The document discusses the production processes of American Connector Company (ACC) and Denso Corporation's Kawasaki plant. ACC operated 6 plants globally, emphasizing quality and customization which made up 15% of production. The Sunnyvale plant produced 4500 connector models and had undergone expansions. Kawasaki aimed for 99% utilization and customer complaints of less than 1 per million units. It used standardized designs and processes to maximize efficiency and yield. A comparison of ACC and Kawasaki in 1986 and 1991 showed Kawasaki had lower costs due to its lean production approach.
BUS 890: Culminating Experience in Strategic Management, FALL 2010
The culminating project is an in-depth case analysis of Suntech Power Holdings Co., Ltd. The analysis includes multiple concepts from the course to help explain the strategies, actions and performance of the company.
emerging nokia - should they focus on developed or emerging marketsSaurabh Arora
Should Nokia’s growth strategy be to focus on the developed markets, emerging markets or both?
Case Analysis
Handset manufacturer worldwide market share of 38% in 2009
Market leader in emerging markets like India(60%) and China(40%)
Financial performance pre-2008 was exceptional
Known for innovation
Offers products at all price points
Post-2008 started losing ground in developed markets
European market revenue declined by 15% in 2009
Exited the Japanese market after 20 years of operations
Nokia was fifth most valuable brand globally in 2000
Analysis of Emerging Market
Employed the cost leadership strategy: Purchasing power low in emerging markets hence Nokia provided cost effective products successfully.
First time purchasers: Only 20% of the emerging market were not first time purchasers
Services as the key selling point: People of emerging markets wanted value added services bundled with the phone
Analysis of Developed markets
Consumers not very price sensitive
Delivering innovative products more important
57% of the market goes for a second phone, most of the time for an upgrade
Emergence of i-phone, considered as replacement for normal handsets with users looking for upgradation
Growing competition from companies like Samsung, LG, Motorola and Sony Ericson was also making things worse for Nokia.
New Operating System – e.g. – Emergence of OSs like Google’s Android and Microsoft’s Windows mobile further bothered Nokia.
Inability to understand demand – Nokia failed to understand growing demand for touch phones
Why focus on Emerging Markets?
As Nokia has already gained the following benefits by being the first mover, it should strive hard to maintain it’s market share in developing economies. Advantages it has –
Earlier entry, early start of the learning curve. Its crucial and experience is tough to imitate.
Nokia can develop enhanced reputation by being pioneer and using its already established brand image
Absolute cost advantage can be gained by early commitments to supplies of materials and distribution channels….
Recommendations- Emerging Market
Nokia should concentrate on Improved as well as Basic phones as the market is still evolving
Tie up with Telecom players and bring dual sim phones to increase the switching cost
It should follow innovations in developed countries and adapt them to emerging markets in order to stand against competition.
One general strategy should be to outsource the services part as it is not Nokia’s competency and customers are giving more regard to services (Exhibit 6)
Instead of charging customers for Life tools, revenues should be earned from advertisers.
Allentwen material corporation - Electronic product divisionSaurabh Arora
Introduction
Leading manufacturer of speciality glass
Eight Line Divisions
First Company to establish an Industrial Research Laboratory
Marketing & R&D the strongest functional areas
Average growth of 10% a year
Electronics Product Division
Manufactured high quality electronic components
Initially, Business was from military market
Shifted to Commercial Market in late 1980s.
Growth in commercial market leading to high competition.
Current Scenario – (July 1992)
What can be done -
As it was seen Rogers has not been an effective leader, there is a need for training for him in more instructing management style
Rogers should remove himself from product development team and focus more on resource allocation
Team comprising for new product development should have employees from all the functions i.e. – it should be cross-functional
Sales team should be incentivized for bringing additional revenue for the company. It should have a dual salary structure – less fixed and more variable (commission)
More freedom needs to be given in budget allocation
More trainings about the specifications of the products(capacitors and resistors) should be provided
More team activities should be there so that trust and relation can be built amongst the teams
For fostering collaborative thinking, a common integrated system should be developed wherein feedback from the clients regarding product specification and product quality should be updated without any delay
Manzana Insurance is the second largest insurance company founded in California in 1902. • They operated through a network of autonomous branch offices in California, Oregon and Washington. Each branch is treated as a separate profit and loss centre. • Manzana does not directly interact with public but instead has its 2000 agents who represents Manzana. • Fruitvale was one of the Manzana’s smaller branches, with 3 underwriting teams and 76 agents. Our case concern is the falling performance and hence the profitability on Property Insurance for this branch.
