Industryweek 1441 10465trane

Tying IT Assets To Process Success

Aug. 18, 2005
Trane's model reveals less inventory, lower response time, space reductions.

At American Standard's Trane operations, treating IT as an investment strategy began a decade ago with the goal of demand-driven enterprise optimization.

Trane's CIO, Wally Yosafat, says tracking the ROI has confirmed the strategy. (Interestingly, Stamford, Conn.-based Gartner Inc. reports that only 13% of its clients audit IT ROI.)

Trane's latest audit results revealed:

  • Inventory turns that increased between 15 and 30 plus.
  • Finished-goods inventory reductions as high as 30%.
  • Work-in-process reductions between 70% to 90% and cycle times so fast that many Trane plants don't even get involved in measurements.
  • Space reductions between 25% and 35% for raw materials and finished goods inventory.
  • Between 50% to 90% reductions in working capital.
  • Product response times that have been known to drop by half.
"We no longer think of each plant as an [IT] island," says Pam Greve, CIO for Trane Commercial Systems Global Manufacturing. She's shown here inspecting products with a co-worker.At the beginning of Trane's process optimization initiative, the broadest palette of operating advantages seemed to be compartmentalized as inventory control, notes St. Paul-based Pam Greve, CIO for Trane Global Manufacturing. "But the more we learned about our evolving strategy of being demand driven, the more we conclude that we were going to be able to become more customer-responsive throughout our business model," adds Greve. "We can now speed many more customer options into the marketplace and serve our customers better."

Coincidentally, during that 10-year IT investment period, software partner Cincom Systems Inc., Cincinnati, has helped Trane evolve a competitive global business model. Yosafat says Trane's IT investment strategy became a key element in the company's global success.

As an example, he cites Trane's new plant in China. "Our victory with that plant is its adoption of a globally proven IT system," says Yosafat.

"We no longer think of each plant as an [IT] island," adds Greve. "We think of our demand chain and our supply chain as Trane Commercial Systems globally. Doing that involves having consistency in process, product data and in the systems that support that process and data."

Greve says Trane's IT strategy is not a technology program that merely focuses on implementing the next version of Cincom's enterprise solutions. "Instead, it becomes a business program in implementing the next version of our Trane manufacturing model -- supported by Cincom's technologies."

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