Motorola transformed its supply chain over several decades through strategic initiatives focused on cost improvements, cash flow, and customer service. It developed an integrated global supply chain and trained employees in Six Sigma to reduce defects. This improved quality while cutting costs by $10 billion. Motorola also revamped supplier relations and reduced its supplier base. These changes freed up cash and increased productivity. However, competition from Apple iPhone later caused Motorola's market share and revenues to decline before it rebounded by targeting the Indian market through exclusive partnerships with Flipkart.

1. METAMORPHOSIS OF MOTOROLA’S
SUPPLY CHAIN
We’re everywhere our customers need us!
-Motorola Inc.
-Girish Panchal
K. J. Somaiya college of Engineering

2. HISTORY
1928
• Founded by Paul Galvin as Galvin Mfg. Corps. in
Chicago
1947
• Name changed to Motorola Inc.
1949
• Became leader for military, space and
commercial communications
1960
• Robert Galvin expanded Motorola into
international markets
1980
• Became the premiere world wide supplier of
cellular telephones

3. HISTORY

4. VISION OF MOTOROLA'S SC
● Develop integrated supply chain across the globe to achieve
efficiencies in logistics, manufacturing, procurement and quality
● Support growth and create value for the firm by focusing on the 3
Cs
● Delivering seamless mobility solutions to our customers by focusing
on Top 6 priorities

5. 3 CS
First, COST improvements enable Motorola to price its products
to win business
Freeing up CASH through efficiency improvements provides
capital for business growth and acquisitions
And finally, CUSTOMER SERVICE enables the company to
retain existing customers and gain new ones.

6. TOP 6 PRIORITIES FOR E&E SC

7. PROCUREMENT STRATEGY
Partner with world class suppliers who offer Motorola a
competitive
cost quality service technology capacity
Global
support
Once a diverse supplier engages with Motorola, we strive to
develop a relationship that is mutually beneficial.

8. QUALITATIVE MANUFACTURING
STRATEGY
To minimize and ideally eliminate defects from the manufacturing
process, the concept of Six Sigma was introduced
Six sigma means to reduce the number of defects to as low as
3.4 parts per million
Motorola spends more than $ 25 million on a top-down training
programme to make understand of working on six sigma in the
company

10. WHY SIX SIGMA?
The philosophy is one of working smarter, not harder…
This translates to making fewer and fewer mistakes in
everything we do, from manufacturing products to filling out a
purchase order.
As harmful sources of variation are discovered and
neutralized, the sigma rating goes up and this means our
process capability improves and the defects/mistakes go
away.
One year after implementation of six sigma, Motorola saved
$250 million on failure costs.
Saved $17 Billion from 1986 to 2004.

11. BENEFITS OF TRAINING
PROGRAMME
● Production cost reduced by $10billion by training work force in
1987.
● Productivity measured by sales per person increased by 139%
in 1998.
● A return of $30 in three years for every dollar spent on training .

12. FALL ERA OF MOTOROLA
The company's fortunes took a dip shortly after 2004.
Period from 2006 to 2008, revenues from the Mobile Devices
business unit slipped from $28bn to $12bn, while the number of units
sold plunged from 217 million to 100 million.
Apple iPhone - the dominating brand.
Recession of 2008 led to excess and useless inventory.

13. WHERE THE S.C. LACKED?
Motorola being good at the quality level, they didn’t found any
discrepancies in the manufacturing side of the product.
The main issue was the management of supplier’s relations with
the company.
There was no proper record of the suppliers and suppliers tried to
cheat the company by having different prices for the same
products for the different plants.

14. SUPPLIER RELATIONS
Supplier relations, a major problem area under the old regime,
were revamped
Motorola's supply-chain started keeping the regular contact with
suppliers to set the right milestones
Meanwhile, the top 150 suppliers saw a 91-percent increase in
their share of Motorola's overall spending
Only the best in each category were left standing, as the
company pushed for quality, cost, speed and flexibility
The supplier base was pared down, with the number of vendors
in one category alone dropping from 170 to 10

15. C- LEVEL SUCCESS
Customer service levels have markedly improved, in part
because Motorola has cut number of defective parts per million
supplied parts
Improved delivery times for shipments to its customers
Because its supply chain now operates more efficiently, the
company holds less inventory, which has freed up cash

16. “Supply chain productivity has risen by 71 percent
without adding staff,
we have achieved more with fewer people, with better
quality and at a lower cost.”
-Stu Reed (executive vice president of ISC)

17. PRESENT DAY
Motorola now has targeted the Indian market and has made its
entry in February, 2014
Moto E, G and X and the android smart watch, Moto 360 are
kind of the top and tail of the Moto family
Motorola did blaze a trail when it went for an exclusive
partnership with Flipkart to sell its phone in 2014

18. Amit Boni (GM, India) says, “our channel inventory is for 2 weeks.
Others have to hold at least 12 weeks stocks. On some products,
we run with as low as just a week’s inventory.”
Satyashri Mohanty, director, Vector Consulting Group, a supply
chain consultancy, says,
"Offline sales requires inventory to be spread across distributors
and then retailers. For Motorola, there is one mega distributor,
Flipkart. Hence, both the levels of forecasting and the amount of
inventory are less. Usually offline distributors hold between 25
and 45 days' inventory.”
PRESENT DAY

19. VALUE CHAIN FOR MOTOROLA

20. PRESENT DAY
Of the 140-and-counting service centers, Boni says, “the average
utilization level is less than 70 per cent, pointing to a low level of
service issues.”
Marcul Frost (Sr. Marketing Director) says, "We took our time to
build the backbone of service stations before coming back to the
market as that gives the consumer reassurance.”
Motorola has its task cut out, as so far, the majority of the 3 million
units of Motorola phones sold belong to the Moto G and Moto E,
both budget models

21. REACHING THE CUSTOMERS
Experience centers for consumers
Such hand-holding would extend to mobile vans, too. Frost says,
"The Moto Care vans are our innovation around service,
answering consumers' small questions, helping them upgrade
software etc. It will bring the brand right to the doorstep of the
Indian consumer. We would be looking more at these in 2015."
Good feedback from Delhi.

22. BIBLIOGRAPHY
 Articles from Supply Chain Brain
1. An All-Out Effort at Supply Chain Transformation at Motorola
(Global Logistics & Supply Chain Strategies)
2. Motorola Mobility Gets a Grip on Supplier Management
(SupplyChainBrain; resource link : Motorola mobility)
 Metamorphosis of a supply chain (James A. Cooke, 2007)
 Business Standard articles (Sayantani Kar, March 11,2015)
 Statistical quality control (Dr. M. Mahajan)
 Presentations
1. Motorola Integrated Supply Chain ISC Communication Plan
2. Multinational Companies
3. Motorola Ethics
4. MOTOROLA "Making things smarter and life better"
5. Applying BPM methodology(Tom Judd, October 2008)

23. “Few people would ever think of comparing a supply
chain to a butterfly, but the metamorphosis from
caterpillar to a thing of beauty is an appropriate
analogy for the evolution that took place at Motorola
Inc.”