BUS 890: Culminating Experience in Strategic Management, FALL 2010
The culminating project is an in-depth case analysis of Suntech Power Holdings Co., Ltd. The analysis includes multiple concepts from the course to help explain the strategies, actions and performance of the company.
emerging nokia - should they focus on developed or emerging marketsSaurabh Arora
Should Nokia’s growth strategy be to focus on the developed markets, emerging markets or both?
Case Analysis
Handset manufacturer worldwide market share of 38% in 2009
Market leader in emerging markets like India(60%) and China(40%)
Financial performance pre-2008 was exceptional
Known for innovation
Offers products at all price points
Post-2008 started losing ground in developed markets
European market revenue declined by 15% in 2009
Exited the Japanese market after 20 years of operations
Nokia was fifth most valuable brand globally in 2000
Analysis of Emerging Market
Employed the cost leadership strategy: Purchasing power low in emerging markets hence Nokia provided cost effective products successfully.
First time purchasers: Only 20% of the emerging market were not first time purchasers
Services as the key selling point: People of emerging markets wanted value added services bundled with the phone
Analysis of Developed markets
Consumers not very price sensitive
Delivering innovative products more important
57% of the market goes for a second phone, most of the time for an upgrade
Emergence of i-phone, considered as replacement for normal handsets with users looking for upgradation
Growing competition from companies like Samsung, LG, Motorola and Sony Ericson was also making things worse for Nokia.
New Operating System – e.g. – Emergence of OSs like Google’s Android and Microsoft’s Windows mobile further bothered Nokia.
Inability to understand demand – Nokia failed to understand growing demand for touch phones
Why focus on Emerging Markets?
As Nokia has already gained the following benefits by being the first mover, it should strive hard to maintain it’s market share in developing economies. Advantages it has –
Earlier entry, early start of the learning curve. Its crucial and experience is tough to imitate.
Nokia can develop enhanced reputation by being pioneer and using its already established brand image
Absolute cost advantage can be gained by early commitments to supplies of materials and distribution channels….
Recommendations- Emerging Market
Nokia should concentrate on Improved as well as Basic phones as the market is still evolving
Tie up with Telecom players and bring dual sim phones to increase the switching cost
It should follow innovations in developed countries and adapt them to emerging markets in order to stand against competition.
One general strategy should be to outsource the services part as it is not Nokia’s competency and customers are giving more regard to services (Exhibit 6)
Instead of charging customers for Life tools, revenues should be earned from advertisers.
Allentwen material corporation - Electronic product divisionSaurabh Arora
Introduction
Leading manufacturer of speciality glass
Eight Line Divisions
First Company to establish an Industrial Research Laboratory
Marketing & R&D the strongest functional areas
Average growth of 10% a year
Electronics Product Division
Manufactured high quality electronic components
Initially, Business was from military market
Shifted to Commercial Market in late 1980s.
Growth in commercial market leading to high competition.
Current Scenario – (July 1992)
What can be done -
As it was seen Rogers has not been an effective leader, there is a need for training for him in more instructing management style
Rogers should remove himself from product development team and focus more on resource allocation
Team comprising for new product development should have employees from all the functions i.e. – it should be cross-functional
Sales team should be incentivized for bringing additional revenue for the company. It should have a dual salary structure – less fixed and more variable (commission)
More freedom needs to be given in budget allocation
More trainings about the specifications of the products(capacitors and resistors) should be provided
More team activities should be there so that trust and relation can be built amongst the teams
For fostering collaborative thinking, a common integrated system should be developed wherein feedback from the clients regarding product specification and product quality should be updated without any delay
Manzana Insurance is the second largest insurance company founded in California in 1902. • They operated through a network of autonomous branch offices in California, Oregon and Washington. Each branch is treated as a separate profit and loss centre. • Manzana does not directly interact with public but instead has its 2000 agents who represents Manzana. • Fruitvale was one of the Manzana’s smaller branches, with 3 underwriting teams and 76 agents. Our case concern is the falling performance and hence the profitability on Property Insurance for this branch.
UV-Cured Powder Coating + Resource Productivity = Higher Profits by Michael F. Knoblauch, DVUV & Keyland Polymer
Using Resource Productivity as a template, the webinar will demonstrate how the adoption of UV-Cured Powder Coating as a material and finishing solution can produce higher profits.
Variability from all kinds of sources effects solar project development. This is a review of potential sources and ways to reduce your project uncertainty.
New Revenue and Cost Savings Opportunities – Realising the Value of FlexibilityEMEX
The UK energy market is entering a new era. With an increase in the proportion of renewable generation, there is a movement towards greater interactivity between consumers and the network.
