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PRESENTED BY :

ABHINAV MISHRA

ANKIT TIWARI

GAURAV GULATI

NILAYA MITASH SHANKAR

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HPM has to deal with most competitive and hostile

marketplace

Improvements in technology and globalised market isenabling competitors to challenge HPM dominance

The case describes the how HPM positioned itself in themarketplace and ways in which HPM uses technology to

differentiate itself

It also show how company conducted comparison betweenconventional engineering path from product design to market

introduction

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Established in 1925 and is based out of Australia

Started with button molding business and eventually

started making 20 products in 1948

Core Business is in the design, manufacture and

distribution of electrical wiring accessories

Traditionally marketed and sold its products throughelectrical wholesale market

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Dominant player in Australia domestic market and

have managed to break through internationally in

number of special niche

Current CEO : Peter Simons

Managing Director : Stuart Rom

Presently employs 1100 employees and supplies over3500 product lines

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There are nine factories located in Sydney which supply

every part of HPMs manufactured product range

Darlinghurst, Sydney contains operations of design,engineering, manufacture and also distribution

Waterloo, Sydney mainly involves assembly and

distribution

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Being an Australian company, has a strong philanthropicethic and sense of corporate responsibility

Each year contributes in various ways to Australian

Community

Sponsors and supports a number of Australian communityorganizations like National Trust, Kidsafe etc

Funded three year Scientific Research Project throughAustralian Kaola foundation and James Cook University.

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Enjoyed strong position for more than half a century

Still continue have a steady growth by paying attention

to quality and strong product development

In pursuit of this excellence HPM has faced many

different challenges

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I. Product Life Cycle

In 1970 and 1980 HPM product generally had a life

cycle of around 8-10 years

In todays market the company now must contend with

product life cycles with 2 years or less

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Some of the challenges are:

Product Life Cycle

Impact of Technology

Impact of Cheap Imports

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I. Product Life Cycle

In 1970 and 1980 HPM product generally had a life

cycle of around 8-10 years

In todays market the company now must contend with

product life cycles with 2 years or less

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II. Impact of Technology

In the past the imported products had poor qualitythereby providing HPM competitive edge on quality

But now the product imported are having a goodquality

With new technology, competitors can scan theproduct, reverse engineer it and saturate the marketwith cheap copies

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III. Impact of Cheap Imports

Unique in house manufacturing philosophy andsourcing structure

This Australia Made philosophy contributed greatly to

companys marketing success

Logic was to overcome the cheap labor and lowersetup costs of overseas competitors by investing inmore automated technology

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Today the low cost overseas sourcing has reached the point

where a packaged finished product can be sourced out of

China for less than cost material in Australia

This scenario is forcing the HPM to totally reposition its

manufacturing strategy. The manufacture of high volume

and particularly low technology products will be forced

offshore

However HPM is expanding its manufacturing capability in

Australia in higher technology areas

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Companys main strategy to differentiate itself from

low cost competitors is through innovation

Aim is to build on companys strong tradition ofproduct development and looking forward for new

refreshing products all the time

Two important factors enabling innovation in HPM areA. Organizational B. External C. New Product

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Three important factors enabling innovation in HPM

are

Organizational ExternalNew Product

Innovation

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HPM promotes free thinking process

Company structure involves very few rules andregulations, with a deliberate exclusion of set policies

and no job descriptions

There is no formal mission, vision, goals or strategicobjectives set down

Only documentation is in the form of pictorial diagramof business objectives

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Remuneration is highly graded, with executives highly

paid & trades-people drawing 30-40% over the MTIA

award

Design and engineering staff are given the necessary

resources freedom of action, full responsibility, and

opportunity to exhibit initiative and creativity

Enterprise agreement at HPM features following

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Workplace flexibility Quality Assurance for continuous movement

Responsibility for control and work planning taken byoperational staff for their own stock at their workstation

A consultative committee to continuously monitor andreview training for new technology, multi-skilling and jobsharing

The company has also set up a separate research anddevelopment organisation that is constantly looking fornew product ideas

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The ways in which HPM encourages innovation through itsexternal relationships are:

1.

