IT Easterline Case

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At the strategic level, Bob Cremin narrowed the company’s focus from 10 markets to two, commercial aerospace and defense. Under this strategy Esterline exited from its non-core businesses and re-invested through new acquisitions that would strength its targeted market-product position. This strategy choice was supported by the tactical deployment of an organization-wide lean manufacturing policy. The lean policy specifically enhanced Esterline’s performance through employee empowerment through training programs and diffusion of authority and ownership downwards from the top e.g. employees working at different locations were free to choose the lean manufacturing tool set that worked for them. Secondly, the lean policy charged each business with setting two additional annual goals that were specific to them in addition to the corporations three: profitable growth, return on investment and aggressive lean implementation. Employees at business units that achieved their annual goal would be rewarded. Finally, the move from batch-and-queue scheduling to simplified flow – a manifestation of lean manufacturing – reduced inventory costs, waste and increased throughput. 2. What is the central question being addressed in this case? Why is it important to Bob Cremin? What issues are raised in this debate? The central question in this case is whether IT systems are relevant in organizations practicing lean manufacturing. and if IT systems are relevant, what is their role in lean manufacturing? Skeptics argue that most of the advantages of ERP systems can be achieved through process simplification and lean production methods, without relying on these complex computer systems. From the case, Bob Cremin comes out as being not enthusiastic about IT. According to Bob, IT systems are complex, over relied upon by people and they mostly interfere with overall process innovation. The CEO’s reasoning is supported by Frank Houston’s Figure C which demonstrates the conflicts between lean concepts and enterprise IT. However, in as much as lean techniques enhance customer service and streamline productivity, they still lack the predictive capabilities of ERPs and the capability to produce all these data at a single place of reference. Bob acknowledges that incremental changes are vital for innovation and continued improvement (Nolan, Brown, and Kumar 2) yet he does not wish to offer IT the opportunity to change. He seems to be focused more on the failures of IT systems and forgets its successes such as Cerebellum’s successful results in combination with lean policy with regards to Cell#1 at Esterline’s Korry plant. Finding an answer to this question could also be important to Bob because some of the staff at Esterline saw enterprise systems as being essential to successful performance whereas others believed that these systems interfered with removing waste and simplify the manufacturing process (Nolan, Brown, and Kumar 1). This is a dilemma that only he as the CEO can resolve. 3. 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? ERP systems are designed to standardize information entry and create central data repositories for