ACC

Case Study Srini, Sanjiv, Manick, Kumaresan & Chalapathi

Electrical connectors Industry - Over view

Product
2 main body parts (plastic housing & metal socket pins Eng intensive/critical to product performance To meet space, weight, cost, quality & reliability

Market
Product application (Military, aerospace, Ind.electronics, Telecom equipment, Consumer electronics)

Designs : Standard and Customised

Elec connectors ..,

Price : based on low to high technology, Low (Phone jack) to High cost (military) Industry: Rapid growth in capacities, too many players Customer : has leverage to demand reduced prices, improved quality, faster delivery Market share : No. 1 AMP 16% $2.6 billion Tier 2 companies ACC & DJC $500-800 Mil range

ACC, USA
Competitive strategy
Customer centric, Customised solution provider Technology Leader High quality, Superior design Responsive, Flexible production

Environment & Market

Highly matured /fragmented market 1,200 players 2nd tier player High M& A activities Pricing pressure

Labour intensiv e

ACC
Flexible productio n Strong Eng & Mktg High quality & Superior design High Custome r Satisfact ion

Low utilisatio n

High WIP 10 days

Custome r collabor ation

Customer centric

High defect rates

High no. of SKU 4,500 Solution provider

High producti on cost Customis ed design Strong Eng & Mktg Less Finished goods

DJC, Japan
Competitive strategy in Japan:
Cost Leadership Close links with buyers (Entry barrier) Simplicity in Design (low SKUs 850), manufacturability over innovation High operating efficiencies (Economies of scale)

Environment & Market

High labour and RM cost Rising Yen & import penetration High patronage of domestic industries

Low SKU s

DJC, Japan
Simple Design & product standardiz ation High Asset Utilizatio n Technolog y Developm ent Division

High FG

Extensiv e Value Engg High Yield Pre Automat ion Continuou s Improvem ent

Cost Leader ship

High Quality and Low rejectio n

High Operating efficiency Low RM and WIP

JIT & MRP

Less work force Compac t Layout Automati on

Reliable Technol ogy

ACC Vs DJC in USA

The threat is for DJC
Highly fragmented and customised market US Market more advanced High variety, Matured market Cultural fit DJC positioning->Less Market orientation

Recommendation to ACC
More focus on Differentiated products and Niche segments, In house technology Out of two plants, dedicate one for standard products & other for differentiated products Work on improving operating efficiency, optimise work force, automate, reduce rejections Look at out sourcing option for standard parts without plating

Thank You