Esterline Technologies: Lean Manufacturing

“. . . if a pilot touches it, looks at it, talks to it, or reacts to it chances are it’s made by Esterline.”

Group member :Aisha khanum, Danielle Aymone

Christopher,Fabian Prevolnik,Long ,Saadman
Agenda

● Case summary
● Focusing Question
● Theoretical framework
● Analysis
● Reflection
Case Summary
● Esterline Technologies: founded in 1906 in Indiana by John Esterline,
headquarter in Bellevue, Washington.
● Industry: principally aerospace and defense markets (approximately 70%of
their revenues),
● Lean manufacturing strategy: remove waste and simplify processes
● From a multi-industry conglomerate, narrowed to key industries and
technologies
● Dilemma about the implementation or not of an enterprise IT system to
support the lean manufacturing processes
Focus of the case study - questions

● Inquest about Success Rate

● Discusses the ERP role and whether it conflicts or adjusts accordingly

● Discourses more about “why a company should change “ to a new system ,

what is the criteria and system identification for implementation .
Theoretical framework
Analysis Q1 - Evidence of Esterline’s success:
Impressive growth: Revenue & Profit
Analysis Q1 - Evidence of Esterline’s success:
Impressive growth:

● Scale up immensely: within USA and international.

● 34 business units and 7500 employees.
● 30 new acquisition.

Achieve Tier-1 supplier status with Boeing and Airbus

Analysis Q1 - Evidence of Esterline’s success:
Performance improved greatly across multiple indicators
Analysis Q1 - Factors contributing to success:

Business focus, vision of CEO Bob Cremin.

Adoption of lean manufacturing and lean principles.

Showcase adaptive (flexible) nature.

Consistent stance on information system.

analysis Q2) What is the role of an ERP system in a “traditionally run” manufacturing plant? Does it
present conflicts for lean manufacturing? Why or why not?

● IT system is a supporting tool, not a tool to control or limit lean manufacturing (Nolan, Brown &
Kumar, 2006).
● Information flow
● Adds value in just-in-time approach and waste reduction
● Adds competency
● Accuracy,transparency and improves administration
● Knowing that the aim of Esterline lean efforts is to simplify the product flow and the level-loading work
across process element (Nolan, Brown & Kumar, 2006), and that the role of the ERP system in
business beside the integration of functional applications and organizational information, is to better
position the organization to change its business processes (Motiwalla & Thompson, 2013), we can
say that an ERP system does not present conflicts for lean manufacturing when it is well
implemented.
Analysis Q3 - Replacing the outdated MRP-system?

● Implementation of an ERP-system
● Essential for accommodating demands of their major customers
○ Coordination management
○ Improve customer service
● Facilitates implementation of lean production techniques
○ Information sharing & real time information
○ Inventory levels, cash flow etc.
Analysis Q3 - Selection criteria
● The system should be simple - user friendly
● Vendor selection
○ Supply chain partners using the same vendor
○ Vendor’s implementation philosophy, infrastructure and upgrade strategies
● Forecast demand
● Adjustable and scalable (constantly changing)
● Compatible with lean manufacturing
● Information should be easy to access
● Communication with suppliers & customers
● Incorporate benefits from the MRP-system
Reflection
thanks+References

Hobbs, D. P. (2003). Lean manufacturing implementation: a complete execution manual for any size manufacturer. J. Ross Publishing.