Page 65 - AIMA : Foundation Day Souvenir

• Target markets were not identified.
• Core competencies required to build this business were not identified. A good business process, sound philosophy and proper perspective were felt wanting.
• The pricing factor had probably killed the project. There was total disconnection between expectation and reality. For example, the prevailing thought was that the management wanted to sell a milling machine at $10,000 per piece, while Taiwan sold similar machines for approximately one fourth the price. While Taiwan sold about 36,000 machines a year, Bridgeport’s numbers were at best in triple digits annually.
• The casting factor: the group’s own foundry was dictating the price, quality, and quantity of casting supplied. The foundry’s expectation was a price of $1.40 per kg of casting, which could otherwise be sourced from Taiwan at that time for thirty to fiftyfive cents per kilogram of casting and in fully finished component condition!
• Since five years were spent without producing a single product, the accuracy and reliability of the equipment, tooling, and capability of the people were not proven and established.
• Lead times for various activities were not determined. Operations were not standardised and throughput times were not known.
• Milling heads were to be procured from the collaborator. The prices of these were not competitive and in fact, were exorbitant, thus making the product unsellable. The brand may have had its name, but customers knew alternate sources for similar machines. The opportunities in machining centers presented more excitement, but the collaborators wanted this to be a subsequent development.
• The strategic intent of the local partner was not clear—it lacked clear philosophy, principles, and value systems to govern this joint venture.
• The plant and equipment supplied by the collaborators were used and rebuilt machines; they were never put to test here and were never beaten for production. The capacity, capability and reliability of this line was not proven and established.
Formulating the strategy
The long-term objective was to develop a supply chain from within Indonesia that would include our group companies. But in the shortterm we had to address market needs—the reputation of being a reliable machine tool manufacturer. Considering the training and development time required within, we needed a strong short to medium-term strategy that could catapult us into the global markets and help understand the customer requirements and establish ourselves as reliable suppliers.
Considerations
Buy gears and castings from in-house group companies. We had to test our ability to produce all components in house. Could we develop them all simultaneously? Were we geared up
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