Ferguson Manufacturing Corporation Case Study

Answer 1 : The general industry environment was very different from what it was in 1970s and what it became in 1990s. The US connector industry experienced rapid growth and the firms did their best to meet the market demands but as we approached mid to late 1980s their was a decline in the demand which led to large number of suppliers and too much capacity, which led to price wars. The condition became worse during 1990s. there was a downfall in sales by 3.9% and the top ten leader’s share in the market was also down 7.9%. there were many suppliers and which gave the customers the opportunity to negotiate the price. It was also said that the number of connector suppliers might fall to 400 from 900 because of the prevailing conditions. The

Their competitive strategy included maintain close relations with the computer , telecomm and electronics companies, which presented as an important entry barrier for new entrants in Japan , earlier the harped on the designing of the US Companies and aimed to replicate that and also make necessary geographical improvements. The company had earlier held sale of close to 50% and with rising cost and labour prices company decided to set up a continuously operating plant in Kawasaki, Japan. Its current position was such that after building the Kawaski plant which is apparently the most efficient of the plants and which has helped DJC grab large market shares they might enter the US market with a similar in operation plant entirely being set up in USA, despite the fact that USA was a very crowded market DJC had the potential to disturb the market and grab the market with a plant like

Process Layout: Production layout in DJC is product based which constitute of 2-6 production lines individually for each product. The only thing which is common in operation is plating. Material handling and manpower cost is lesser since each process is aligned successively. ACC used 5 production areas for the process: terminal stamping and fabrication, terminal plating, plastic housing module, assembly and testing, and packaging.

Answer 6 :

American Connector’s management at Sunnyvale plant should do the following : it should stick to its strategy of providing customised products to its customers with high quality and efficiency. It should limit the number of SKUs , it should reduce its WIP goods, it should aim at producing standard size connector , it should build a continuously operating fully automatic plant like the Kawasaki Plant which will help them reduce human errors. Avoid manual checking of defected pieces to deliver high quality by having a quality control team