ITT Automotive

Environment: 1) Intensifying price competition – moved from a high-priced option on luxury models to std. equipment, leading to larger demand at low cost; 2) Shorter product development lead times – shorter window for component manufactures, ITT gets 2 years to develop MK20; 3) Technological obsolescence (shorter product life cycles) – needs rapid production ramp-up; 4) Shorter margins – 5% (1987) to 1.5% (1991)

Case Worksheet (ITT Automotive: Global Manufacturing Strategy – 1994)
(Manufacturing) Strategy – Standardized, automated production using principles of simultaneous engineering, DFM, modular design
Core Technology (Manufacturing): Automated manufacturing, mass production, assembly of modular design, enabling higher-volume, lower cost, smaller, lighter, cheaper components.
Extent and type of Dependence: Reciprocal independence (simultaneous engineering, modular design) Type of Coordination Required: Team work, fluid work design, mutual adjustment
Design Implications:
Design Element

Initial: Manual Assembly

Later: Automated System

Structure: Span of Control

Small (need to closely supervised) Moderate (modular design, need for closer supervision)

Structure: Hierarchical Levels

Moderate-high (small span of control)

Low (smaller number of people needed,
Moderate span)

Structure: Formalization

Low

High (due to automation)

Structure: Specialization

High (narrow skills)

High (wider skill, process engineering/maintenance) Structure: Centralization

Low (people can improvise) Moderate-High centralization

Structure: OVERALL

Mostly organic

Mostly mechanistic

HR: Interaction

High interaction

High interaction between departments
(simultaneous engineering)

HR: Training and Expertise

Narrow

Broad, cognitive

HR: Direct/Indirect Labor Ratio

High

Low (large number of indirect staff)

Type of Departmental Technology:
Variety: Low
Craft

Routine
Sales

Quality