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Otis Elevator: Accelerating Business transformation with IT
Fatima IftikharAshar KhanAsma Tufail
Introduction to case• OTIS elevators invested heavily upon IT to capture
analyze, and disseminate data • Earlier, their systems provided escalator, elevator and
walkway services which evolved with increase in no. of customers
• In 1853, the company started with the invention of “safety brake elevator”
• OTIS operates worldwide, with headquarter in the U.S• Vision- “To become the recognized leader in service
excellence among all companies – not just elevator companies – worldwide.”
Company Background• The company was named after its founder “Elisha
Graves Otis” -1853• Its parent company was UTC united technologies. • Mr bousbib became the vice president of OTIS- 2002• Revenues climbed up from $ 6 billion to $ 8 billion- from
2000- 2003• Otis had 1.5 million elevators and 100,000 escalators
operating throughout the world. They sold products to more than 200 countries.- 2004
Early Application of IT • Otisline-customer service center - could respond to customers immediately - improved quality of service - speeding communication
• REM-elevator monitoring - microprocessor-based elevator - operate at maximum performance
Stages in next transformation wave
• Engineering -regionally driven product strategy to a global one -SIMBA-2001 -reduced the inventory from 72 motors to 10• Supply chain -streamlined manufacturing operations from 52-26 factories -reorganization of supply management function into new single
global supply chain• Sales and field operator -SIP(Sales and installation process) -helped define customer needs and bring sales and field
installation teams together for proposal discussion
E*logistics• Critical enabler of info transformation• It provided IT systems to facilitate business process
re-engineering that was taking place throughout the company.
• Project team was made up of experts in areas of sales, field and order management along with IT project managers.
• Di Francesco --Project Director• e*logistics as a means of connecting• sales- factory -field operations through the Web.• According to him
“ everyone in the company would come in contact with the e*logistics program, since it so thoroughly spanned the value chain. That’s the key thing that gets
me and the team up everyday”
• Technology in the project relied on – open standards
– internet-based communication– workflow tools– back-end integration
with established enterprise system
Project proposal• Simple forms filled out
on paper • Sale supervisors and field installation supervisors required to review and approve the project as a part of prebid process.• The new process was completely electronic• E*logistic program fed the proposals information directly into Otis financial systems.
Sales processing• At first orders werea) booked, validated and
scheduled manuallyThe elogistic program
a) Automated the work flow
b) Reduce inventory levels
c) Eliminate wastes
• E logistic made the changes easy to record and visible to the entire supply chain.
Contract logistic centers.(CLC)
• CLC did no manufacturing they manage the supply chain including otis factories, suppliers, field feed back and product improvement process
• At first CLC only placed orders with
the single Sub system integrators SSI
• CLC eventually could order multiple SSIs wherever they could find lowest cost for required quality and delivery times• Network technologies like intranet and internet made it easy for CLC to see all orders across the supply chain.
Order fulfillment
• Historically had been no automated global standardized project management tools for field installation.
• Site condition were impossible to control
• They were now prompted to check site progress by work flows and could communicate job status by emails
Field installation
Closing activities
• with elogistics• workflow was triggered prompting a series
of customers contacts and billing• this was expected to result in more
accurate billing of change orders, higher conversion of new equipment to maintenance contracts, and faster collections
Problem 1 Challenges of e*logistics
Problem 2 To deliver world-class service.
Problem 3 Dominance and profitability
Problems
Delivery of e*logistics program
Internet problem
Personal challenge
s
To deliver world-class
service.
Improve their current model
Incorporating analytics to ERP and
CRM
data in a quantitative
mannerprovide reliable, cost
effective logistical and service support to
customers world-wide.
?
Dominance and
profitability
explore different
avenues of growth
Service sector is
ideal
profitable, economies of
scale and scope, demand is steady.
?integrating an analytical
component to their current ERP
systems
differentiate themselves
from the competition.
quantitative data to assist in
statistical analysis and DM
highly reliable and high
success rate
Conclusion
Otis
E*logistics ACA SIP
ERP CRM
Project proposals
Sales processing
Order Fulfillment
Filed Installation
Closing Activities
Analysis…..?????
1. Upper Level management must support these activities
2. Single analytics initiative must be in place (integrating its E*Logistics, SIP, and ACA)
3. System must be enterprise wide and the firm’s focus must be directly on utilizing analytics in all aspects of the business
4. Analytical culture must be present and they should hire individual who knows how to use of statistical and quantitative analysis
5. An iterative cycle of establishing metrics and monitoring performance must be implemented