By unlocking flexibility within their portfolios, large energy users can help contribute to a more sustainable energy future and generate new revenue.
With the launch of National Grid’s Power Responsive programme, along with a multitude of industry studies looking at how the UK can embrace flexibility, a range of options now exists in the market place for businesses to get involved.
In this session, Jeff will look at how large business users can contribute to the development of a more cost-effective, sustainable energy system, and will draw on a live example to demonstrate the value that flexibility can bring to organisations.
C&I customers represent a substantial opportunity for load reduction, but the key is to incentivize projects with excellent performance, economics, and impact. Intelligent LED systems are redefining the lighting category and displacing legacy technologies with proven results.
The webinar, presented by Michael Feinstein from Digital Lumens, will cover the following topics:
• Industrial lighting technology review
• Intelligent LED System overview
• 90% energy reduction – the economics of intelligent LEDs
• Large C&I lighting customers – retrofit & new construction case studies
• Future of intelligent LED lighting
Mike Feinstein is responsible for leading the Digital Lumens sales and marketing teams and has had extensive experience in the entrepreneurial and investment worlds, most recently as Managing Director of Sempre Management. Previously, he was a General Partner at Venrock Associates and Atlas Venture, where he served on the boards of start-ups including Boston-Power, Ciclon Semiconductor (acquired by Texas Instruments), CircleLending, WaveSmith Networks (acquired by CIENA Corp.) and Quantum Bridge Communications (acquired by Motorola). Michael holds a B.S. in Electrical Engineering and Computer Science from MIT.
This presentation is part of the Midwest Energy Efficiency Alliance Industrial Webinar Series. Find out more at http://www.midwestindustrial.org.
Closing the Deal - Selling Solar to Commercial CustomersAlternergy
Presentation by Rajiv Bhatia of Alternergy on how to sell solar PV to commercial customers. UK solar rooftop market, challenges & opportunities, return on investment, selling to the customer, installer success factors.
Model Attribute Check Company Auto PropertyCeline George
In Odoo, the multi-company feature allows you to manage multiple companies within a single Odoo database instance. Each company can have its own configurations while still sharing common resources such as products, customers, and suppliers.
Palestine last event orientationfvgnh .pptxRaedMohamed3
An EFL lesson about the current events in Palestine. It is intended to be for intermediate students who wish to increase their listening skills through a short lesson in power point.
Read| The latest issue of The Challenger is here! We are thrilled to announce that our school paper has qualified for the NATIONAL SCHOOLS PRESS CONFERENCE (NSPC) 2024. Thank you for your unwavering support and trust. Dive into the stories that made us stand out!
Welcome to TechSoup New Member Orientation and Q&A (May 2024).pdfTechSoup
In this webinar you will learn how your organization can access TechSoup's wide variety of product discount and donation programs. From hardware to software, we'll give you a tour of the tools available to help your nonprofit with productivity, collaboration, financial management, donor tracking, security, and more.
Unit 8 - Information and Communication Technology (Paper I).pdfThiyagu K
This slides describes the basic concepts of ICT, basics of Email, Emerging Technology and Digital Initiatives in Education. This presentations aligns with the UGC Paper I syllabus.
The Indian economy is classified into different sectors to simplify the analysis and understanding of economic activities. For Class 10, it's essential to grasp the sectors of the Indian economy, understand their characteristics, and recognize their importance. This guide will provide detailed notes on the Sectors of the Indian Economy Class 10, using specific long-tail keywords to enhance comprehension.
For more information, visit-www.vavaclasses.com
How to Create Map Views in the Odoo 17 ERPCeline George
The map views are useful for providing a geographical representation of data. They allow users to visualize and analyze the data in a more intuitive manner.
Ethnobotany and Ethnopharmacology:
Ethnobotany in herbal drug evaluation,
Impact of Ethnobotany in traditional medicine,
New development in herbals,
Bio-prospecting tools for drug discovery,
Role of Ethnopharmacology in drug evaluation,
Reverse Pharmacology.
2. THE KAWASAKI PLANT
•The Kawasaki plant was designed to produce a maximum of
800 million connectors per year.
•The plant operated 24 hours a day, seven days a week, 330
days a year.
Three goal of the company were
• Yield on raw material of 99%
• Customer complaints of not more than 1 per million units
of output.
•Asset utilization of 100%
Thus, the major aim of DJC at the Kawasaki plant was to
achieve “the ultimate rationalization of mass production”.
