m American Connector Company (ACC) and DJC Corporation (DJC) were both

mid level competitors in the highly fragmented and highly competitive

electrical connector industry. ACC and DJC each had distinct strategies and
practices related to the operations and manufacturing within their respective
corporations.
m DJC, like most of the Japanese corporations relied mostly upon efficient
manufacturing processes as the basis for their competitive strategy and as the
means to achieve their annual profit goals.
m 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. Faced with the threat of a
highly efficient competitor launching a nearby production facility, ACC must
develop a plan of action to limit DJC¶s intrusion into their established North
American market. By answering the questions mentioned in the following slides
we will try to explore the above mentioned issue.
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m °n Kawasaki, the production schedule was fixed and would not change under any
circumstance or for any special order from customers. This gave them an upper edge, in
terms of controlling costs. Whereas, in Sunnyvale, 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 , while the buzz word for the
Kawasaki plant was cost cutting, for the Sunnyvale plant it was flexibility.
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m °n terms of process, for Kawasaki, the idea was to concentrate on automation. Thus a lot of
pre-automation work was performed, in order to perfect the efficiency of the automated
process. This was different from Sunnyvale.
m At Kawasaki, technology used was old and reliable upgraded in-house, as compared with
Sunnyvale, where in the growth years heavy investment had been made into buying new
technology as per requirements, which would lose its edge in a few years¶ time.
m Kawasaki identified moulding as a key area, and investments were accordingly made.
Required experts were hired for the moulding technology group, the moulds received regular
maintenance, besides basic daily maintenance. At Sunnyvale, this was merely bought from
vendors as standards and requirements changed.
m There was a dedicated ³Technology development division ³ at Kawasaki to co-ordinate
between various divisions in product planning. °n terms of hierarchy, the senior management
took long term decisions, but staff was given freedom in day to day decisions. °n Sunnyvale,
each division was headed by a supervisor who reported to a director.
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The chief golas of the kawasaki plant are::
m The plant must achiever asset utilization of 100 %
m Yield on raw materials must reach 99 %
m 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.
Also the following factors would allow it to maintain low costs & strategic advantage
:-
m Proximity to major Japanese electronics companies
m Proximity to major raw materials suppliers
m Availability of young, highly skilled workers
DJC Corporation, dedicated to process positioning and robust systems
engineering, required that the Kawasaki facility be highly automated.
The pre-automation process helped analyze process flows, worker
movements, and raw material consumption. DJC also believed it better
to utilize an older, more established process, rather than implementing
newer unproven processes. Continuous improvement of existing
processes was highly relied upon.
Flexibility-Kawasaki plant had complete control over its schedule and mix
and refused to make changes for unplanned orders.
-They used to ensure a smooth flow of materials
-Hold less raw material inventory

Product °nnovation
-°n-house technology development
- Made all proprietary design modification in-house
-°t used to simplify production and reduce cost by packaging its connectors
only on tape and reels.
-Pre-automation
-The technology development department coordinated various functions to
improve product characteristics. °t removed any design feature that
didn¶t add value to the customer.
 6




r The company ensures that they get the raw material for product and packaging at a
lesser costs, and cheaper electricity costs, making the total cost lower.
D



r The company has tried to ensure that the defects in products shouldn¶t exceed 1
defect per million units, and it has met customer delivery requirements with quality
_ $ and on time.

r They decide on the production schedule 1 month prior to the actual date. This helps
to accommodate rush orders and requests from more important customers. They
*#$ have tried to expand capacity ahead of expected growth in demand.

r . The plant production has increased from 3000 to 4500 products due to increase in
number of individual product manufactured. °t buys latest technologies for its
 
production channels, and also produce custom models and supports innovation.
   
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°f 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. Moreover, it W°P inventory will increase and finished goods
inventory will increase, 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.
  
 



  

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