• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

A Comparison of Operations Strategy between American Connector & DJC (The KawasakiPlant)

Extracts from this document...

Introduction

A Comparison of Operations Strategy between American Connector & DJC (The Kawasaki Plant) CAPACITY: ACC The plant maintains excess capacity (goal of 85%) utilization, with output of 510 million units per year). In 1991, the plant is running at 70% of capacity producing 420 million units per year. DJC The goal is to operate at 100% utilization, producing 800 million connectors per year. In 1991, DJC/Kawasaki operated at 80-90%utilization and produced an estimated 700 million units. FACILITIES: ACC The plant is organized into five production areas - terminal stamping and fabrication, terminal plating, plastic housing molding, assembly and testing, and packaging with holding areas in between steps for work-in-process. DJC The plant is organized into 4 large cells - each of which produced one of the four general typed of connectors - with 4-6 production lines each. Each cell is dedicated to running one basic connector type. ...read more.

Middle

Reliable processes are inherently tied with goals for low defects, high utilization, low process failures, and high raw material yield. WORK FORCE: ACC Sunnyvale employs 396 employees. 54% are direct labor, 56% are indirect labor. DJC Kawasaki employs 94 employees, 68% are direct labor and 32% are indirect labor. Management's goal is to decrease the number of employees over time. PRODUCTION PLANNING: ACC The plant operates 120 hours/week on a 3 shift per day, 5 day per week schedule (called 3x5), 50 weeks of the year (approx. 7,920 hours/year). Relatively long lead times (10 days for standard products and 2-3 weeks for special orders), short production runs (averaging 1.5 to 2 days), and small finished good inventory (38 days) are all manifestations of the plants strategy. These operating characteristics are typical for a plant with a high number of SKUs (4,500) and a flexible production schedule that accommodates customer requests. ...read more.

Conclusion

SUMMARY: ACC American Connector has configured its operations to emphasize flexibility and esponsiveness to customers. This operations strategy leads to higher costs. For example, there are costs associated with flexibility, such as keeping extra capacity (maximum utilization is 85%, rather than 100%). Similarly, there are additional costs associated with offering a wider variety products (increased in total changeover times) and using expensive materials in products (such as gold, rather that tin). Adjusting the productions schedule to suit special orders also adds costs, as do short production runs and lower yielding processes (which result because of small, customized product lots). DJC Like American Connector, DJC has an operations strategy which is closely aligned with its competitive priorities. However, in the case of DJC, the chief competitive priority is low cost. High utilization, strict production scheduling and inventory control, low product variety, and use of less expensive materials in products (such as tin, instead of gold) all contribute to lower costs. Product innovation and responsiveness to customer needs are less valued. With its strategy, DJC is lower cost than American Connector, but less innovative and less flexible. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our University Degree Microeconomics section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related University Degree Microeconomics essays

  1. Lean manufacturing in the turbine engine production

    Built-in quality is much more effective and less costly than inspecting and repairing in quality, especially in more complex and precise nanomaterials products. Accuracy and reliability control refers to a body of statistical and problem solving tools that can help do the job right the first time at design and then at manufacturing as the lean process.

  2. Explore the characteristics of "natural monopoly", and by doing so, relate it to the ...

    a horizontal one in the perfect competition where firms are all price takers. In Figure 2.1, the firm which maximise profit at the point where MC=MR, therefore it will produce at Qm and charge Pm. At this level, the firm manages to have a relatively low unit cost as well

  1. Asses the roles played by science and technology in the construction of c19th and/or ...

    Henry Ford was the epitome of everything in the world of everyday work that the citizens of the 1920s admired. His faults were overlooked or accepted as virtues, his success in this great mechanical and business venture seemed a test of the health of the nation itself.

  2. Chang Koh Metal Engineering Ptd.

    These problems stem from weak hiring policies with persons being hired for jobs that they are not necessarily equipped to do. Andrew has also experienced discipline problems with workers using machinery that is meant to be in maintenance in order to earn extra income.

  1. This project examines the project scheduling of a contract to supply a portal frame ...

    From the inception of the company, the Guyana Sugar Corporation was the largest client. In 1976, the government of Guyana nationalized and merged the sugar estates operated by Booker Sugar Estates Limited and Jessels Holdings to form the Guyana Sugar Corporation, also known as Guysuco.

  2. Production planning and control, plant location and layout.

    In case of poor planning & control of production activities the organization may not be able to attain its objectives &may result in loss of customer's confidence & retardation in the progress of the enterprise. In short, The main activities of production management can be listed as (1)

  1. Manufacturing Strategy.

    Considering this problems I would say, that the company doesn't and didn't have a proper working central control of the investment operations, nowadays where severe competition dominates our everyday (business) life, the companies shouldn't allow their self the luxury of "separated business operating", at least not what concerns "new investments".

  2. Delta Synthetic Fibres Britlon project - Operations management.

    First there is the conversion of plants that already exist, second the building of new plants and the third a combination of both. 2.2 Conversion A conversion would consist on transforming a plant that actually produces some Britlene into a plant that would produce some Britlon.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work