Acc Vs Djc Case Analysis

ACC’s competitive strategy is to produce superior quality and flexible connectors. Compared with DJC, ACC has a lower profit margin and utilization, higher defect rate, high WIP, and longer lead-time. ACC also utilizes a batch production model as compared to DJC who utilizes a continuous process flow. Based on the cost analysis in 1991, ACC had a lower material cost however DJC had a lower labor cost. According to the cost indices, it is profitable for DJC to move to the U.S as it can save material and labor cost. ACC’s and DJC’s cost from 1986 to 1991 has shown that DJC has adopted a more cost-effective strategy. The convenient location, close relationship with suppliers and limited warehouse are areas in which DJC was able to save with raw material cost. They also have different wage differentials for employees. Those with a higher education level are at a higher differential as compared to lower wage differentials for experienced workers saved labor cost; and old and reliable process and maintenance saved depreciation costs.

In order for ACC to stay competitive, they will need to restructure their organizational operation to meet the needs of an evolving, mass customization market or stay competitive within their current, standardized market.  In order to meet demand, they will need to update their production and manufacturing processes to lower costs and better meet the threat posed by low-cost competitors such as DJC. To accomplish this, ACC must if they want to service the standardized connector market, the mass customization market or both. Depending on the strategy they choose, they may need to invest in a new plant and equipment (specialty market).  They will need to re-evaluate their process flow and reassign employee responsibilities to increase productivity, reduce lead times and decrease WIP if they wish to stay in a standardized market. They will need to focus on continuous improvement to their existing facility to produce low-cost standardized connectors. Additionally, adding statistical process control methods to ensure product quality will also help retain their customer base should they choose to remain standardized.