1. ©1987-2000 Arthur M. Schneiderman All Rights Reserved. Slide 1 APICS/Babson College Presentation January 17, 1989 Arthur M. Schneiderman Title

2. ©1987-2000 Arthur M. Schneiderman All Rights Reserved. Slide 2 c. 1989-APICS-1 ANALOG DEVICES AT A GLANCE Headquartered in Norwood Massachusetts Publicly Held (NYSE Symbol ADI) $439 Million in Sales (FY1988) 49% of Sales Outside United States 5400 Employees Worldwide

3. ©1987-2000 Arthur M. Schneiderman All Rights Reserved. Slide 3 c. 1989-PREZ-3 Serves the Data Acquisition Market by designing manufacturing marketing Products Used in Precision Measurement and Control Applications

4. ©1987-2000 Arthur M. Schneiderman All Rights Reserved. Slide 4 c. 1989-PREZ-2 Types of Products monolithic IC's hybrid IC's assembled products sub-systems

5. ©1987-2000 Arthur M. Schneiderman All Rights Reserved. Slide 5 c. 1989-PREZ- 1988 Worldwide Sales by Geographic Area US Asia Europe

6. ©1987-2000 Arthur M. Schneiderman All Rights Reserved. Slide 6 c. 1989-PREZ-9 R&D Investments % of Revenues $ Millions 15 0 5 10 70 60 50 40 30 20 10 0 1984 1985 1986 19871988

7. ©1987-2000 Arthur M. Schneiderman All Rights Reserved. Slide 7 c. 1989 Financial Model FY 1987-FY 1992 Sales Growth20-25 %/yr Operating Profits17 % Profit after Tax9.4 % Return on Capital15.0 %

8. ©1987-2000 Arthur M. Schneiderman All Rights Reserved. Slide 8 c. 1989 CUSTOMERS EMPLOYEES STOCKHOLDERS ADI's BUSINESS OBJECTIVES ADI’S CONSTITUENCIES

9. ©1987-2000 Arthur M. Schneiderman All Rights Reserved. Slide 9 5/15/88-5w_1h.doc I keep six honest serving men (They taught me all I knew); Their names are WHAT and WHY and WHEN And HOW and WHERE and WHO Rudyard Kipling 1902

10. ©1987-2000 Arthur M. Schneiderman All Rights Reserved. Slide 10 8/1/88-08018-1t.doc rev: 8/2/88 ADI QUALITY IMPROVEMENT PROCESS WHY:Identify what's important for business success WHAT:Develop a complete set of surrogate metrics WHEN:Set goals using improvement curves / half-lives WHO:Assign responsibility / controllability HOW:Provide needed resources WHERE:Track results, quarterly, annual, 5 year -------------------------- Generate feedback: variance -> root cause -> corrective action Incent / Reward

11. ©1987-2000 Arthur M. Schneiderman All Rights Reserved. Slide 11 c. 1989-QIP-15 ADI CORPORATE QIP COUNCIL Jerry Fishman Kozo Imai Larry LaFranchi Bill Manning Art Schneiderman, Chairman Ray Stata Graham Sterling Tom Urwin MEMBERS: CHARTER: QIP Goals Deployment QIP Organization priorities Training Juran Monitoring metrics Incenting/Rewarding Suzanne Thomson Executive VP VP, Japanese Operations Corporate Controller Division GM VP, Quality/Productivity Improvement Chairman of the Board and President VP VP, European Operations Director, Training & Development Goodloe Suttler Division GM

12. ©1987-2000 Arthur M. Schneiderman All Rights Reserved. Slide 12 c. 1989-AMS_5 ADI QIP GOALS BUSINESS OBJECTIVES: MARKET LEADERSHIP (RMS) REVENUE GROWTH PROFITABILITY DRIVERS:BE RATED #1 BY OUR CUSTOMERS IN TOTAL VALUE DELIVERED EXTERNAL LEVERS:PRODUCTS DEFECT LEVELS ON TIME DELIVERY LEADTIME INTERNAL LEVERS:TIME TO MARKET PROCESS PPM MANUFACTURING CYCLE TIME YIELD

13. ©1987-2000 Arthur M. Schneiderman All Rights Reserved. Slide 13 c. 1989-QS-16B ADI QIP GOALS IC OPERATIONS, ESTABLISHED PRODUCTS METRIC1987 HALF-LIFE 1992 On time delivery Lead time Manufacturing Cycle Time Yield Outgoing defect levels Time to Market EXTERNAL INTERNAL CORPORATE-WIDE COST MANAGEMENT WHILE AGGRESSIVELY PURSUING Process Defect Levels 85% 10 wks 500 PPM 9 9 9 >99.8% <10 PPM <3 wks 15 wks 20% 9 9>50% 5000 PPM6 <10 PPM 4-5wks 36 mths 24 6 mths

