When the system was developed, it was intended to be a profitable venture for Applicon, but by then the electronics consumer market was saturated. The electronics consumer market was no longer growing, and growth, on the other hand, was visible in the case of the mechanical market. Most of the CAD and CAM systems were no longer affiliated to the electronics market. They were part of the mechanical market. Even with the series 4000, Applicon understood that success was not easy, as the consumers were in a competitive market setting, and Applicon could not just rely on sales to push their products. This was a consumer segment for which Applicon had to market their products. However, Applicon was working in anticipation of an increased demand but did little to create the marketing required for it.
Secondly, it was identified that the product costs of Applicon were higher. However, this did not bode well with consumers. Consumers were more price conscious at this time. These consumers were very price conscious. The case scenario calls them price sensitive.
A third important characteristic as noticed from these consumers was how they were moving with changes in technology. Technology is never stagnant and the consumer moves with the newer developments creating a very dynamic market. However, Applicon was unable to cater to the needs of this dynamic market.
Finally, the consumer during the growth age of the mechanical market was a sophisticated one. This consumer was more informed of the hardware and software processes in the industry. They were well informed of what to expect at what price rage. Price to performance ratios was an important stakeout for them. They wanted express delivery responsiveness but were not willing to compromise anything in price and quality as well.
Length of Lead Time
The lead time is considered as the latency time that happens between the acceptance or initiation of an order and the execution of the process. This is the time from order placement to completion if one was to discuss it in terms of the retail sector where it is used. In any industry, as with the case of Applicon, the lead time reduction is very important. In manufacturing context, as with Applicon, the lead time is defined more conventionally. It is the time from which the customer places the order or when Applicon understands there is a requirement initiated from the consumer end. Once this requirement is understood, then the order batch process would start. When calculating lead time for Applicon, a master production schedule would need to be prepared along with the bill of materials. This is specifically needed to ensure that the output lead time is calculated satisfactorily. In the case of the Applicon, it is necessary to list a bill of material at this stage. A bill of materials of the end products are to be created and the time period for the delivery of each of the bill of material is assessed. The time period will be considered based on raw material requisition for supply of dates as feasible for the company. The time period will generally give the lead time for each of the product that is identified in the supply chain. Now once this lead time is identified, the next step will be to determine the specific dates in which the quantities would be produced. Now this is observed to be the time with enough buffers given for accommodation of weekends or holidays. Administrative lead time is calculated along with inter operations lead time and the total lead time.