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Assignment on

Strategic perspectives in manufacturing

and Management

Cases
General Motors: Packard electric Division
&
Plus Development Corporation

Submitted by:
Sameer Badheka
Roll No: 72
PGDIE-39
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General Motors: Packard electric Division

Q1 ) How Packard electric decision involvement in the product development
program of customer helped in value addition?

A1)

i. Their organisation structure helped in correct and appropriate new product

design. Different section helped in different stages of product development
and different purpose.
ii. Residential engineers (around 100) help in proper coordination between
requirement and design phase.
iii. Shifting from level 3 supplier to level 1 category supplier helped them to add
value to their organisation.
iv. Also the customer base of the Packard electrics was 25% from non GM
clients. So this helped them in all round development of company
v. New product technology development initiative helped customers to develop
faith in them

Q2) Enlist all critical issues to compare RIM and IHG options

IHG
1 Injectable hardshell grommet
2 Had comb like structure with resin
used to seal
3 Design not much flexible so
required changes with change in
models
4 Received many ECOs
5 Leak proofness not reliabile
6 Requires 150 odd dimensions to be
given for design
7 Can handle 150 odd wires at a time
8 IHG costs $4.4
9 IHG requires 600 hrs of engg of
$50/hr i.e. $13000 in retooling cost
10 IHG is 80 mm longer than RIM
grommet
11 IHG machines requires 250 sq feet
less
12 IHG technology was proved
13 Raw material used were non
hazardous
RIM
Reaction injection molding
Had a chamber like structure with reaction
solutions used to seal
Is flexible design
Will not require much ECO
Leak proofness better then IHG
Requires 30 odd dimensions to be given
for design
Is very flexible design with many cables
can be handled at a time
RIM costs $7.00
RIM requires only 100 engg hours i.e.
$7000 in tooling cost
RIM is 80 mm smaller than IHG
Rim machines require 250 sq feet more
making it $3750/machine @ $25 / sqft
RIM technology required costly
equipments
Raw material used were toxic and
hazardous

14 Equipment doesnot require standby Equipment requires stand by as possibility

of getting clogged
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Q3) What are the strategic decisions possible and available at this point of
time? Which decision you will recommend and why?

A3)

Schramms options available are

i. To go allout for RIM development ( aggressive strategy)

ii. To do parallel and phase-wise development of grommets of both materials

(intermediate strategy)

iii. To continue with the IHG (safe strategy)

Besides this the option which i would like to recommend is to launch RIM technology
in a selected batch of vehicles and watch for their performance under controlled
conditions. This may execute in the manner that produce a batch of vehicle of 100
with RIM technology and distribute it to the staff members and watch its performance
for a year or so then if successful go for RIM at full-fledged production. This will give
more time to research and development as well as help in having a supportive data
to launch or to not to launch instead of going by plain risk taking tendency. This
mixed approach will also help in avoiding the compromise with safety of new vehicle
as it is directly concerned with safety of the passengers.

Q4) Develop Product development project time line of RIM

A4)

• July 1986 till 1987 Mcfall worked part time (around 10% of his time) on RIM
development
• Early 1988 developed many other configurations
• During this period he worked with Turnbull a resident engineer who was
working on customers development centre planning to launch a model in
1992. Customers’ interest and risk taking ability gave impetus to RIM project.
• January 1989 review by client about the RIM progress but were dissatisfied.
• An overall project schedule is as given below in exibit 1
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Exibit 1
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Plus Development Corporation

Q1) How far behind schedule do you think for the current development effort
is? How import is to stay on schedule on such product development schedule,
Recommend.

A1)

The product may lag 3 to 4 months behind as the Japanese Engineers are taking
time and also they need another 3 months for product technology transfer and
maturity testing. Also it involved continuous change of specification to get the
manufacturability and quality.

