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Anubhab Chakma Milestone One Description of the Organization: The United Aircraft Corporation was an American aircraft manufacturer formed in 1934 at...

1.   How did poor quality at United Technologies' Otis unit damage the company's financial performance and competitive position?

2.   Why do you think quality was so poor at Otis?

3.   What did UTC learn by repairing the quality problems at Otis?

5. How did it leverage this learning to improve the performance of the entire corporation?

6.   What general principles about competitive advantage and strategy can be drawn from this case?

Anubhab Chakma Milestone One Description of the Organization: The United Aircraft Corporation was an American aircraft manufacturer formed in 1934 at the break-up of United Aircraft and Transport Corporation. In 1975, the company became the United Technologies Corporation. They have been seen as a valued member of the technology sector. With its main focus being on the Aerospace industry, they develop anything from helicopters to various industrial products. Due to the fact that they cater to such a large and diverse field, they operate through six different entities: Otis, Carrier, UTC Fire & Security, Pratt & Whitney, Hamilton Sundstrand and Sikorsky. They are also the world leader in producing high-speed escalators and elevators. In addition to serving the general public, United Technologies Corporation is involved with manufacturing weapons and aircrafts/helicopters for military use. They struck success landing an $18.4 billion dollar deal with Goodrich, but in June 2012 they were charged with illegally selling weapons to China and were fined $75 million. United Technologies Corp. is the leading manufacturer of multiple products in various industries and their products have always been considered to be top of the line. We are very dependent on United Technologies Corporation, as they are continually developing innovative mechanisms that serve the public and military.
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Anubhab Chakma About the case Productivity improvement at United Technologies Corporation In 2007, George David, the long-time CEO of United Technologies Corporation (UTC), retired. He could look back upon a very impressive 15 years at the helm of a company, during which time revenues tripled while net profits went up tenfold. Today, UTC is a $60 billion per annum diversified manufacturing enterprise whose businesses include jet-engine maker Pratt & Whitney, air conditioning business Carrier, and Otis Elevators. A major source of the profit surge over the last 15 years has been productivity improvements. At the heart of these improvements is a program known as Achieve Competitive Excellence (ACE). This program was the result of collaboration between George David and a Japanese quality consultant, Yuzuru Ito, who at one time was a quality expert at Matsushita, the Japanese consumer electronics giant. David recruited Ito in order to figure out why Otis' elevators performed so poorly compared to those from rival Mitsubishi. Otis products required a building owner to call a mechanic an average of 40 times per year, while Mitsubishi's elevators required service only 0.5 times a year. What Ito uncovered was a range of problems including poor design, poor manufacturing practices, and a lack of quality control inside Otis' factories. Ito explained to David how poor quality damaged employee productivity, because time was wasted building defective products. Poor quality also hurt demand because customers were less likely to buy products from a company with a poor reputation for quality. The solution to these problems at Otis included: designing elevators so that they were easier to manufacture, which led to fewer errors in the assembly process; reconfiguring the manufacturing
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1) How did poor quality at United Technologies' Otis unit damage the company's
financial performance and competitive position?
Answer
This case study describes UTC’s ACE operating system, both...

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