Question: What is Design & Manufacturing’s biggest problem?
Answer: Design and Manufacturing’s biggest problem is its reliance on stability.
Supporting Case Observations:
- People
- Sam Regenstrief
- Labor
- D&M relies on low labor costs for large profit margins (p. 6, ¶ 1)
- Keeping informal structure without ‘red tape’ will be more difficult as company grows
- Materials & Process
- D&M relies on affordable materials
- Steel is one of the most important materials in dishwashers[3]
- If there is a disruption in steel production, the price of steel will go up.
- Over the course of the 1970s and 1980s, there may be a decrease in the amount of steel produced around the world [4]
- If materials are more expensive, then production costs go up and profit margins go down.
- D&M relies on quality control to keep repair costs down
- D&M spends a lot of money improving the quality of their products (p. 9, ¶ 2)
- Rigorous quality control to ensure they don’t have to pay for repair services. (p. 9, ¶ 3)
- If D&M were to cut off the warranty date before the projected breakdown of the dishwasher, they wouldn’t need to devote as much money to quality control.
- D&M spends a lot of money improving the quality of their products (p. 9, ¶ 2)
- Time
- D&M relies on its position in the market
- As the market grows, the number of competitors grows.
- If a competitor comes out with a much better product at a lower price, they can suppress D&M. (p. 9, ¶ 7)
- As time goes on, more research goes into product enhancement; another company may develop a better product.
- D&M relies on its position in the market
- D&M relies on affordable materials
Weaknesses:
- Case study is mostly anecdotal; people may not be telling the whole truth when being interviewed
- D&M is actually trying to keep themselves at the top of the field by devoting resources to new product development.
- Number of homes in the US with dishwashers may actually increase over time, which would help D&M sell more dishwashers and continue making profits[5]
[1] International New York Times, 20 January 1988, “Sam Regenstrief Obituary”, http://www.scotsman.com/news/steve-jobs-profile-apple-s-hard-core-1-1302995
[2] The Scotsman, 10 January 2009, “Steve Jobs Profile: Apple’s hard core”, http://www.scotsman.com/news/steve-jobs-profile-apple-s-hard-core-1-1302995
[3] http://www.madehow.com/Volume-6/Dishwasher.html
[4] University of Chicago Press, “The Steel Crisis in the United States and the European Community: Causes and Adjustments”, http://www.nber.org/chapters/c5960.pdf
[5] United States Census Bureau, “How American Homes Vary By the Year They Were Built” http://www.census.gov/hhes/www/housing/housing_patterns/pdf/Housing%20by%20Year%20Built.pdf