Design & Manufacturing

 

Question: What is Design & Manufacturing’s biggest problem?

 

Answer: Design and Manufacturing’s biggest problem is its reliance on stability.

 

Supporting Case Observations:

  1. People
    1. Sam Regenstrief
      1. Founder still very active in company (p. 10, ¶ 1)
      2. Other interests, such as Regenstrief Institute, may pull attention away from D&M [1]
      3. If founder leaves or dies, company may lose sales and will lose money[2]
    2.  Labor
      1. D&M relies on low labor costs for large profit margins (p. 6, ¶ 1)
      2. Keeping informal structure without ‘red tape’ will be more difficult as company grows
  2. Materials & Process
    1. D&M relies on affordable materials
      1. Steel is one of the most important materials in dishwashers[3]
      2. If there is a disruption in steel production, the price of steel will go up.
        1. Over the course of the 1970s and 1980s, there may be a decrease in the amount of steel produced around the world [4]
      3. If materials are more expensive, then production costs go up and profit margins go down.
    2. D&M relies on quality control to keep repair costs down
      1. D&M spends a lot of money improving the quality of their products (p. 9, ¶ 2)
        1. Rigorous quality control to ensure they don’t have to pay for repair services. (p. 9, ¶ 3)
      2. 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.
    3. Time
      1. D&M relies on its position in the market
        1. As the market grows, the number of competitors grows.
        2. If a competitor comes out with a much better product at a lower price, they can suppress D&M. (p. 9, ¶ 7)
        3. As time goes on, more research goes into product enhancement; another company may develop a better product.

Weaknesses:

  1. Case study is mostly anecdotal; people may not be telling the whole truth when being interviewed
  2. D&M is actually trying to keep themselves at the top of the field by devoting resources to new product development.
  3. 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