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180 Ved Prakash 181 Vishal Goel 182
ACC and DJC each had distinct strategies and practices related to the operations and manufacturing within their respective corporations. ACC must develop a plan of action to limit DJC¶s intrusion into their established North American market.Overview of the case American Connector Company (ACC) and DJC Corporation (DJC) were both mid level competitors in the highly fragmented and highly competitive electrical connector industry. By answering the questions mentioned in the following slides we will try to explore the above mentioned issue. Faced with the threat of a highly efficient competitor launching a nearby production facility. ACC relied mostly upon their ability to offer customized connector solutions and high end products. . DJC recently announced the construction of an US-based manufacturing facility located near ACC¶s facility. Like most of the Japanese corporations DJC relied mostly upon efficient manufacturing processes as the basis for their competitive strategy and as the means to achieve their annual profit goals.
the Sunnyvale plant was quite flexible whereas at Kawasaki. thus in effect having 4 production areas. the whole production area was used to develop all products. whereas Kawasaki maintained a finished goods inventory of 56 days. Kawasaki had a dedicated production unit for each of the four types of connectors developed. Sunnyvale plant maintained a finished goods inventory of 38 days. In terms of packaging. Sunnyvale: Capacity and technology was added as and when required. In comparison. packaging was standard.comparison of the manufacturing structures and strategies of DJC¶S Kawasaki plant and ACC¶S Sunnyvale plant Through the following bullet points we will try to highlight the major differences between the manufacturing structure of DJC¶S Kawasaki plant and ACC¶S Sunnyvale plant Kawasaki : Planned from Initiation. . and was different from the industry standard. at Sunnyvale.
in Sunnyvale. Whereas. This was because. in terms of controlling costs. In Kawasaki. despite high difference in raw material prices. the production schedule was fixed and would not change under any circumstance or for any special order from customers. they did away with most of the extras that they felt did not add any value for their customers. while the buzz word for the Kawasaki plant was cost cutting. So while the Kawasaki people studied and adapted designs from American companies. . In terms of products. Thus. This gave them an upper edge. the cost of raw materials was twice as high as in the United States. for the Sunnyvale plant it was flexibility. in Japan. Kawasaki cost per units were only slightly higher than Sunnyvale¶s cost per unit connector. the Kawasaki plant stressed on continuous and reliable operations and low raw materials cost. Thus . although policy stated that the production schedule for any given day was to be decided upon 30 days in advance. actually the schedule was changed quite frequently to meet customer demands.
Thus a lot of pre-automation work was performed. In terms of hierarchy. the moulds received regular maintenance. Required experts were hired for the moulding technology group. each division was headed by a supervisor who reported to a director. . At Kawasaki. In terms of process. in order to perfect the efficiency of the automated process. There was a dedicated ³Technology development division ³ at Kawasaki to coordinate between various divisions in product planning. This was different from Sunnyvale. for Kawasaki. Kawasaki identified moulding as a key area. the senior management took long term decisions. technology used was old and reliable upgraded in-house. this was merely bought from vendors as standards and requirements changed. In Sunnyvale. besides basic daily maintenance. as compared with Sunnyvale. which would lose its edge in a few years¶ time. but staff was given freedom in day to day decisions. the idea was to concentrate on automation. At Sunnyvale. and investments were accordingly made. where in the growth years heavy investment had been made into buying new technology as per requirements.
flexibility and product innovation DJC·s Kawasaki Plant The chief goals of the kawasaki plant are:: The plant must achiever asset utilization of 100 % Yield on raw materials must reach 99 % Customer complaints should not exceed 1 per million units per output Fulfillment of the above three goals would mean that kawasaki plant would be the lowest cost producers in Japan. high reliability. Also the following factors would allow it to maintain low costs & strategic advantage : Proximity to major Japanese electronics companies Proximity to major raw materials suppliers Availability of young. such as low cost.Impact of manufacturing strategy of each plant on its ability to achieve different competitive objectives. highly skilled workers .
DJC Corporation. Continuous improvement of existing processes was highly relied upon. required that the Kawasaki facility be highly automated. . -They used to ensure a smooth flow of materials -Hold less raw material inventory Product Innovation -In-house technology development . and raw material consumption. worker movements. The pre-automation process helped analyze process flows. dedicated to process positioning and robust systems engineering. more established process. -Pre-automation -The technology development department coordinated various functions to improve product characteristics. Flexibility-Kawasaki plant had complete control over its schedule and mix and refused to make changes for unplanned orders. rather than implementing newer unproven processes. It removed any design feature that didn¶t add value to the customer. DJC also believed it better to utilize an older.Made all proprietary design modification in-house -It used to simplify production and reduce cost by packaging its connectors only on tape and reels.
the finance people hasn¶t let the manufacturing people buy the latest equipments due to the fall in demand. After 1986. It also used to cater to custom models. The plant produced 4500 different models in 1991 while in 1981. It used to buy latest technologies for its production channels. High reliability Product Innovation . To maintain flexibility the company tried to expand capacity ahead of expected growth in demand. The company used to ensure that the defect shouldn¶t exceed 1 defect per 1 million units. It used to cater to computers. telecommunication equipments and scientific instruments sectors. the plant produced 3000 models due to increase in number of individual product manufactured. This helps to accommodate rush orders and requests from more important customers.ACC·s Sunnyvale Plant Flexibility They decide on the production schedule 1 month prior to the actual date. It met customer delivery requirements with quality and on time. Till 1986 it used the latest production equipments to improve quality.
Also.Low Cost The company ensures that they get the raw material for product and packaging at a lesser costs making the total cost lesser. cheaper electricity costs. .
. which they have been ignoring. which if divided equally among them is 21.If DJC builds a new plant in US then the factors on which they should focus more are They should drop that IN-HOUSE technology development strategy at least for the first few years till the time they acquire substantial market share in the US and have sales to achieve break even for that. Therefore one looking to compete with ACC in the US cannot ignore this sector. As one knows how fast electronic industry is growing and everyday or every weekend one can see a new product in the market so to cater to fast changing environment they should also look for new technologies and improve them with time too. They have improve their flexibility as 15% of ACC¶s production is from customization and the rest is from four types of products that means 85%.25% of production .
it WIP inventory will increase and finished goods inventory will increase. . Moreover. which will further aggravate the situation. DJC is a very serious threat to ACC as by their current at Kawasaki is able to compete them in international arena when they are working on raw material which is double of the cost of raw material at which ACC is working.If Sunnyvale plant doubles its production run length then it will be very difficult for them to schedule this much complex production considering they at present are making more than 4500 different connectors.
Changes recommend in the operations of ACC·s Sunnyvale plant They need to change their plant layout and have a separate cellular layout for the mass production of all four types of connectors which would be working 24*7 considering the demand and have a separate layout for customization. which would decrease the worker needed to handle packaging. They need to automate their process by which they can decrease their man power from 396.e. They need to have a particular standard for packaging i. they are currently packaging at 10 piece plastic bag to 1500 pieces of loaded reel. .
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