The project describes the supply chain of american connector company and the problems faced by it to compete against competitors.

1. AMERICAN CONNECTOR
Submitted by:
Group 5
Section – D
SHRUTI MITTAL 13DM180
SONAKSHI GOVIL 13DM186
SREEVATSAN NATARAJAN 13DM190
TARUN MANGAL 13DM204
UDIT JAIN 13DM206
VANSHIKA GUPTA 13DM212

2. Problems faced by ACC
What are the major issues faced by ACC in their operation in US?
 Reducing margins 52% - 43%
 No new technology has been used by the company in their operations
 Large number of models (4500) leading to number of SKUs
 Work in progress inventory is high
 Yield on new design products as low as 55%
 Processing lead time : 10days for standard product & 2-3 weeks for special orders
 Production run is 1 week (rarely) and 1.5 - 2 days (mostly)
 Finished good inventory of 38 days
 Capacity of 600 million
 Time for plastic housing is much less than terminal stamping and fabrication, thus
synchronization problem at assembly area
 Schedule frozen for 30 days in advance

3. Option 1
Should ACC be worried of DJC’s new plant in America?
 Answer is a Definite YES
 Strengths of DJC’s operation
 Economize on raw material- reducing un necessary materials
 Lower number of SKU’s leading to lower cost of maintenance
 Tin instead of Gold to reduce cost and work in low power application
 Low Work in progress inventory leading to lower staff
 High finished good inventory

4. Option 1
Analysis of Option 1
 Raw Materials Cost is relatively cheaper for DJC if they move into the US Markets.
 Labor Cost might increase a little but the impact of this with other factors such as
utilization of the plant negates this.(add cost)
 Cost of Quality is also high for ACC’s Sunnyville because they only inspect the final product
while DJC’s Kawasaki Plant has process level inspection to dig into the details of the
process that is the bottleneck to the process overall.
Cost Category DJC (Kawasaki) DJC (Plant in US) ACC Plant
Raw Material 12.13 7.28 9.39
Product
Packaging
2.76 1.65 2.11
Total 14.89 8.93 11.50

5. Option 1
Analysis of Option 1
 Size of the Workforce is relatively large for ACC compared to DJC because of the # of
products produced. Either ACC can increase its product lines to ensure maximum output
and also have spare capacity or they should limit the set of unique products they have.
This also reflects in their indirect labor cost.
 The Product layout has to be designed in such a way that the utilization of the resources
such as factory space has to be maximized.
 Raw Material inventory of ACC is almost double of DJC. Analysis of this requires more data
on availability of the same. Assuming the parameters are same ACC should work on
reduction of their Raw materials Inventory.
 WIP Inventory as mentioned in the case has to be avoided due to obsolesce risk. This
reduces the connector output per floor area of the factory space because more area is
needed to store raw materials.

6. Option 1
Analysis of Option 1
 The DJC’s Kawasaki plant works 24 hours a day for 330 days a year. Millions of units are
thus produced in this process and the fixed cost per unit reduces, depreciation is more
justified in this case. Imagine in a 24 hour cycle ACC having approx 2 shifts while DJC
having 3 shifts. DJC could produce more than twice as much as ACC due to its smaller SKUs
 The Core Competency of ACC being its customizable production line is of competitive
advantage in the industry. Many customers could come to ACC rather than DJC for solutions
that can be designed to suit the needs rather than adjust with a market standard. It will
help to differentiate the client from the lot of other producers.

7. Solution
What should ACC do to Avoid a loss of Market Share in case
DJC replicates the Kawasaki Plant in the US?
 Cost Control
 Revamp Quality Control
 Implement a Pull strategy for Raw materials
 Probably Patent designs that make it an advantage as in IPR.
 Rely on Internal Production Teams to come with process innovations rather than relying on
facts and figures of research.
 Improved facility layout to ensure utilization
 Decrease Inventory (FG or WIP). Reduces overall cost of goods sold.
 Remove the least sold Packaging sizes from the lot and reduce some cost.

8. Thank You!!!