Itt Supply Chain Evaluating Itt Industries\' Supply

ITT Supply Chain

Evaluating ITT Industries' Supply Chain

ITT Industries (NYSE:ITT) generated $2.1B in revenues during their latest full calendar year of results with a Net Income of -$130M. For the latest calendar quarter ending September 30, 2012 the company generated $555M in revenues and earned a Net Income of $73M. This transition in financial performance is attributable to several factors incouding better coordination, collaboration and integration of suppliers into their manufacturing operations, more efficient use of existing manufacturing assets, and greater use of analytics and IT systems to streamline complex processes (ITT Investor Relations, 2012).

ITT's diversified operations include engineer-to-order, configure-to-order and build-to-order production strategies that have a multiplicative effect on the complexity and extent of collaboration with suppliers (Boon-itt, Himangshu, 2006). Using these product customization strategies the company competes successfully in energy, infrastructure, electronics, aerospace and transaction. Supply chain locations and their corresponding operations are tightly integrated across the four divisions of Control Technologies, Interconnect Solutions (ICS), Industrial Process and Motion Technologies (ITT Investor Relations, 2012). Despite the wide variation in their business models, the manufacturing processes for the aerospace, electronics, energy and mining, industrial markets, mining and transportation are all orchestrated through a common demand management platform. The ITT demand management platform is predicated on the Demand Driven Supply Network (DDSN) that continues to be instrumental in the transformational of complex manufacturing enterprises (Barrett, 2007). A core aspect of the DDSN model is the optimal use of supply chain locations and their use for minimizing production delays while optimizing quality levels of delivered products.

As the ITT global supply chain has matured over the last two decades, the company has progressed from a centralized approach to supply chain management including reliance on a single distributed order management p-process to having a more distributed supply chain network (ITT Investor Relations, 2012). This progression began eleven years ago when the company chose to increase the accuracy and speed of response to supply chain conditions and market opportunities. In 2011 the company chose to adopt a policy of implementing supply chain improvements within 90 days and actively charting their overall contribution to company performance (Minett, 2001). From this starting point ITT also began to measure the effects of logistics through the Hierarchy of Supply Chain Metrics as defined by AMR Research (now Gartner)