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United Technologies Corporation (UTC)
By: Bradley Caudill, Kristi Meier, Brianna Smith, Danielle Topper, David Welsh
Company Summary
Multi-national conglomerate
Produces jet engines, elevators, air conditioners, aerospace products (before & after market)
196,200 employees
Industry: Aerospace/Defense Products & Services
Sector: Industrial Goods
Source: Yahoo Finance
Case Problem
Quality problems with elevators
Otis elevators required on average 40 mechanic visits per year
Main competitors required only .5 visits (Mitsubishi)
Impact on Firm
Opportunity cost of time wasted on making defective products
Reputation hurt in respective market
Attempt to Improve Quality
CEO George David implements project ACE (Achieve Competitive Excellence)
Japanese quality consultant Yuzuru Ito hired to investigate internal issues
ACE Conclusions
Quality:
Poor design led to malfunctioning products
Damaged employee productivity b/c time wasted on creating defective product
ACE Solutions
Designing elevators that were easier to manufacture
Greater employee access to elevator parts
Saved company $27 million in one year
Production process streamlined
ACE “Pilot” program
Cut further quality problems
Summary
United Technologies struggled with quality building block allowing competitors to have one up on them
Inefficient design and poor employee productivity contributed towards quality incompetencies
ACE Program administered by Yuzuru Ito identified these issues and suggested ideas to counter them
Price of stock increased exponentially when changes were implemented
Major changes included redesigning of elevators and employee empowerment
Piot program
Works Cited
Hill, Charles and Gareth Jones. Strategic Management An Integrated Approach. Mason: South Western, 2013. Print.
Honeywell. N.p., n.d. Web. 12 Sept 2015"Honeywell International Inc. (HON) | PV of FCFF." Stock Analysis on Net. N.p.,
n.d. Web. 14 Sept. 2015.United Technologies. N.p., n.d. Web. 12 Sept 2015."United Technologies Corp. (UTX) | Return on Capital." Stock Analysis on Net.
N.p., n.d. Web. 14 Sept. 2015.