14. ©1987-2000 Arthur M. Schneiderman All Rights Reserved. Slide 14 c. 1987-QP-4 Goals Deployment and Tracking QIP Goals Financial Goals External: Internal: On-time Responsibility Lateness Lead time On-time Responsibility Lateness Lead time TTM Revenues Revenue Growth Revenues Revenue Growth Revenue Model Revenue Model Profit ROA Profit ROA NPBR NPB # Intros NPBR NPB # Intros Yield Process PPM Paperwork reduction Turnover Cost reduction Cost QUARTERLY SCORECARD ANNUAL BENCHMARK ANNUAL STRATEGIC REVIEW # NP Peak Time to peak Decay PPM Mfg cycle time

15. ©1987-2000 Arthur M. Schneiderman All Rights Reserved. Slide 15 c. 1989

16. ©1987-2000 Arthur M. Schneiderman All Rights Reserved. Slide 16 c. Sept 88 Oct 86 Nov 86 Dec 86 Jan 87 Feb 87 Mar 87 Apr 87 May 87 Jun 87 Jul 87 Aug 87 Sep 87 Oct 87 Nov 87 Dec 87 Jan 88 Feb 88 Mar 88 Apr 88 May 88 Jun 88 Jul 88 Aug 88 Sep 88 half life - months 100 1 10 ADS

17. ©1987-2000 Arthur M. Schneiderman All Rights Reserved. Slide 17 c. 1988-bhmk-3 Q1 89 ACTBHMK Q2 89 ACTBHMK Q3 89 ACTBHMK FINANCIAL NP INTROS NP BOOKINGS NPBR NP AVG. 3 RD YEAR REV. TIME TO MARKET NEW PRODUCTS Q4 89 ACTBHMK FY 89 ACTBHMK FY 88 ACT QIP I.C. PRODUCTS ASSEMBLED PRODUCTS REVENUE REVENUE GROWTH PROFIT ROA. ON TIME DELIVERY OUTGOING PPM LEADTIME COST EMPL. PRODUCTIVITY DIRECT TURNOVER INDIRECT TURNOVER PROCESS PPM CYCLE TIME YIELD PROCESS PPM CYCLE TIME YIELD 16.415.414.513.617.6 94.2% 5.2 222 95.4% 4.7 176 CORPORATE SCORECARD 96.4% 4.4 140 97.1% 4.1 111 92.7% 5.8 280 2327 38.6% 6.2 1847 46.8% 5.8 1466 53.6% 5.6 1163 59.4% 4.8 NA 92.1% 3.8 NA 93.4% 3.5 NA 94.4% 2.8 2932 28.8% 6.6 NA 88.8% 4.6 NA 90.6% 4.1

18. ©1987-2000 Arthur M. Schneiderman All Rights Reserved. Slide 18 12/12/88-CMD Allied Signal, AiResearch Kodak Gould Compugraphic General Electric Reliance Electric Tektronix – FDI Tektronix – TV M/A COM Eaton Marquette Elec Rockwell / Collins Teradyne Bendix, Avionics Masscomp Trillium Honeywell, Mil. Av. Hewlett Packard Texas Inst. Apollo AT&T Rockwell, Air Trans. Perkin Elmer On Time Delivery, Customer Measured %NotOnTime%NotOnTime Feb 87 7 Mar 87 8 Apr 87 8 May 87 9 Jun 87 9 Jul 87 8 Aug 87 10 Sep 87 10 Oct 87 9 Nov 87 11 Dec 87 10 Jan 88 15 Feb 88 16 Mar 88 17 Apr 88 15 May 88 14 Jun 88 12 Jul 88 12 Aug 88 11 Sep 88 13 Oct 88 5 Half Life = 12 Months 100 10 1 Actual Data Regression of Data Companies Per Data Point

