INDUSTRY OVERVIEW
Connectors are used to attach wires to wires and other electrical components. In 1991, this was a fragmented $16 Billion Industry. DJC and American Connector Corporation were companies in the second tier of the market, with sales in the $500 million to $800 million range.
IMPACT OF DJC’S ENTRY INTO THE US MARKET
The year 1991 witnessed a sharp decline in sales (3.9%). The abundance of suppliers forced competition on the basis of quality, cost and quick delivery. Hence, the already struggling American companies like ACC were wary of the entry of DJC in to the US market.
THREAT OF DJC TO AMERICAN CONNECTOR COMPANY
Mr. Larsen, VP of ACC believes the plant at Sunnyvale is struggling with operating problems including deteriorating quality and increased cost. With better manufacturing methods and superior quality, DJC would be able to snatch some portion of ACC’s market share. Some of the important factors that might tilt he balance in favor of DJC are:
• Manufacturing excellence has been the strength of DJC, driven by continuous process improvement and careful attention to customer needs. Their cellular manufacturing approach by breaking the factory into small, homogeneous and cohesive productive units makes production and quality control easier. Continuous plant operation and good plant layout ensured maximum asset utilization and low work-in-process inventories and relatively higher finished goods inventory.
• Pre-automation meant that production process could be automated after it was understood, designed and laid out which ensured quick identification of problems and correction, ensuring quality manufacturing. In-house technology development and inter-functional coordination of all its technology development activities creating customer value, process efficiencies, and differential advantage for the firm.
• Emphasized high supplier quality by enforcing strict quality standards. Emphasis on just-in-time delivery of raw materials ensured low inventory and hence, lower warehousing and inventory holding costs.
COMPETITIVE COST ASSESSMENT AND DJC’S POTENTIAL IN US MARKET
Exhibit (2) shows the cost assessment for both ACC and DJC with their present cost structure. ACC has significant advantage in its material cost because of its geographical location whereas DJC has advantage over its labor cost. DJC has efficient production system and employs less labor which facilitates them in reducing their labor cost. DJC’s wise investment in technology development helped them in achieving less depreciation cost. For DJC, depreciation cost contributes 6.89% to its total product cost whereas for ACC it is 15.09%. Overall production cost for DJC is lower by $7.69 when compared to ACC.
DJC’s potential in US market is analyzed in exhibit (3).
First of all an analysis of the packaging machine investment’s hurdle rate is required. I will use comparable firm parameters approach to figure out the hurdle rate (WACC) of the firm using the information provided in Exhibit 5. The cost of debt should be calculated using the bond information given in footnote 2 of case under Exhibit 2. The cost of equity should be calculated using the Capital Asset Pricing Model.
Another key driver for resurgence of U.S. manufacturing is supply chain innovation and according to a survey by Supply Chain Digest of 340 supply chain manager in 2012 showed an important decision driver for off-shore manufacturing is speed to market. In order to reduce the time of product to market corporates leaders are locating manufacturing facilities in U.S. which enhances the ability to understand customer requirements and react quickly throughout the entire value chain when requirements change hence favor production that is slated for U.S. consumption (Ludwig & Spiegel,
Kuiper Leda lacks an effective Inventory Management to handle properly the increase in demand of stock and production. An inventory management plan would be capable of forecasting errors in production, client-required service levels, total lead time in manufacturing a unit or batch of the product, and demand priorities. Inventory control is a challenge currently because of the size of Midland Motor's order. In order to meet the demand the company needs to increase the inventory which increases the inventory costs. KL have an opportunity of using the Just - In - Time method of inventory control which eliminates waste by making the resources and labor available only in the time and amount required. It will help increase productivity, product quality and work performance while saving inventory costs for the company. (Curtin, 2008). Kuiper Leda also needs to keep in mind that they will still have to fill orders from other clients that have previously placed orders or even new customers.
The company has a very good inventory control system. After they are able to locate good quality suppliers that are able to meet the demand of the company, they then strive to maintain those relationships. They have systems in place to forecast their future needs and then have set out to be able to maintain a supply on-site so they can meet the demands and not run out of the product. They also need to make sure that they are able to store the materials so that they are able to maintain the quality that the company needs.