Commitment to governments Intelligent Manufacturingsystems (IMS) consortium agreement for R & D projects

Through this program the company has been able to developstrong relationships with other facilitating companies

Wherever there is research going on within this internationalconsortium, HPM is in an excellent position to tap into thatknowledge and intellectual property

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2.

The company is also heavily involved with a number of

Australian universities

The company provides the funds for an annual

engineering co-op scholarship with the University of

NSW

They are also governors of the Warren Centre, which is

Sydney Universitys commercial arm

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3.

Companys approach to product development is very muchmarketing-led

Innovation inputs come from four different directions:

I. Management think tank: Regular 45 minutes meeting toplay around with ideas and discuss the progress of different

issues

II. Inventors: These people are embraced and encouraged

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III. Salespeople: Salespeople are strategically aligned

with the end user. User knows the problems feedback

generally provides simple and practical ideas

IV. International study tours: The idea here is not to

copy the products shown at the fairs but to stimulate

thought and generate ideas

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Strategy is to concentrate on highly innovative products

Should hold the following characteristics:

1. Where there is added value

2. Where the company has some intellectual property inthe product

3. Where the product cant be copied or will take a long

time to copy

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In satisfying these criteria the company is increasinglymoving toward new electronics technology in an effort to:

1. Increase the product life cycle of their products

2. Differentiate the HPM product in the marketplace

Example:

Placing electronics into products is allowing the companyto do things that could never be done before

The company is not only using electronics in existingproducts but is also moving into the area of providingcomplete electronic systems like OSCAR

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Increased Market Servicing

Coinciding with the development of higher technology products, HPM is alsolooking to increase the number of support services that they offer in the field

In the future the company will offer services such as systems installation,

commissioning, and upgrades to support their products

Developing New Distribution Channels

Future systems will not be sold via on the shelf channel, however, as they willneed to be programmed on-site by someone with the appropriate

programming skills

It is not envisaged that the normal electrical contractor will have these skillsand hence new distribution channels and a new style of contractor will berequired

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Follows Vertical Manufacturing strategy

Makes its own mouldings, screws, pressed metal parts,

production tools and equipment, and robots

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The flexibility of designing and making their ownequipment gives the company an advantage in creating

a fit between the technology it introduces and the goals

of the technology introduction

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Design Done on CAD

Component Warehousing

Automatic manufacturing of components

Assembly, sub assembly by PLC robots

Manual final assembly of products according to customer

Fully Automatic testing

Automatically Packaging

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HPM prides itself on being an early adopter of thenew technology

Introducing new technology when it is early in its life

cycle can bring many benefits, as it may let the early

adopter get the jump on its competition

Because decisions must be made without provenevidence of the benefits, the implementing company

must be very thorough in its decision-making process

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Any major capital purchases must comply with twoprimary criteria

Strategic Fit

Financial Payback

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Strategic fit:

Investments must be aligned within the companys overallbusiness strategy, which is to satisfy the needs of consumers interms of their electrical requirements

Financial Payback:

Previously HPM used a two-year payback period as a guide fordeciding whether an investment decision was financially viable

This has now changed, however, and financial decisions aremade on a more ad-hoc basis

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HPM recognises the importance of getting newproducts to market quickly and therefore pays

particular attention to new developments in the area

of rapid prototyping technology

HPM used the following to evaluate the benefits and

costs of using

1. Stereolithography rapid prototyping technique

2. A technique to produce rapid tooling

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Stereolithography is a process that has the potentialfor dramatically reducing product development lead

times and their associated costs

Using layer-building processes, they deposit only the

required material for each particular layer, gradually

building an exact replica of the part, regardless of its

complexity

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Stage I

Transfer CAD data into STL file

STL file breaks CAD file into series of triangles

Stage II

Transfer of information into another machine

The machine controls UV laser

3D figure is represented by numerous 2-D slices

Stage III

2-D images is then traced onto a vat of liquid photopolymer resin by UV laser

UV light causes the liquid resin to solidify leaving an image of particular cross-section

