UTC Case study

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Rutgers University, Newark *

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Business

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Feb 20, 2024

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United Technologies Corporation: Supplier Development Initiative Business Situation – UTC focused developing connections with important suppliers while looking for cost-effective and efficient supply chain partners. Long-term commitment, confidential information exchange, continual development, and risk-reward sharing were all attributes they admired. While UTC P&W and DGT initially shared long-term goals, disagreements occurred about the partnership's future vision. DGT misinterpreted UTC's preference for shorter-term goals, perhaps leading to misalignment. Analysis and Insights – Carrier Corporation, Otis Elevator, P&W, and Flight System were the four key businesses from which UTC generated $24.1 billion in global revenue. Because of the new internet increase, data storage, and email communications, consumers/retailers could readily obtain information on availability and competitive items, they primarily concentrated on cost management. This prompted UTC to develop their own sourcing strategy, resulting in evaluating suppliers with two dimensions. P&W had assisted Gunver on numerous occasions when company was facing financial difficulties in 1994-1995 and was poised to file for creditor protection. Later, DGT stated that working with P&W was tough due to immediate cost reductions and a focus on the short term. Recommendations – UTC should encourage diversity into suppliers to mitigate risk associated with resilience on few key suppliers. This would help in the supply chain to be better. They should also create a thorough risk management strategy that includes contingency plans for crucial components as well as alternate sourcing options in the event of unforeseen disruptions. Also, while cost reduction is critical, consider a balanced strategy that prioritizes value and quality. Encourage suppliers to discover creative methods to cut prices without sacrificing quality. For better understanding what the supplier wants, UTC should create platforms for

the same to share ideas and practices. On the other hand, UTC should implement a performance measuring system with KPIs to evaluate and recognize supplier performance.

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