Esterline Case Study

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Executive Summary Team 4 has just completed an analysis of Esterline’s business operations. Our findings are detailed on the following pages. In summary, we have determined that Esterline is in an excellent position to reap the benefits of the investment in Lean Production training and resources throughout the balance of the corporation. Prior to 2000, Esterline had limited results in implementing lean. However, after the management team drove the ownership and authority down to the operator level and provided the necessary tools the enterprise became highly successful. This downward ownership emphasis is key to why Esterline has been highly successful during the last four years. First is the fact that income is up from 36.6 M in 2001 to 58 M in 2005. The fact that the on-time delivery for Korry has gone from an average of 38% in the third Quarter of 2004 to 100% in the fourth quarter of 2005 is truly remarkable. We have highlighted three primary concerns going forward at Esterline’s Electronics Division, the Korry Division. The first is whether Korry can implement Lean methods in the office areas. Based on the results of Annette O’Neal’s customer service team, we believe it is not only possible, but the team has proven it works. Office lean has allowed her team to reduce the time to process orders from three days to four hours, offering same day service to customers. This latest work by Annette’s team is proof that office lean works. Furthermore, Esterline should utilize the employees responsible for this success by having them train others throughout the company on the tools they used and showcase the results they gained. The second hurdle that the management team is struggling with is the question of whether or not the plants need an MRP package for operating the facility. We believe that Esterline should move forward with a flexible MRP package:

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