1. AMERICAN CONNECTOR
COMPANY CASE STUDY
XIMB students’ presentation

2. A Brief Comparison
2
ACC
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Quality and
Customization
Design and
Performance
52% to 43%
decrease in gross
margin from 19841991
DJC
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Highly efficient
manufacturing
Attention to
customer needs
No customization
Never alters
production schedule

3. Comparison of Manufacturing
Strategies
3
ACC: Sunnyvale plant

Production Type : Majority Batch Process, rest Job Process

Average Production Rate : 420 million units
(600 million units maximum)

Competitive Strategy : Flexibility and customization

Production Areas: 5 Separate Areas - Terminal Stamping and Fabrication,
Terminal Plating, Plastic Housing Molding, Assembly and Testing, Packaging

Production Planning:Operates 120 hours/week on a 3 shift per day, 5 day
per week schedule, 50 weeks of the year.

Lead Time:Relatively long lead times, short production runs (averaging 1.5 to
2 days), and small finished goods inventory (38 days).

Capacity Utilization : only from 50-85%

Outsourced design of equipment. Emphasized cutting edge equipment.

4. Continued …
4
DJC: Kawasaki plant
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Production type : Completely Continuous Flow
Average production rate : 700 million units
(800 million units maximum)
Competitive Strategy : Low cost production, standardization and superior
design
Production Areas : 4 Production Cells with Terminal Stamping, Housing
Moulding, Assembly, Packaging
Production Planning : Operates 168 hours/week on a 24 hour per day,
330 days a year
Lead Time : short lead-times, large finished good inventory
Capacity Utilization : 100% utilization
All technology in house. Emphasis on older technology. Equipment bought
from vendors changed to suit needs.

5. Impact of manufacturing strategy
on competitive objectives
5
ACC: Sunnyvale plant

Low Cost

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DJC: Kawasaki plant

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Highly automated process
High WIP inventory, so
number of employees
increased
3shifts/day,5days/week,
capacity utilized is 70%
approx.
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Product innovation

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Wide range of products
Superior design
Less investment on
technology
No quality control
Low Cost

Less inventory
Reduced workforce
No start-up & shut-down
cost
Standardized products
Location advantage
Connectors packaged in
tape & reels
Product innovation

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Copied from US designs
Innovative ways to
produce developed, preautomation, in-house
technology

6. Impact of manufacturing strategy
on competitive objectives (contd.)
6
ACC: Sunnyvale

Reliability

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Latest production
equipment used
High defective rates on
new products, but no
defective product is sent to
customer
Flexibility

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Flexible
Customized products
Production schedule
changes often
DJC: Kawasaki

Reliability

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Old reliable process used
in quality control
Molds checked regularly
Flexibility

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Not much flexible
High finished product
inventory
Production schedule is
more or less fixed

7. Changes required in DJC for U.S.
plant
7
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Emphasize on Marketing/Sales
Invest in new technology
Increase customization and number of product
variants
Should be more flexible
Production scheduling should be improved

8. Threat for ACC if DJC opens a new
plant
8
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Cost of raw material –
 $12.13/1000 units for DJC
 $ 9.39/1000 units for ACC (But due to cost advantage
of US, DJC’s material cost will come down to $ 7/1000
units approximately.)
Cost of labor –
 $10.3/1000 units for ACC
 $3.77/1000 units for DJC (But this will increase to $6
due to more labor requirement)
DJC’s highly efficient style of production may attract
buyers who need standard products

9. Continued …
9
Policies of DJC
Impact on ACC
Cost savings will be high (Cost per 1000
units will be 20.241)
Higher margins for DJC. Thus profits of
DJC will be higher compared to ACC.
(Cost per 1000 units will be 33.79)
Frequent deliveries will make the
customers satisfied with DJC
ACC will lose its customers.
Lower rate of defects at DJC will improve
its image and also cut down on costs
Adverse effect on ACC.
Process at DJC fully automated.
Thus DJC will offer products at a faster
rate than ACC.
DJC always updated with the
advancement in molding technologies.
ACC had not bought new equipment in
the past two years. Thus they will be
producing at a slower rate than DJC.

10. Recommendations to ACC
10
Suggested Change
Current Scenario
Improve tech development.
Presently its 12.8% for Kawasaki ,6.8%
for Sunnyvale
Improve employee productivity
At Present: 7.45 m for Kawasaki, 1.06 for
Sunnyvale
Improve utilization by focusing mainly on
increasing plant operating time
At Present: (330 days/year-Kawasaki, 3
shifts/day,5 day/wk,50 wks/yr for ACC.
Decrease raw material inventory size
5 days for Kawasaki, 10.8 days for
Sunnyvale.
-
Bring in a degree of standardization for
orders
Focus on reducing depreciation and
other costs
-
Study cost cutting policies of KW and
implement the same
Total of 6.04 for KW while total of 11.20
for Sunnyvale.

11. THANK YOU FOR YOUR PATIENCE…