After solidification work area lowers allowing new resin to flow in over hardened surface

Stage IV

This process is repeated until desired shape is obtained

When finished, the table raises the part to the surface where it stands allowing any excess resin to drain

from the part

excess material are then removed and the part is placed in an oven for a final cure

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Light Switch product could suffer serious damage frominferior but inexpensive import competition

In developing the new product, HPM also wished to

test and quantify the benefits of the rapid productdevelopment approach

The decision was therefore made to carry out the

product development using three concurrent butdifferent methods, and to monitor the progress of eachmethod

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These three product development paths were

Case1 : Employing Conventional engineering

Case2 : Employing a rapid prototype model

Case3 : Employing a rapid prototype model plus

rapid tooling

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Case 1

In the case of the

conventional engineeringpath, the injection mould

tool design was then

commenced.

Case 2

Utilising the rapid prototypedevelopment technique

The design was completed on

the CAD System and the tooldesign data transferred to

machine for production of the

injection mould tool

Case 3

Utilising the rapid prototypedevelopment technique

The design was completed on theCAD System and the tool designdata transferred to machine for

production of the injection mouldtool

For the case utilising rapidtooling process combines the use

of zinc alloy wires which aremelted under a plasma arc and

blown . The metal is almost at

room temperature reaches thestereolithography model, and

thus causes no distortion to themodel

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Case 146 weeks from the time of

confirming the product designuntil the product was available

for mass production &

distribution

Packaging design, particularly

any blister packaging and droptesting, are also not normally

finalised until the product or

models are available

Case 2Minimum time from product

design to market availability

was reduced to 37 weeks. This

reduction of 9 weeksrepresents a 19.5 percent

reduction in development lead

time

Manufacturing aids and jigs,

photography, and productliterature, as well as packaging,

could commence at week five,although not critically required

until week 37

Case 3Enabled HPM to obtain

Government regulatoryApproval for the product prior

to the completion of the

production moulding tool

When compared to the

conventional engineering path,this methodology saves 19

weeks (or 41.3 percent)compared to the orthodox

process

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Introduction of change initiatives into any organisationis never easy and there are always some difficulties

that must be overcome

I. Quality Assurance: The need for a separate and

unique quality assurance process for rapid prototype

development was evident from the delays caused by

the formalities required by the companys adherence

to ISO 9002

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II. Politics of Change: The need for the companys seniorexecutives and management to support the cultural changenecessary to successfully implement rapid product developmentwas certainly one of the key issues.

III. Project Management Resources: The experiment confirmedcurrent experience of a heavy demand on managementresources when introducing rapid product developmentprojects.

In this particular case study, involving extensive use of

subcontractors, the amount of project management resourcesvirtually had to be doubled for the short period ofimplementation

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IV. Skills Acquisition: Before RPD was introduced, theCAD skills of the design group were used to

incorporate tool-making skills into the drawing office

as tool quality was believed to be the way to ensure a

quality product. A wide range of new skills have been

added to support RPD.

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SWOT Analysis

Strength

Attention toquality andstrong product

development. Innovation.

Weakness

Product LifeCycle ( From 9yr to 2 yr ).

Competitorable toreengineer

and duplicatethe product

exactly andflood marketwith cheap

product

Opportunity

Ability todifferentiateitself through

innovation andtechnology.

Strong

innovation.

Strong focuson using latest

technology.

e.g Stereo

lithography,rapid tooling.

Threat

Improvementsin technology.

Hostile

marketplace. To give

company a

Householdname.

Cheap Importfrom China.

Total

repositioningof

ManufacturingStrategy.

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Innovation Theory: Technology Development isstimulated through Science technology Push and

Market Pull

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Integrating technology push and Market pull tostimulate innovation.

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M-T Matrix : An aid to decision making when decisioncriteria have multiple level.

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