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).
To develop a strategy for WMC’s Detroit plant that is no longer viable because of underinvestment, labor issues and product-process mismatch. This has lead to negative return on assets, high burden rate (6.00) and low sales figures. The report investigates the issues causing the situation. A recommendation to address the Detroit plant will be made based on the findings.
...nufacture its products more quickly and with reduced labor costs while maintaining the desired quality standards.
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.
...ell. The key for them seems to be accurate systems, reliable data, and most importantly cross function communication. As the firm is distributing products with a short shelf life there is little room for error and they have created teams to help guide the supply chain through every step of the way. Communication is always first and rises above all other aspects of the supply chain management in this particular environment.
MDCM: Diversified and global organization, as we read we get the scale of operation as we see that MDCM has location in 35 cities, MDCM Corp., USA being oldest and largest. As the operation is purely manufacturing and operations driven, MDCM does not do any R&D and marketing, they are purely contract manufacturers. Major problem is with the margins, as they do not have any control, which will be managed by their Customer who will be selling to the Consumers. MDCM is sandwiched between and has no control or power to salvage their Margins. MDCM planned for diversification, and started a strategy of acquisition to have economy of scale as there is no other alternative to achieve the Cost benefit, when you are fighting on Cost differentiation. This lead to material mismanagement and dysfunctional operations, as sourcing has red...
According to the article we see that Columbia’s focus on the supply chain was based on an analytic software, which led to an increase in profit, but left out how customers feel about their product and service. Building a direct relationship with their customers will help solve most of the problems discussed, if not all. Columbia Sportswear is a company that can afford to better its customer service, shipping and return policy, by allocating funds that will set workshops with its board-members in finding strategies that will build a better relationship with their customers looking at the different problems identified, their income statement for previous years shows that there has been an increase in Net Income for the past two years, so money will not be an hindrance in tackling this problem. Columbia have shown they have the skills to boost profits, which is shown in the analytic system they implemented and these system cannot run without having experts that will be in charge, these same skills could be applied by their professionals to find strategies that will build a strong relationships with its customers. Their capability is certain because they have been taking steps in other to make more profit, an example will be selling products at the full price rather than the discounted price as discussed in the
In the year 2000, Cisco Systems had delighted in forty-quarters characterized by a staggering growth. At some instance, it had outdone GE as a highly valued business globally. Cisco was faced with the fortunate challenge being unable to meet its demand. As a solution, it ventured into long-term obligations with its major component producers and manufacturing partners. In addition, it also built up its constituent inventories. Because of communication gaps amid the numerous levels of the company’s suppliers, triple, and double orders were implemented in order to lock in limited components in the boom. The company was entangled in a spiteful cycle of theatrically inflated sale estimates. Cisco never saw
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.
Ownership and control of production ; vertically integrated manufacturing operation to enable its constant introducing of new items and also ensure short lead time
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).
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 PDCA (Plan-Do-Check-Act) cycles are introduced by Walter Shewhart in 1930 and continuous enhancement by Edward Deming which known as Deming Cycles. The main purposes and aims of this rotation is to attain continuous enhancement or can be described as to increase the quality of the product and process in term of reducing the number of failures, enhance the effectiveness and efficiency of the process also to identify the problem from the root and solving the problem effectively. For many years, Deming’s cycle or Deming’s wheel are most well-liked approach as a tool to execute in Total Quality Management which this cycle provides a response process and mechanism for continuous quality enhancement due to avoid the potential risk in process. This evergreen process development methodology can be described by four main cyclic steps as known as “Plan, Do, Check, Act”, while finished the final steps, it will continue to start again with the first one and then repeated the cyclic again. As the characteristic of this cycle are repeatedly, the quality of the product and process will be improved since it gives the feedback based on this cycle. Therefore, by implementing this methodology in companies and organizations, the process and actions can be evaluated periodically integrate of new enhancements. Since the PDCA cycle are certainly uncomplicated tools and techniques which can naturally located within the Total Quality Management viewpoint, these tools can be utilized and useful for problem solving process and thus effectively used to sustain the realization for quality management and perfection.
• The supply chain is getting divided. At one time vertical incorporation was the request of the day. Yet the present pattern is to focus on center fitness and outsource more exercises. Along these lines the supply chain is more divided now.
This is the activity carried out by organizations that own production sites, and their performance has a major impact on product cost, quality, speed of delivery and delivery reliability, and flexibility [8]. As it is quite an important part of the supply chain, production needs to be measured and continuously improved. Suitable metrics for the production level are as follows. Order lead-time, the total order cycle time, called order to delivery cycle time, refers to the time elapsed in between the receipt of customer order until the delivery of finished goods to the customer. The reduction in order cycle time leads to reduction in supply chain response time, and as such is an important performance measure and source of competitive advantage [9]. It directly interacts with customer service in determining competitiveness. Range of product and services: According to [8] a plant that manufactures a broad product range is likely to introduce new products more slowly than plants with a narrow product range. Plants that can manufacture a wide range of products are likely to perform less well in the areas of value added per employee, speed and delivery reliability. This clearly suggests that product range affects supply chain performance. Effectiveness of scheduling techniques is another important measure of supply chain effectiveness. Scheduling refers to the time or date on or by which
Improvement in the quality is a continuous process; by discontinuing the continuity will shatter the business competitiveness in the market. Generally, six sigma, lean and Kaizen are being used for continuous improvement by the companies. But in case of manufacturing companies, they need to be more calculative and carful in the continuous improvement is essential but the company should be cautious in not investing in destructive research. It is not possible for implementing the TQM in all process (Ashkenas, 2013).