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Pratt & Whitney president describes firm's evolution

The key to success is to enjoy your work, Louis Ch��nevert, president of Pratt & Whitney, recently told students in the Leaders For Manufacturing (LFM) program.

"Choose what you like to do. If you're able to have fun at your job, you'll be successful," said Mr. Ch��nevert, a Canadian who has led the Pratt & Whitney aircraft engine design and manufacturing company since 1999.

On September 11, he presented the keynote presentation of LFM's fall "Midstream Review," the week when second-year graduate students return to campus at the midway point of their six-and-a-half-month corporate internships.

Ch��nevert emphasized the critical need for companies to reinvent themselves in order to meet new challenges. The 14-year veteran of Pratt & Whitney illustrated his points by describing his organization's evolution from a traditional aerospace company to a leaner, more efficient business.

The early 1990s saw a sharp drop in aircraft orders and created turbulence in the aerospace industry. "A staggering 117,000 workers were laid off in this sector in 1992, and Pratt & Whitney's own profitability evaporated," said Mr. Ch��nevert. The company realized that fundamental change was crucial to its survival, but the cyclical nature of the business, plus very long lead times and low volume made the transition especially difficult, he said.

In the first stages of its transformation, Pratt & Whitney focused on process. "By 1994, we had adopted 'Kaizen,'" he said, "an Eastern continual-improvement philosophy utilized by many Japanese corporations that emphasizes finding the root cause to take corrective action, examining all details, no matter how small, and recognizing that there is no such thing as a random event."

In 1995, Dr. James Womack, President of the Lean Enterprises Institute at the National Association of Manufacturers, was brought in to continue the restructuring drive. He instilled the seven principles of "Achieving Competitive Excellence" (ACE), a structured approach that helped Pratt & Whitney make significant strides toward leanness.

"We consolidated the process for procuring one simple bolt that was coming from four different suppliers and costing us from 80 cents to $17.50 per bolt. This consolidation saved $17 million," Mr. Ch��nevert said.

Another change: in 1997, the company installed Andon lights (display boards) on manufacturing floors to increase the visibility of production. The result: lead time for building engines was reduced by 50 percent.

By 1999, module centers were established by category, eliminating wasteful expenditures -- the new centers reduced the number of suppliers from 600 to 280 -- and cutting manufacturing costs early in the design phase.

Pratt & Whitney, headquartered in Hartford, CT, is a division of United Technology Corporation, a partner of the LFM Program.

A version of this article appeared in MIT Tech Talk on September 27, 2000.

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