifecycle
New, differentiating capabilities drives profit
Core Competency
Competitive Advantages
Cost-based competitive advantage is fleeting
Avoid short-term savings that harm long-term advantage
Environmental
Assessment
Consider entire value chain
Assess both internal and external elements

13. Drill Downs

14. Embedded Infrastructure
Communications Computing Solutions + 20 Years Leading Embedded Infrastructure Computing
Computer Industry
Computers
we call “computers”
Laptop, PC / Server
Dell, HP, IBM
Cellular /
Handheld
Motorola, Nokia
HP, Palm, Sony
Embedded Infrastructure
Signal and Image Processing
Data Switching and Transaction Processing
Within the Embedded Infrastructure Industries, ECC is well recognized by equipment manufacturers as the leader in embedded computing solutions. ECC traditionally provided a wide range of application-enabling building blocks and platforms into major telecom customers, such as Alcatel, Nortel, and Motorola for various switching and processing applications.
These same products have also been used for signal & image processing and control applications such as those in Defense & Aerospace and in Industrial Automation.
Medical Imaging, Aero, Defense, Industrial Automation
GE Medical Systems, Raytheon, Applied Materials
Networking, Telecomm, Storage
Nokia, Alcatel, Lucent, Motorola, Nortel
Motorola Application-Enabling Platforms & Building Blocks
RETURN 

15. Communications Computing Solutions Components
Application-Enabling Platforms
Pre-integrated and pre-tested carrier-grade platform solutions
Macrocomponents
PMC, PrPMC, PTMC and AMC modules
Board-level building blocks
Computing and communication single-board computers and blades in VMEbus, CompactPCI, and AdvancedTCA form factors + = +
Motorola can supply the optimum platform for a wide range of embedded computing applications.
Macrocomponents
Whether you're looking to create your own baseboard around a standard processor module, or add a processor for computing or communications functions to a single-board computer, processor PMCs and PTMCs present new "macrocomponent" options for off-the-shelf design.
Board-level building blocks
Motorola offers board-level building blocks in a variety of form factors – VMEbus, CompactPCI® and AdvancedTCA™ . Each form factor has features and capabilities that fit particular groups of applications. However, they all share common characteristics of scaleable modular construction, high performance + data throughput and rugged reliability.
Platform-level building blocks
Platform-level building blocks are based on CompactPCI or AdvancedTCA technology. They can be tailored to meet the needs of specific applications by adding the appropriate payload of additional control processors, telecom resource boards and enabling software building blocks.
Application-Enabled Platforms
A new class of embedded computing solutions – application enabled platforms – is designed to help equipment manufacturers to get to market much faster with your own end products.
Platform-level building blocks
Carrier-grade platforms based on open standards +
Software building blocks
Enabling software that makes it easier to use and integrate our boards and platforms.
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16. Embedded Communications Computing Global Operations
Tempe, AZ
Group Headquarters
Munich, Germany
ECC European Headquarters
Sunnyvale, CA, USA
Bangalore, India
Motorola Computer Group’s worldwide headquarters in Tempe, Arizona is one of the world's leading facilities for the research and development of embedded computing technology and is acknowledged as a TL 9000 registered organization.
A European headquarters in Munich, Germany, helps the group to deliver high levels of support for European customers.
In addition to these facilities, Motorola Computer Group has an extensive network of local sales offices and distribution partners around the world.
Nogales, Mexico
Loughborough, UK
Hyderabad, India
Marlborough, MA
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17. Motorola Business Structure* Aligning With Seamless Mobility
Personal Communications
Energy Systems
Seamless Mobility Devices
Cellular Networks
MOTOwi4 Wireless Broadband
iDEN Networks
Network Services and Applications Management
Commercial, Government and Industrial Solutions
Global Relations and Resources
Embedded Communications Computing
Cable and Satellite
Wireline Networks
Connected Home
Telecom Video
iRadio
Mobile Devices
Connected
Home
Motorola, Inc.
Ed Zander, Chairman and Chief Executive Officer
Networks and Enterprise
* Does not include functional units (HR/Finance/Legal/Facilities/Security) or the CTO office
Important to stress that Embedded Communications Computing is an independent business unit serving the embedded communications computing needs of many industries.
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18. Motorola Press Release
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…”
Motorola Press Release
March 22, 2006
The Yankee Group
Standards-Based Communications Servers
for Telecommunications: Market Drivers,
Inhibitors, Perceptions and Rankings
January, 2006
RETURN 

19. Production Automation Types
Mix Automation
Mass Customization
High
(Number of Products)
Volume
Flexible Automation
Medium
Small Batch (Semi-Automation)
Manual Methods
Low
Low
Medium
High
Mix
(Number of Components)
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