American Connector Co.

(A)
Harvard Business School Case #693-035
Case Software #XLS-291

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Exhibit 5 Comparison of Labor Use (1991)

Kawasaki 94 Sunnyvale 396

Employees Employees
Indirect Labor
Control 11.7% 16.7%
Technology Development 12.8% 6.8%
Materials Handling 3.2% 10.4%
Mechanics 4.3% 11.9%
Direct Labor (Production) 68.0% 54.0%
Total 100.0% 100.0%

Note: Kawasaki production estimated to be 700 million units. Sunnyvale production

estimated to be 420 million units.
Exhibit 6 Productivity Comparisons (1991)

employees Kawasaki 94 Sunnyvale 396

employees employees
(a) Connector Output per Square 15.1 10.9
Foot (in thousands of units) Per
Square Foot of Map Space
(b) Connector Output per Employee 7.45 1.06
(in millions of units)
(c) Fixed Asset Utilization (%)
Plant Not Operating* 5.7% 28.6%
Non-scheduled 13.2% 23.5%
Process Failure 1.0% 8.9%
Preventive Maintenance 2.0% 2.4%
Process Changeover 2.0% 4.8%
Quality Losses 0.7% 1.6%
Effective Utilization 75.4% 30.2%

* Assumes maximum available time of 24 hours/day, 350 days/year (8,400 hours). Equal to
(350 - days plant is operating)/350.
Source: Company documents
Exhibit 7 Comparison of Manufacturing Costs (Kawasaki vs. Sunnyvale)

DJC vs. American Connector Cost of Goods Sold For a Standard Chip-to-Board Connector
(dollars per 1,000 units)

DJC/Kawasaki ACC/Sunnyvale DJC/Kawasaki ACC/Sunnyvale

1986 1986 1991 1991
Raw Material, Product 14.32 10.40 12.13 9.39
Raw Material, Packaging 3.27 2.25 2.76 2.10
Labor, Direct 7.63 ... 3.02
Labor, Indirect 2.30 ... 0.75
Total Labor ... 8.53 10.30
Electricity 2.47 1.80 1.40 0.80
Depreciation 7.63 5.52 1.80 5.10
Other 4.12 4.41 4,24 6.10
TOTAL 41.74 32.91 26.10 33.79

Note: -135 = $1, 1989 exchange rate used to convert from yen to dollars.

Exhibit 8 Cost Indices, United

Expense Item Index

Raw Material, Product 0.60
Raw Material, Packaging 0.60
Labor, Direct 1.10
Labor, Indirect 1.10
Electricity 0.80
Depreciation 1.00
Other 1.00

Source: Company documents

DJC/USA
1991
7.28
1.66
3.32
0.83
13.08
1.12
1.80
#VALUE!
#VALUE!
Exhibit 8 Cost Indices, United
States/Japan (1991)

Expense Item Index

Raw Material, Product 0.60
Raw Material, Packaging 0.60
Labor, Direct 1.10
Labor, Indirect 1.10
Electricity 0.80
Depreciation 1.00
Other 1.00

Source: Company documents

 DJC/ DJC/ USA (a
DJC/ USA DCs+oe DCs DCoe
Kawasaki capacidad)

Materias Primas Producto 12.13 7.28

Materias Primas embalaje 2.76 1.66
TOTAL MATERIAS PRIMAS 14.89 8.93 0.00 0.00 0.00 0.00
Mano de Obra Directa 3.02 3.32
Mano de Obra Indirecta 0.75 0.83
TOTAL MANO DE OBRA 3.77 4.15 0.00 0.00 0.00 0.00
Electricidad 1.40 1.12
Depreciación 1.80 1.80
Otros 4.24 4.24
TOTAL 26.10 20.24 0.00 0.00 0.00 0.00

Expense Item Index

Raw Material, Product 0.60
Raw Material, Packaging 0.60
Labor, Direct 1.10
Labor, Indirect 1.10
Electricity 0.80
Depreciation 1.00
Other 1.00
DJC/
DJC/ USA DJC/ USA (a DCs+oe DCs DCoe
Kawasaki capacidad)

Materias Primas Producto 12.13 7.28 7.28

Materias Primas embalaje 2.76 1.66 1.66
TOTAL MATERIAS PRIMAS 14.89 8.93 8.93 2.55 2.45 0.10
Mano de Obra Directa 3.02 3.32 3.32
Mano de Obra Indirecta 0.75 0.83 0.72
TOTAL MANO DE OBRA 3.77 4.15 4.04 6.26 3.13 3.13
Electricidad 1.40 1.12 1.12 -0.32 -0.21 -0.11
Depreciación 1.80 1.80 1.58 2.62 1.70 0.92
Otros 4.24 4.24 4.24 1.86 1.21 0.65
TOTAL 26.10 20.24 19.91 12.97 8.28 4.69

DJC JPN 26.10 0 Compar

20.24 5.86 35
DJC USA 20.24 0
19.91 0.33 30
DJC A CAPACIDAD 19.91 0
19.91 8.28
25
DJC PROPUESTA ACC 28.20 0 5.86
28.20 4.69
ACC A CAPACIDAD 32.88 0 20 0.33
32.88 0.91
ACC ACTUALMENTE 33.79 0 15
26.10
10 20.24

