American Connector - Djc Kawasaki Plant

Background

Electrical connector manufacturing has become a highly fragmented and competitive industry. Both American Connector Company (ACC) and DJC Corporation (DJC) were among the second tier companies worldwide. DJC is a Japanese corporation, who considers that the highly efficient manufacturing as its absolutely critical to its competitive strategy. ACC is an American company operated four plants in the U.S. and two in Europe, whose competitive strategy was characterized by its emphasis on both quality and customization. With DJC’s big success in its home country, Japan, ACC is facing the threat that DJC would enter to the U.S market.

Operations Strategy Comparison

DJC’s corporate objective was to maximize its profit through highly efficient manufacturing processes and emphasizing on simplicity product design and manufacturability over innovation. Initially, DJC product designs were based on reverse engineering of other companies’ designs, including those of ACC’s connector. Later on, DJC adapted the designs to economize on raw materials and simplify manufacturing. The importance of manufacturing was reflected in the organization of the company. The manufacturing division had more power in altering production schedules, product mix and lead times than the marketing division.

The DJC’s Kawasaki Plant was a highly automated, continuously operated plant designed to ultimate rationalization of mass production in order to meet DJC’s three goals: to achieve asset utilization of 100%, to achieve 99% yield on raw material and finally to minimize customer quality complaints. This high level of customer satisfaction is the basis of Six Sigma methodology, which has its roots in Japanese manufacturing philosophy. The reliability of DJC is demonstrated by the fact that non-scheduled non-operating time of DJC is only 13.2 % compared to 23.5% for ACC, while process failure is only 1% compared to ACC’s 8.9%. DJC designed all of its molds and manufactured half of its molds in-house. For the standard equipment sourced from the vendors also, the proprietary design modifications were made in-house. This gave DJC a competitive edge in process technology. DJC worked together with the suppliers to improve their quality and provided technical support if required, which enabled DJC to use the materials directly without inspection.

ACC’s