19. ©1987-2000 Arthur M. Schneiderman All Rights Reserved. Slide 19 12/12/88-CMQ Perkin Elmer (LAR) Texas Inst. (LAR) Honeywell, Mil Av (LAR) Bendix, Avionics (LAR) Rockwell, Collins (1.0-QCI) Marquette Elec (QUALITY) Eaton (QUALITY) Loral (QUALITY) M/A-COM (QUALITY) General Electric (LAR) Compugraphic (LAR) Martin Marietta (LAR) Allied Signal, Flt Sy (LAR) Apollo (LAR) Kodak (LAR) Allied-Signal, AiRes (LAR) Quality, Customer Measured (Lot Reject Rate) %LotsRejected%LotsRejected Feb 87 3 Mar 87 3 Apr 87 5 May 87 5 Jun 87 5 Jul 87 5 Aug 87 7 Sep 87 7 Oct 87 6 Nov 87 8 Dec 87 7 Jan 88 12 Feb 88 13 Mar 88 13 Apr 88 12 May 88 11 Jun 88 11 Jul 88 11 Aug 88 9 Sep 88 9 Oct 88 4 Half Life = 8 Months 100 10 1 Actual Data Regression of Data Companies Per Data Point

20. ©1987-2000 Arthur M. Schneiderman All Rights Reserved. Slide 20 c. Sept 88 Oct 86 Nov 86 Dec 86 Jan 87 Feb 87 Mar 87 Apr 87 May 87 Jun 87 Jul 87 Aug 87 Sep 87 Oct 87 Nov 87 Dec 87 Jan 88 Feb 88 Mar 88 Apr 88 May 88 Jun 88 Jul 88 Aug 88 Sep 88 half life - months 100 1 10 BV

21. ©1987-2000 Arthur M. Schneiderman All Rights Reserved. Slide 21 3/3/89-CMD Customers in database Allied Signal Apollo AT&T Bendix Compugraphic Eaton Ford GE Gould Hewlett Packard Honeywell Kodak M/A-COM Marquette Elec Masscomp Perkin Elmer Reliance Elec. Rockwell Siemans TI Tektronix Teledyne Teradyne Trillium On Time Delivery, Customer Measured %NotOnTime%NotOnTime Dec 88 15 Nov 88 14 Jul 87 8 Aug 87 10 Sep 87 10 Oct 87 9 Nov 87 12 Dec 87 11 Jan 88 17 Feb 88 18 Mar 88 19 Apr 88 17 May 88 17 Jun 88 15 Jul 88 18 Aug 88 16 Sep 88 19 Oct 88 17 Half Life = 10 Months 100 10 1 Actual data Regression of data Companies per data point

22. ©1987-2000 Arthur M. Schneiderman All Rights Reserved. Slide 22 3/3/89-CMQ Customers in database Allied Signal Apollo Bendix Compugraphic Eaton Ford GE Honeywell Kodak Loral M/A-COM Marquette Elec Martin Marietta Perkin Elmer Siemans Teledyne Quality Customer Measured (Lot Acceptance Rate) %LotRejected%LotRejected Dec 88 8 Nov 88 8 Jul 87 3 Aug 87 5 Sep 87 5 Oct 87 4 Nov 87 6 Dec 87 5 Jan 88 13 Feb 88 14 Mar 88 14 Apr 88 12 May 88 12 Jun 88 12 Jul 88 14 Aug 88 12 Sep 88 11 Oct 88 10 1 0.1 Actual data Regression of data Companies per data point Half Life = 7 Months

23. ©1987-2000 Arthur M. Schneiderman All Rights Reserved. Slide 23 c. 1989-PREZ-6 Analog Devices Manufacturing Facilities Wilmington, MA Andover, MA Norwood, MA Greensboro, NC Surrey, England Limerick, Ireland Tokyo, Japan Manilla, Phillippines ?,?

24. ©1987-2000 Arthur M. Schneiderman All Rights Reserved. Slide 24 C. 1989-PREZ-7 ADI Worldwide Sales Offices

25. ©1987-2000 Arthur M. Schneiderman All Rights Reserved. Slide 25 c. 1989-PREZ- 1988 Bookings by Industry Segment Military/Avionics Non-Mil Commun Computer Industrial Instrumentation Other

26. ©1987-2000 Arthur M. Schneiderman All Rights Reserved. Slide 26 c. 1989 PROJECTED WORLDWIDE GROWTH RATES 1987-1992 Electronic EquipmentSemiconductor SalesADI's Growth Goal 0 5 10 15 20 25 average annual growth rate, %/year 11% 13% 20%

27. ©1987-2000 Arthur M. Schneiderman All Rights Reserved. Slide 27 c. 1989

28. ©1987-2000 Arthur M. Schneiderman All Rights Reserved. Slide 28 c. 1989