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