Lean Enterprise

Group 2
ESTERLINE
Success of Esterline
From Exhibit 1 2005:
Tier 1 Supplier
Revenue: 
• $413.2M (2001) to $835.4M Customers:
(2005)   1. Boeing
2. Airbus
• 100% Increase
Operating Income:  Two largest players in airlines
• $42.9M (2002) to $82.3M
(2005)  
• 91% Increase
factors WHICH contributed to Esterline’s
performance
• Changes in Product Line
o Removed non-core business functions
o Reducing industry mix (10 to 2)
• 30 New Acquisitions
• Annual Goal set by business units which were decentralized
o Profitable Growth
o ROI
o Lean Implementations
Significant Challenges & Solutions
Imparting ownership to the labours at operational levels

This can be overcome by training the employees and make them realize the
implications of the error in downstream of the process 

Integrating existing IT system to be in line with Lean Initiatives which can be

seen in Figure C

Use ERP in helping in micro-management and decision-making process

Better to use IT as a tool to implement new initiatives
outdated MRP system
Would you just let it die: No
• We can derive some good use from the system 
• The system could be adopted with operational efficiency as the key component

Selection criteria if to replace:

• Simple and easy to operate for the floor level employees
• Able to provide suggestions to cut costs and save resources (Time, raw material)
• Able to incorporate the data from existing MRP system to understand existing
problems

Decision:
Gary should choose the correct IT system to solve the problem and train the staffs in
how to use it as a tool to improve process efficiencies and to implement lean ideas
THANK YOU