The management of AlliedSignal Aerospace has realized the urgent need to lower the deteriorating TAT and thus assigned Jacques Esculier, a manager with both strong technological and managerial backgrounds, with the task to improve the TAT performance. Both the internal and external environments have an effect on AlliedSignal's operations and decisions that need to be made.
There is intense competition among existing companies and new entrants in the industry, especially in the Asia Pacific region. The firms are all competing for competitive advantage on the basis of their TAT and the quality of service that they offer. Aftermarket sales are increasing at more than double the industry average thus making the aftermarket an area of major growth. Since aircraft tends to have a long product life, this market would provide an excellent source of revenue stream. With growing competition, the industry would reject those suppliers that are inefficient thus influencing competitors to offer their customers the best value.
Additionally, there is a trend in the industry for airlines to reduce their operating expenses and seek out those suppliers with more complete service/product offerings. The external environment places pressure on AlliedSignal to ensure that it is operating efficiently.
Allied Signal's Internal Environment
There are several negative facets of the shop's internal environment, which are impeding the proposed change plan of lowering the TAT. Primarily, both the managers and employees do not have a focus on saving time during the various stages of production. In addition, there are also no penalties for failing to comply with deadlines. The various operations stages are not well organized, leading to a lot of wasted time between stages. In addition, employee morale in the company is low. Employees do not believe that their participation will make any difference. There also appear to...