CASE STUDY 4 - Semiconductor Manufacturing, Operational Risk
A major manufacturer and distributor of semiconductor circuit products for telecom, automotive, consumer, and personal computer industries identified design cycle time as a strategic competency. Being first to market with key designs meant improved margins and profitability. Round-the-clock global design engineering teams worked on various segments of each project. Speed was essential in maintaining competitive advantage but required offshore design teams for reduced labor costs.
Quality of initial product designs had deteriorated and turnover of design project managers had increased. A number of different processes and design tools were in place across multiple sites. And, the US Department of Commerce had alleged export control violations for illegal transfer of protected semiconductor technology that was prohibited to specific foreign nations working for the company. The operation was identified as containing unacceptable risk.
During a risk assessment, the following operation risk factors were identified for priority management:
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- Global design teams needed training, using a common set of tools, across all design groups. Internal best practices across teams needed to be identified and communicated to all teams for inclusion in their work
- Management had no process by which to vet communications or handle other key issues across teams. Effective communication modalities needed to be installed
- Project managers lacked training in global communications and cultural diversity
- A consistent global product introduction process needed to be developed by a project team with the help of an outside consultant specializing in operational risk management
- Too many projects were "in process" at one time, with no criteria for establishing priorities
- A software filter was required to ensure that only authorized foreign nationals would have access to protected technologies.