Heading the Services way

Otis Elevator a long established company that revolutionized the world by creating the first passenger elevator in the 1800s. Otis is an example of how an innovative company cannot stay in the “status quo” and needs to evolve and adapt to the rapidly changes of the economy, technology and client needs. Otis Elevator was able to transform from the manufacturing industry into the logistic and service industry, leveraging its transformation with the use of IT and information management systems.

The key issue - moving from the largest manufacturer to the service industry

• The elevator industry entered in a wave of transformation and it is clear that not only the quality of the product, responsiveness and price were key drivers for clients when selecting an elevator service company, but also the cost of service became a major consideration as building aged and competition for tenants increased. 
• Small companies dedicated solely to the elevator service increased the competition in the maintenance area. As a result, it was clear that Otis needed to change the company culture from an operation and manufacturing company to a service oriented business. 

IT initiatives taken by Otis to address the key issue
Several IT initiatives were taken by Otis in order to become a company that envisions to “maintain elevators and service customers through logistics and information management”.

IT Initiatives	Purpose	Benefits / Results
OTISLINE®	Create a centralized customer service system to dispatch service mechanics and call backs reports to do the proper follow ups	24 x 7 customer service Responded to a customer in less than a second Savings due to restructure of the company
REM	Elevator monitoring to control the overall performance of elevators	Produced reports that allow mechanics to solve problems before the elevator went out of service before customer were even aware of them
SIMBA	Standard-interface for product strategy, product development and  production	Lowered project costs throughout the value chain
IT Initiatives	Purpose		Benefits / Results
e*LogisticsTM	Integration and automatization of the supply chain in order to generate real time information flow from sales, factory and filed operations via Web		Project Proposal – Automatization of main elements: gathering account information, determining elevator configuration and proposal preparation Sales Processing - Improved lead times, reduce inventory levels and reduced costs across the value chain Order Fulfillment - Flexible and globally integrated supply chain  by managing factories, suppliers, field feedback and product improvement process Field Installation - Reduced inconsistencies, maintain lean manufacturing and low inventory levels by generation e-mail remainders  of job status

Relevance and analysis

• Otis was able to shift from a manufacturing company to a service oriented business by leveraging in the use of technology, network, Web and new computer and software’s that are product of the overall evolution of the world economy. This highlights the importance of a business to keep up with the technology development in order to obtain competitive advantages and develop key success factor within the industry.
• An additional factor that the Otis case illustrates is the importance of how IT is tight to the strategy of a company. The shift in Otis strategy and vision was product of the proper implementation of IT systems that were align with the overall strategy that the company needed to develop in order to keep up with the new market waves.
• Future challenges for Otis will relied in ability to fully integrated the e*Logistics program with the other 50 financial systems and 15 different manufacturing systems that are currently operating all around the world. In addition, it is important for Otis to fully integrated the new global orders through the e*Logistics system in order to replicate the success that were achieved in the UK market.