Analog Devices B Inc

ANALOG DEVICES INC.(B)

2000,ADI had an explosive top line growth Manufactured components for PC modems,

ADSL switches, mobile phones and wireless infrastructure equipment

ADI’s product mix included components for Internet-related equipment

ADI’s strategy was innovation and product design

Q1.HOW DID ADI’S INDUSTRY CHANGE BETWEEN 1996 AND 2001

Internet era let to a 78 % increase in top line growth

Change in demand characteristics for ADI’s products

Disaggregation of the supply chain Operators of chip fabrication Global component distribution Contract equipment manufacturers

Tradition distinction between analog and digital market was increasingly becoming blur

Greater collaboration required in the product design process

Reduce product life cycle

Q2.HOW ARE THE TARGETS SET FOR THE METRICS ON THE SCORECARD? WHO SETS THEM?

Gradual drift from half life concept as it was only suitable for weakness based measures

Goal setting process Bottom up

Divisions prepare the plans which are approved by the senior management, based on the plan post consultation with both the parties goals are assigned

Top downSenior management assigns goals to

the lower rang managers

Cross Functional Team sets the targets

Q3. IS ADI’S SCORECARD AS USEFUL TODAY AS IT WAS IN THE 80S? WHAT ARE THE LIMITATIONS TO SCORECARD? WHAT CAN GO WRONG?

Not as effective as in 80s Change in Business Environment

Extremely dynamic measures are not included in the Executive information system and are captured through spreadsheets

Presence of too many measures make them less relevant as actionable information

The Scorecard was not linked with the employee compensation

Q4.WOULD YOU MAKE ANY CHANGES TO THE WAY ADI MANAGES ITS SCORECARD? WHAT CHANGES? WHY?

Metrics should be embedded in EIS & not on manual spreadsheets

Metrics should be kept flexible

Q5.DOES THE METRICS SYSTEM HAVE FLAWS? CAN EMPLOYEES GAME THE SYSTEM? WHAT ARE THE DANGERS OF THE EIS?

As employees and the organization get used to the old way of doing things, new scorecard measures should be introduced keeping in mind the

Dynamic nature of the semiconductor market Time required to implement the project

Dangers of EIS Ubiquity of information-Presence of too many

measures make them less relevant as actionable information

Benefits hard to quantify

High implementation costs

System may become slow, large, and hard to manage

THANK YOU