4. Plant layout
Wire to Wire
Connectors
Wire to Outlet
Connectors
Item to Board
Connectors
Board to Board
Connectors
Plating
Plant layout was designed for mass production.
The Kawasaki plant was organized in 4 cells
6. 3 MAJOR AREAS
PRODUCT
• Product design of
most connectors
was standardized to
reduce the number
of product variations
• Economize of raw
materials
• Engineers undertook
extensive value
engineering to
implement cost
saving designs
PROCESS
• It maintained close
relationships with a
few suppliers of its
key raw materials
• Sourcing policy
demanded frequent
delivery which
allowed Kawasaki to
maintain a raw
material inventory
that averaged five
days
PRODUCTION AND
INVENTORY
CONTROL
• To minimize yield
losses, production
runs were
scheduled to be as
long as possible
• It had a relatively
high finished goods
inventory of 56
days.
7. Process Technology
There were several principles which guided the process technology,
they were
• Pre-automation
• Better to use an old reliable process than a new, less reliable
one.
• Absolute reliability on upstream moulding process
• In-house technology development
• Inter-functional co-ordination of all its technology development
activities.
8. THE AMERICAN CONNECTOR COMPANY
The American Connector Company operated four plants in the U.S and two in
Europe.
Each of these plants produced all the four basic types of connectors and each
services a particular customer segment.
Competitive Strategy of American Connector Company
• Emphasized quality and customization
• Customization was an extension of ACC’s emphasis on quality
• Custom orders made up 15% of the company’s total production volume.
ACC had been very profitable, sustaining margins as high as 52%.
while sales had grown from $252 million in 1984 to $800 million in 1991, gross
margins had eroded from 52% to 43% during the same period.
9. The Sunnyvale Plant
• The ACC opened the Sunnyvale plant in 1961 in order to serve the emerging
electronics industries in and around Silicon Valley
• The plant had started off with a capacity of 1 million units per year, but the last
major expansion in 1986 saw the capacity at 600 million units per year.
• The plant’s utilization peaked in 1986 which proved to be a peak year of demand.
Utilization sunk as low as 50% in 1988, but rebounded to 70% by 1991. Using
current demand forecasts, the plant was expected to reach 85% utilization by
1996.
• The Sunnyvale plant produced about 4500 different models of connectors.
10. Plant
Layout
A batch process or modular process was followed for production which is be depicted
by the process flow diagram as below-
11. MAJOR AREAS
PRODUCT TECHNOLOGY
• Customization was an extension of
ACC’s emphasis on quality. Custom
orders made up 15% of the
company’s total production volume.
Production and Inventory Control
• processing lead time for a standard
batch was only 10 days, special
orders took two to three weeks
• It carried a finished goods inventory
of 38 days. While it had high work-
in-progress inventories
13. Existing Situation Situation in USA Remarks
1
Customer
Contacts
close links with the major
computer, telecom and
electronics companies
and distributers in
Japan.
USA has more than 900
suppliers of connectors. Of
these 900, 28 firms existed
with a sales of greater than
$100 million.
have to compete in a new
market without major
customer contacts. Thus, it
cannot leverage this
strength to compete in USA
2
Design
Strategy
The company's design
strategy emphasized
simplicity and
manufacturability, over
innovation.
designs were custom -
produced, usually on a one-
year contract with a single
connector company and
were often accepted as
industry standard after the
contract expired.
.
More customized
product will lead to
more margin, so it has
to follow a new strategy
to enter in U.S market
3
Production
and Inventory
Control
Very large run time to
produce a particular
product
Large variety of product
Need to produce high
variety, so would be very
difficult for it to produce
large variety with large run
time
4 Cost cutting
Used many cost cutting
techniques like replacing
gold with tin
The standard designs were
those which had been
established by the IICIT,
NEDA or by end industries.
Are these changes
accepted in USA market
14. COST ANALYSIS
DJC/Kawasaki 1986 ACC/Sunnyvale 1986 DJC IN USA 1986 DJC/Kawasaki 1991 ACC/Sunnyvale 1991 DJC IN USA
1991
capacity utilization 99% 85% 99% 99% 70% 99%
Raw Material, Product 14.32 10.40 8.59 12.13 9.39 7.278
Raw Material, Packaging 3.27 2.25 1.962 2.76 2.10 1.656
Labor, Direct 7.63 ... 8.393 3.02 3.322
Labor, Indirect 2.30 ... 2.53 0.75 0.825
Total Labor 9.93 8.53 10.30
Electricity 2.47 1.80 1.98 1.40 0.80 1.12
Depreciation 7.63 5.52 7.63 1.80 5.10 1.8
Other 4.12 4.41 4.12 4.24 6.10 4.24
TOTAL 41.74 27.9735 35.203 26.10 23.653 20.24
TOTAL S.P (MARGIN TAKEN AS .50)
0.06261 0.04196025 0.0528045 0.03654 0.0331142 0.028337
33.11 28.37
G.M 1.5 1.4
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
15. STRATEGIES
In Terms of ACC Existing Situation Threat from DJC Suggested Strategy for ACC
1
Process
Layout
The plant was divided
into 5 production areas.
