1. © 1987-2000 Arthur M. Schneiderman. All Rights ReservedSlide 1 QIP Strategy Presentation c. March, 1988 Arthur M. Schneiderman Title

2. © 1987-2000 Arthur M. Schneiderman. All Rights ReservedSlide 2 c. 1987-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 Arnie Kanarick Executive VP VP, Japanese Operations Operations Controller Division GM VP, Quality/Productivity Improvement Chairman of the Board and President VP VP, European Operations VP, Human Resources Goodloe Suttler Division GM

3. © 1987-2000 Arthur M. Schneiderman. All Rights ReservedSlide 3 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 c. 1987-AMS_5

4. © 1987-2000 Arthur M. Schneiderman. All Rights ReservedSlide 4 7/25/87-QIP-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

5. © 1987-2000 Arthur M. Schneiderman. All Rights ReservedSlide 5 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

6. © 1987-2000 Arthur M. Schneiderman. All Rights ReservedSlide 6 c. 1988-2/88-OTD

7. © 1987-2000 Arthur M. Schneiderman. All Rights ReservedSlide 7 c. 1987-D2_20 ADI QIP TRAINING PROGRAM PHASE IPHASE II PROOF OF THE NEED Customers (JIT, VENDOR PROGRAMS) Competitors (TI Hiji, JIT Programs, Japan) COPQ/ “Cost of ownership” IMPLEMENTATION Project selection Cross-functional problem solving QIP team management - QIP vs. un-QIP teams - QC Circles WHAT IT TAKES Top management commitment Sense of urgency Systematic approach Pilot projects Company wide involvement Organization/Systems TOOLS 7 basic 7 new Design of experiments (Taguchi) Role of automation ADI QIP DEPLOYMENT Organization Goals deployment - strategic plan - benchmark plan TRAINING On the job, JIT Role of statistics Cross training Multiple skills PLANNING TOOLS Improvement curves/ kaizen Optimum quality levels Cost of waste INCENTIVES Bonus system Performance review QIP Promotion THE FUTURE Organization simplification Vendor customer relationships Marketing/selling QFD, TPM, … Fun, Fun, Fun

8. © 1987-2000 Arthur M. Schneiderman. All Rights ReservedSlide 8 9/29/87-QS4 A QIP Team: Has a Clearly Stated Objective Has Regular Meetings Is Cross-functional Uses an Organized Systematic Approach Emphasizes Data Collection and the Use of Statistical Tools Is Fun and Gets Results