American Connector Corporation Case Analysis

American Connector Corporation operated a total of six international manufacturing facilities, each producing four basic types of electrical connectors. ACC developed a reputation as a high quality supplier and quality became the focal point of company pride. ACC’s products were recognized for their superior design and performance, but it was their dedication to the customer that differentiated ACC from their competitors. The company’s commitment to customization and technical solutions solidified their reputation. ACC’s commitment to their customization strategy was considered an extension of its emphasis on quality, beyond just meeting manufacturing specifications. ACC’s custom orders accounted for 15% of their total production volume.

Sunnyvale’s leadership understood that quality, technical support, and design leadership was the key to winning orders in the marketplace. ACC’s Sunnyvale plant was conceived in 1961 to serve the electronics industry of nearby Silicon Valley. ACC invested in the expansion of production capacity when demand was forecasted to grow for sustained periods. The depressed electronics market of the late 1980’s resulted in no capacity expansion or improvement of production technology. The production equipment that had once made ACC the high technology leader in the manufacture of electrical connectors was outdated. ACC became more concerned with current financial returns than planning for future profits and was set to suffer the consequences of such

This is down to the amount of automation that DJC uses in its processes. Also because of its concept of making its processes more reliable, controlling inventory and high quality (1 defect per 1 million vs 26,000 defects per million), it did not require workers for monitoring these. Thus, in spite of paying its employees higher than the industry average, DJC is still able to maintain low labour costs. This is down to its efficiency due to automation. Another factor is the amount of asset utilization, which is low in the case of AC which means wasted labour costs.

4. In your opinion, how should each company react to the competition?

ACC can also incorporate the Kawasaki plant layout by having 4 different cells catering to the four broad categories of connectors. This will help in improving efficiency of the process. Also, if custom orders are required, a separate cell/production line can be dedicated to them to make sure that any changes in production schedule due to rush orders does not affect the other products

Reduce need for extensive quality checks by reducing the defect rate. One way of reducing defects was to focus on the moulding technology. The moulds need to be replaced in a more frequent manner (currently have a life of 8 years) and the current technology should be used to reduce