Cisco faces intense competition in the networking and communications equipment markets (Cisco Systems Inc. SWOT Analysis, 2013).Cisco also faces price competition from rival competitors in Asia, mainly in China. The company also faces competition from customers to which it licenses or supplies technology. The nature of networking requires partnerships; the company must cooperate and at the same time compete with many companies to achieve its objectives. The inability to effectively manage these complicated relationships with customers, suppliers, and strategic alliance partners may have an adverse effect on Cisco’s business. Intense competition will continue to impact Cisco’s operating results, financial condition and market shares of the company in the future (Cisco Systems, Inc. SWOT Analysis, 2013).
Continuous improvement (CI) refers to a philosophy consisting of improvement activities that increase successes and reduce failures in a production process (Bhuiyan & Baghel 2005, p. 761). It involves activities and processes that focus on continuous and incremental innovation (Bessant et al., 1994, p.17). CI is a new approach that enhances productivity, performance, and achieves competitive advantage needed in the highly competitive industries. It may also serve as a complementary approach to other quality improvement initiatives such as total quality management (TQM) (Pike, Barnes, & Barnes 1995, p. 23; Larson 2003; Lassen, Gertsen, & Riis 2006; Oakland 2007, p. 227). The purpose of this research is to explore the application of production systems engineering methods in the CI at manufacturing plants.
Our commitment to steady, long-term improvement in our products and processes is the cornerstone of our business strategy. To achieve this objective, we must work to continuously improve the overall quality of our design, manufacturing, administrative, and support organizations.
It was the year 1987 when the Gartner Group popularized the form of full cost accounting named Total Cost of Ownership (TCO)(author, Gartner Total Cost of Ownership). Originally TCO was mainly used in the IT business sector. This changed in the 1980’s when it became clear to many organizations that there is a distinct difference between purchase price and full costs of a products ownership. This brings us towards the main strength of conducting a TCO analysis, besides taking the purchase costs into account, which consist of the amount a money an organization pays for the required service, product or capital outlay. It also considers 1. Acquisition costs; these can consist of sourcing, administration, freight, and taxes. 2. Usage costs, which consists of the costs associated with converting the given product or service into a finished product. And finally 3. End of life cycle costs; the costs or profits incurred when disposing of a product. TCO can be seen as a form of full cost accounting; it systematically collects and presents all the data for each proposed alternative.
Reducing risk ; reducing the quantity of manufactured so that reducing burden of stock and burden of frequent discount sales
Application areas of electrical engineering industry involve control, generation, and delivery of electricity for domestic and industrial purposes. Some of the commonly used electrical engineering industry products are transformer, circuit breaker, battery charger, electric furnace transformer, dimmer switch, light switch, adapters, fuse, welding generator, MP3 player, FM modulator, power supply battery tester
The modem assembly line pours out finished products faster than Taylor could ever have imagined. This production "miracle" is just one legacy of scientific management. In addition, its efficiency techniques have been applied to many tasks in non-industrial organizations, ranging from fast-food service to the training of surgeons.
The second way is to achieve low direct and indirect operating costs is gained by offering high volumes of standard products and offering basic no-frills products. Production costs are kept low by using less parts and using standard components. Limiting the number of models produced to ensure larger producti...
Cisco incorporated has grown significantly over the years, since its inception and has established itself as the number one technology company throughout the industry. Initially, Cisco started as manufacturers of modems and routers, and has expanded its scope over the years. This paper will attempt to address Cisco’s operations and strategies in foreign markets it will also delve into the strengths, weaknesses and threats in the political, legal and economic environment in which it operates.
The business environment is increasingly becoming competitive and challenging. In the recent past, manufacturers have found themselves facing the threat of dwindling profit margins due to unfortunate global events such as the 2007 global financial crisis and the on going Europe economic crisis. The need to improve operation efficiency so as to ensure current and future investment yield the highest rate of return has therefore become extremely important. Manufacturers are now actively engaged in, managing their costs, Research and Development, adopting best procurement strategies, among other Actions. While such actions might eventually lead to positive results, additional business value can be achieved through proper management of the supply chain (Waymer, Ivanaj & Mussa 2009; Krivda 2004).
In this report we want to know how process in manufacturing is done, what they consider in this manufacturing process and different organizations in production process.