It is very important to launch before the schedule because following reasons:

i. To achieve the first mover advantage

ii. They may lose revenue because of the not launching the product before the
Christmas

iii. Customer may think that this product is just a hype and the reality and inturn
lose the customer faith

iv. The other competitors may sense the opportunity to launch similar product
before Quantum as Quantum is involving lot of media activities and this
obviously send some signal to competitors to think to develop similar kind of
product

Q2) What is the different about the way the Japanese partner approach the
product and process development and the way Quantum approaches
development?

A2)

There are lot of differences between Quantum and JEMCO in product and process
approaches.

Process Development:

The JEMCO’s manufacturing philosophy was of testing at every step of the

production process

In simple terms:

i. Provide the dimensions and tolerances that are required on each part up front

ii. Create elaborate assembly tools

iii. Check at every step of the process

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Also they invent new tools if required as not in the case of Quantum

Product Development:

i. JEMCOs motto was “total cost down” and its target production yield was 99%

ii. They follow specification: less than 10mm was not acceptable specification,
9.8mm has to be specified

iii. JEMCO wanted each part to fit into original part, including even screw

But Quantum Engineers approach was first design something and modify later in the
next stage in terms of quality and other things.

For ex : Quantum engineers used to give specification less then 10mm, but JEMCO
people want exact 9.8mm as mentioned above.

Q3) Risk Management in Product development, how this issue is addressed in

this case of Hard card Product?

A3)

They planned to reduce the risk like handling the cultural issues like language
problem. They conducted language classes also, knowledge transfer to JEMCO
engineer on digital technology which will help them to understand the design better.

But still they have failed to achieve the targets in the specified period of time.
Because of the time taken by JEMCO engineers to understand the technologies and
the language problems, this they would have considered while setting up the
deadline with proper risk management strategies.

Q4) How the low cost and satisfactory was targeted by Plus Development
Corporation?

A4)

Plus focused on adding value in its own areas of expertise, design and marketing,
and to avoid trying to be the expert in everything. Apart from the manufacturing
capabilities of the JEMCO, they have concentrated on source as well to reduce the
variability as well as the cost reduction with the vendors.

The criteria for source evaluation:

i. Trust

ii. Quality/monitoring

iii. The supplier’s process philosophy

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iv. Delivery capability and timing

v. Aggressive pricing

vi. The use of technologies to back up the supplier’s claims

Plus managers looked at a vendor’s process closely and tried to learn it inside and
out, primarily to determine if the vendor had control or if plus could help it again for
better control

They have negotiated on following things with the vendors:

• Plus asked vendors to indicate when a spec was especially difficult or

expensive

• Presented a budget with 20%-30% below the street price

• Promised single source the part and offering the help of required

Q5: How the product idea conceptualized by Quantum & what the market
segment identified and what are the issues taken into account while defining
the market?

Ans:

• Inspiration from customer conversations about low cost disk drive system

• It integrates disk drive, disk electronics, controls and no cables are required

• Envisioned solution: ‘Tin can surrounded by a few chips’

Following were the issues expected by the management:

Marketing:

• No clear standards to shrink the disc drive and controller for the personal
computer market

Technical:

• Too big components to downsize beyond current size

• Hard disks are larger than PCs

• In addition, the supporting electronics, in the form integrated circuits, were not
integrated enough to allow them to fit into a small space

Targeted Segment:
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Actually Quantum business was Targeting Niche market by targeting the production
of storage segment to provide the hard discs instead of computer market, which is
very volatile in those days.

But IBM’s entry into computer market created volumes of demand for PCs.

With this Plus Development Corporation decided to develop Hard card (on card
design became ‘Hard Card’ , a 10 MB hard disk integrated into a controller card that
would slide into a single IBM PC card slot) to target the customers who want convert
their PCs into XT, through retailer and other distribution channels.

Q6) How low cost and satisfactory quality incorporated?

A6)

Plus Development Corporation had selected JEMCO for manufacturing who are
leaders in achieving high volumes in short period of time also having
manufacturability skills. JEMCO forced Plus to change the design of the product if it’s
not giving good manufacturability also it saves less. This improved the
manufacturability also they followed the systemic and check quality at each stage of
production.

To reduce the cost Plus had concentrated in all the aspects starting from Source
vendors to manufacturers.