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Esterline Technologies Case Analysis

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BACKGROUND OF ESTERLINE:
Esterline Technologies, formed in 1976, is a Bellevue, Washington based-company focused on developing and manufacturing highly engineered custom components for aerospace and defense markets. It expanded decentralized facilities for engineering, production, marketing and sales, to 11 states and five foreign countries, with 34 business units and 7,500 employees.
By 1995, Esterline was a multi-industry conglomerate with revenues of #350 million. However in 1999 when the new C.E.O., Bob Cremin, took over, he narrowed the company’s focus to key industries and technologies originally shrinking revenues to $155 million. This reduced the company mix from 10 markets to 2: commercial aerospace and defense. Esterline in …show more content…

It was considered to be overly structured and complicated, especially in the opinion of the CEO. He felt that lean management system enabled people’s involvement in the designing and improvement of processes more than that within the IT system. With the failure of initial IT implementation, CEO was of the opinion that “one size fits all” is not a feasible approach in Lean and IT amalgamation. Due to this, there were discrepancies of opinions among the executives as some believed IT systems could prove to be beneficial in the long run. Mr. Cremin believed that Lean manufacturing pushes the decisions down to people directly engaged in producing products. Incremented changes are key to innovation and continued improvement and an overly structured and complex IT system could interfere with the process innovation.

In general, ERP systems are designed to standardize information entry and create data storage for information sharing across the organization. There are numerous advantages of ERP but skeptics argued on the fact that these advantages can be also achieved by simplification and lean production methods. IT systems could be effective and reliable in the long run but at the same time there is an uncertainty about whether it will align with the concerned business process. For instance, the ERP system implemented at the Korey plant to replace MRP system failed. Though it met the requirements of individual unit and enabled employees with wide range of

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