5
 5.86

20 0.33

15
26.10
10 20.24

0
N A
C
JP US
DJ C
DJ PA
CA
A
C
DJ
 ACC / USA
ACC
(a capacidad)

9.39
2.10
0.00 11.49

0.00 10.30
0.80
5.10
6.10
0.00 33.79

Monto No Estratégico Monto

ACC / USA ACC
Anx. 3Elementos de diseño (DJC ya tiene
(a capacidad) los conocimientos para su aplicación) Anx. 3

9.39 0.21 Diseño de moldes interno 3.5

2.10 0.48 Ahorros en resina 0.59
11.48 11.49 0.18 Masa reducida de Bastidores
1.05 Reducción de residuos
1.92 TOTAL 4.09
10.30 10.30 1.15 Puesto en USA 2.45
0.80 0.80
4.20 5.10
6.10 6.10
32.88 33.79

Comparación Costos DJC vs ACC

0.91
4.69

8.28
5.86

0.33

32.88 33.79
28.20

20.24 19.91
5.86

0.33

32.88 33.79
28.20

20.24 19.91

A AD C AD TE
US ID AC ID EN
DJ
C
PA
C
S TA PA
C M
CA
E
CA AL
A PU TU
C PR
O
C
A AC
DJ AC C
DJ
C AC
 Estratégico
Elementos de Diseño (DJC debe
incurrir en costos extra para lograrlo)
Anx. 3
Chapado de Estaño
Devanadera de 2.000 unidades

TOTAL
Puesto en USA
Item ACC
Depreciación Actual (Anx. 7) 5.10
Capacidad Planta [M] (Pag.4&11) 600,000
Producción Actual [M] (Anx. 5) 420,000
Utilización Actual 70.0%
Depreciación total anual [M] 2,142,000
Producción planificada 510,000
Depreciación planificada 4.20
verde
roja
cobre
negra
 DJC
1.80
800,000
700,000
87.5%
1,260,000
800,000
1.58

Días / Año (total año)

Dias máximos disponibles (Anexo 6)
Días operativos [DJC pag.4; ACC promedio 70%]

Año 1991
Utilización efectiva
Cambio de Procesos
Mantenimiento Preventivo
Fallo de procesos
Pérdidas de calidad (re trabajo; scrap)
Planta no en funcionamiento (vacaciones, fines de semana de 350 días)
Planta no en funcionamiento ( adicionales sobre 365 días, 15 días)
No programada (por baja demanda, stock; pag 9;12)
No programada ( WIP seguridad o capacidad; pag 8;12)
No programada (otros, pag. 10, 13)

Exhibit 6 Productivity Comparisons (1991)

employees

(a) Connector Output per Square Foot (in thousands of units) Per Square
Foot of Map Space
(b) Connector Output per Employee (in millions of units)
(c) Fixed Asset Utilization (%)
Plant Not Operating*
Non-scheduled
Process Failure
Preventive Maintenance
Process Changeover
Quality Losses
Effective Utilization

* Assumes maximum available time of 24 hours/day, 350 days/year (8,400 hours). Equal to (350 - days plant is operating)/35
Source: Company documents
 365
350
330 250
# días Fracción 365 Fracción 350
[días] [días] [días Anx. 6] Cantidades (MM unidades)
DJC ACC DJC ACC DJC ACC DJC ACC
264 106 72.3% 29.0% 75.4% 30.2% 700 420
7 17 1.9% 4.6% 2.0% 4.8%
 7 8 1.9% 2.3% 2.0% 2.4%
4 31 1.0% 8.5% 1.0% 8.9%
2 6 0.7% 1.5% 0.7% 1.6%
20 100 5.5% 27.4% 5.7% 28.6%
15 15 4.1% 4.1%
56 38 15.3% 10.4% 16% 11%
5 10 1.4% 2.7% 1% 3%
0 8 0.0% 2.3% 0% 2%

264.150943

Kawasaki Sunnyvale
94 396
employees employees
15.1 10.9

7.45 1.06

13.2% 23.5%

s). Equal to (350 - days plant is operating)/350.

M unidades) Año 1991 DJC ACC
Utilización efectiva 264 106
Por volumen
No programada (por baja demanda, stock; pag 9;12) 56 38
Utilización ajustada por volumen
Cambio de Procesos (proporcional a #sku) 7 17
Mantenimiento Preventivo 7 8
Fallo de procesos 4 31
Pérdidas de calidad (re trabajo; scrap) 2 6
Planta no en funcionamiento (vacaciones, fines de semana de 350 días) 20 100
Planta no en funcionamiento ( adicionales sobre 365 días, 15 días) 15 15
No programada ( WIP seguridad o capacidad; pag 12) 0 10
No programada (otros, pag. 10, 13) 0 8
DC DCvol. DCstr. DCeo
158

-18
140
1 8
1
28
3
80
0
10
8
140 92 49
100% 65% 35%