Otis Elevator

Otis Case Analysis, 05/16/2012

Business Context/Key Business Drivers

1. Otis Elevator, at the time of this case, was the largest manufacturer, installer and servicer of elevators, escalators and moving walkways in the world. In 2003, revenues totaled $7.9 billion with a profit margin of 17.4%. The company had a very strong position in the market, both in manufacturing and installation, and in servicing existing accounts, especially internationally, where most of the growth was coming from.

2. The key Business Driver for this initiative was to become a recognized leader in service excellence among all companies. The company wanted to embrace its culture of service and to develop the processes needed to deliver world-class service. Therefore, the focus was to reorganize the supply management and manufacturing functions into a single supply chain and logistics management function.

Initiative Objectives/Benefits

1. Key business objectives were to: integrate all functions into a single customer-centric business model and to be run with a customer-focused mind, achieve fivefold improvement in reducing cycle time in the new equipment business cycle. These objectives were to be achieved by establishing the IT system e* Logistics to facilitate and enable the business process re-engineering.

2. Benefits expected were: more affective business processes with improvements in innovation, quality, cost and speed; sharing and access of information between departments and supervisors in each business process; improvements in manufacturing flows and management of inventory levels; higher conversion of new equipment to maintenance contracts; and with the orders being linked to the financial systems, it would improve accurate billing of change orders and collection times.

Initiative challenges

1. Key Challenges:

* Scaling the system so the field-installations supervisors could use it.

* Substantial technology and process...