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

Source: utc.com

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

UTC Dividend Payouts

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.