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Otis Elevator Case Essay

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Otis Elevator was founded by Elisha Graves Otis, the inventor of the safety-brake elevator, in 1853. The main business of Otis was to design, manufacture, install and provide service for elevators and relevant products such as moving walkways and escalators.

The market was very competitive in the elevator industry, and Otis investigated that customer cancelled maintenance agreements due to dissatisfaction for service quality rather than product quality. In order to increase its market share and become the well-known leader in service excellence among all companies worldwide, the goal of Otis was to differentiate itself from other companies through logistics and service.

Otis’s objectives were 1. To improve innovation, quality, cost and speed during the continuous transformation process and; 2. To move Otis core business from product and service management to customer solution management, and in the end to logistics and information management. Using a single finance and manufacturing system enabled Otis to add value to its entire supply chain. Below, two main transformation waves shown the progress of changes from the manufacturing company toward a total solution company to customers by Otis.

Firstly, Otis introduced OTISLINE and REM, which facilitated the company to increase the efficiency of customer service and customer satisfaction. OTISLINE was a 24 hour customer service center, which produced excess callback reports to improve product reliability and allowed customer to experience an immediate response from Otis. REM was a control system that provided log performance statistics of the elevator directly into a distant computer, and the company could adjust and maximize the elevator performance.

The second wave of the transformation was to increase the coordinated effort between operations, such as engineering, supply chain and sales and field operation. Sales and Installation Process (SIP), an improvement automated program, was introduced to standardize the processes across the organization. A major IT program, e*Logistic, was also initiated to enable and facilitate the re-engineering process. SIP and e*Logistic programs used OTISLINE and REM as support tools to provide a digitized platform, which allowed the information on key processes, such as project proposal, sales processing, order fulfillment, field installation and closing activities, to be recorded and shared timely within the organizations electronically. The cycle time would be reduced by five times and the quality products and services would delivered to the customers consistently.

By 2004, Otis had more than 1.5 million elevators and 100,000 escalators operating worldwide. Every year, the Otis global network processed more than 60,000 orders, and the products sold in more than 200 countries. However the transformation has not ended yet, moving from manufacturing to logistic and service company is a continuous investment. The remaining challenges for the e*Logistic program are – delivering the e*Logistics to desktop globally and personnel challenges.

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