This was a typical
modular process layout.
Modular process layouts
are designed to
accommodate high
variety and low volume
production.
THREAT OF LOOSING 85%
MARKET SHIFTING TO LEAN PRODUCTION
FOR THIS 85% PRODUCTION
2 Quality
High defect rate- 26000
per million units of
production in 1990.
Yields on new designs
was sometimes as low
as 55%.
Manufacturing at two different
assembly line and using TQM
system
16. 3
Quality
Losses - Non-
Scheduled
it is observed that
28.6% of loss in fixed
asset utilization is due
to non-scheduled
outages.
DJC's non-scheduled
outages were only 13.2%
Timely maintenance should
be done
4 Strategy
ACC was characterized
by its emphasis on
both quality and
customization.
DJC would be marketing
itself as a low cost supplier
of connectors.
ACC has an upper hand
Editor's Notes
The main advantage of this continuous running of the plant was to minimize start up and shut down costs.
the plant layout was designed for mass production.
A Product oriented layout works best when the output required is of high volume and low variety.
This layout facilitates high equipment utilization, given there is adequate demand.
The line production process followed by DJC also guaranteed low work in process inventory.
The product is standardized
Disadvantages of Product oriented layout:
Not flexible to handle products of high variety.
In cases of insufficient demand, this may lead to high Finished Goods inventory.
High volume is necessary for this type of layout to prove profitable.
In 1991, the plant produced only 640 stock keeping units (SKUs), a relatively small number for a plant its size
To economize on raw materials, the designers adapted some pins plated with tin rather than gold. Also, to simplify packaging, DJC packaged its connectors only on tape and reels 2000 connectors per reel/tape, even though the industry standard was 1500 connectors per tape/reel
: These activities were done to make the production process suitable foe highly reliable automation. Specifying raw material quality and process tolerance levels were also some pre-automation activities.
Thus, to ensure smooth runs, processes were operated below maximum speed. Emphasis was placed on eliminating unscheduled downtime.
an important process in the manufacturing of a connector, it was important to ensure the molds were fault free. Regular maintenance and replacement kept the mold yields in excess of 99.99%. Even with such stringent measures, DJC managed to keep it’s annual cost per mold at $29,000 compared to $40,000 for ACC.
The Sunnyvale plant was divided into 5 production areas: Terminal Stamping and fabrication, terminal plating, plastic housing molding, assembly and testing; and packaging
Advantages of Modular Process:
High degree of Product flexibility
Suitable for High Variety, Low Volume production
The production takes place in modules, so that a large variety of output options can be obtained by combining various modules
Disadvantages of Modular Process:
Not suitable for mass production
High cost and low utilization
High Work-in-progress Inventory
As is evident from the aforementioned process layouts and discussion regarding the same, the DJC Kawasaki layout is made primarily for mass production with high volume of standardized products being produced; while the ACC Sunnyvale plant layout suggests that it was designed for a high output variety with low output volumes.
Observations from Cost Analysis:
It is unknown whether DJC can achieve such high utilization in USA, if it sets up a plant in USA. As the demand in USA was low and competition high, it is evident that running a plant at 99% capacity utilization will be a tough task for DJC.
Given the connector was a very small and inexpensive component of electronic equipment, it formed only about 2% of the product cost of the end product. As electronic equipment has a short lifespan, thus flexible delivery is a more important aspect than cost of the connectors. As DJC would be rigid with delivery dates, a customer would pay a few thousand dollars more to ACC to have a special order made than lose out due to rigid schedules of DJC.
It should be noted that the prices below are the prices on an average. As DJC made standard connectors it’s per connector price would hover around the below price. But, ACC had 15% of its sales in custom build connectors, where it would be able to charge a premium. Thus, ACC has the ability to reduce the prices of standard connectors below the price of DJC and offset the additional cost with higher margins from custom build products. Thus, ACC’s standard products can be as competitively priced against DJC’s, all the while making good margins in the sale of custom built connectors.