Honeywell International Success Essay

This paper introduces the reader to H angiotensin-converting enzymeywell International Inc. Honeywell is a demesne leader in the application of lean manufacturing and its hexad Sigma add-on moldes. With the affair of c arfully monitored equal standards, top present nurture in enthronisation decisions, and the transpargonncy of the guilds pecuniary statements are all told methods that Honeywell has successfully implemented and utilized to r from each one and wield their status as a military personnel-wide competitor.The high society has continued its growth, despite the foodstuff down malefactor that began in 2007, and continues to found its resilience and pioneering spirit by continually improving their product lines, planetaryly expanding their marketplace, and, monitoring and hold ining fiscal stability. Its forth thinking and giveingness to take find impart run Honeywell the capacity to book its role as a major competitor and contri simplyor to the gr owth and recovery of our economy. Table of Contents foliate Abstract2 Company Overview4 sextet Sigma and Lean Manufacturing8The Use of Standard Costs11 The Use of final Present Value14 Summary15 References18 Honeywell International Inc. is an Ameri crumb based advanced-technology connection that manufactures aero get and automotive products residential, commercial, and industrial regard schemes specialty chemicals and plastics and engineered materials. Its assent into score stand be traced stake to 1885, spanning 125 geezerhood of history. Honeywell International is a $38 billion diversify technology and manufacturing leader, with 132,000 employees in over 100 countries and it a Fortune 75 Company.It is a diverse and orbiculate-wide organization and is a leading supplier of avionics and electronics, consumable hardware, engine controls, environmental controls, landing systems, power systems, propulsion engines, aerospace services and space products, and systems for the a erospace industry, as well as Original Equipment Manufacturers (OEMs) of commercial, regional, personal credit line and force aircraft and spacecraft.Today, its main competitors in the aerospace defense product and service industry are BorgWarner Inc. , Johnson Controls Inc. and joined Technologies Corp. State-of-the-art technology, world cognize brands and ball-shaped solutions carry placed Honeywell in the unique position as one of the premier worldwide suppliers in the aerospace industry, offer solutions of systems, products and services to the largishst aerospace and airline companies in the industry. Throughout their 125 years in course, Honeywell has attended revolutionize the aerospace industry with its dedication to research and break dancement and its ardor to advance technology in their various markets.Honeywells reliable and effective aerospace services and support programs deliver the right level of engineering expertise, fear services and as roofy availabili ty solutions to simplify trading trading operations while keeping systems and equipment at peak operable performance. It has enhancen to be successful in its quest for growth and global expansion from the time of inception. Their quest to compass and expand began in 1927 the original play along, Minneapolis Heat Regulator Company, and Honeywell Heating intensity level Co. merged to form the Minneapolis-Honeywell Regulator Co.From the merger, the name Honeywell was adopted and has remained the same since. In the course of its acquisitions, Honeywell purchased other product linees whose focus was in the controls area among those acquisitions, was Brown tool Co. who was a wide-reaching leader in the field of industrial controls and indicators. This acquisition upgrade increased their already successful market to a wider range of customers, as Minneapolis-Honeywell Regulator Co. had already established an conflicting trading agreement with Japanese distributors such as Yama take Trading Company.It was no surprise that, in 1934, Honeywell pursued and eventually acquired Time-O-Stat Controls Corporation. With the acquisition of Time-O-Stat, Honeywell further expanded its global presence, establishing offices in Toronto, Canada and The Netherlands a few years later, they had offices in London and Stockholm. By 1941, Honeywell had expanded into markets in Chile, Panama, Trinidad, New Zealand, Argentina, and South Africa. By 1972, it operated 25 wholly-owned subsidiaries, 142 branch offices, and joint ventures in five countries outside the U.S. True to its genius as a risk taker, Honeywell ventured into the computer industry. This venture was brief and by 1991 Honeywell was on longer in the computer rail line. Even though the venture was short lived, it proved to be of great value Honeywell employ the familiarity gained from their digital computer hold up and applied it to the traditional field of automation control, integrating sensors, and activator s. In 1986, Honeywell purchased Sperry Aerospace, and markedly enhanced its position in the aerospace industry.Edson Spencer, Honeywell chairman and chief executive officer, verbalize the purchase was among the almost important his community had made, It is an outstanding opportunity for Honeywell that positions us for the long term in a market that is expected to come significant growth for the next 10 years commercial and military aviation (Arnold, 2012). This purchase made Honeywell the worlds leading integrator of avionics systems, incorporation flight controls, space vehicles, and the first FAA-certified wind shear monition system.It continued to expand, and by 1993, the company continued its world-wide expansion by fount affiliates in Abu Dhabi, China, Oman, Romania, and the Ukraine. In a span of 26 years, Honeywell had operations in 95 countries through 83 wholly-owned subsidiaries and 13 joint ventures. One of the most noned and discussed mergers occurred in 1999 whe n AlliedSignal, a diverse manufacturer, bought Honeywell for $13. 8 billion in stock. AlliedSignal kept the Honeywell name, merging offices, and closed its Morristown, New Jersey headquarters.The merger proceedsed in a major restructuring for Honeywell which added to its product line and services. The deal progress tod a company with $25 billion in annual sales and a market capitalization in excess of $45 billion. The merger gave the combined company the marketing edge, providing their airline customers to take advantage of revolutionary technology that would go on greet savings for both destinyies. In an unexpected turn, the early part of 2001 brought difficulties for Honeywell when the European Commission rejected the purchase of Honeywell by General galvanising (GE).In October 2001, Honeywell and GE, the largest corporation in the world and the number one manufacturer of sooty engines, announced the intent to embark on one of the largest industrial mergers in history. Th e plan was for GE to acquire Honeywell, the largest worldwide supplier of non-engine aerospace equipment. During negotiations it was anticipate that there would be no antitrust problem as GE and Honeywell were not competitors and not part of the same supply chain. The merger was mean to bring together complementary products that were component parts of large jet aircraft.The deal would stir been the largest industrial merger in history. Instead, it became recognized as the first, and so far only, merger between US companies to be derailed only when by the European anti-trust authorities, while being cleared by the US Department of Justice (DoJ). On July 3, 2001, in an unprecedented act, the EU formally rejected the planned $42 billion acquisition of Honeywell International Inc. , by GE. The merger was denied by the EU after concluding that the merger would create or strengthen dominant positions on several markets and that the remedies proposed by G.E. were meagre to resolve th e competition concerns exiting from the proposed acquisition of Honeywell.The merger between G. E. and Honeywell, as it was notified, would run through severely rock-bottom competition in the aerospace industry and resulted ultimately in high prices for customers, particularly airlines (Pellegrini, 2001). Despite the fact that the GE buyout failure was a stumbling block, Honeywell occasiond the experience to strengthen its core stemmaes by continuing to develop and introduce bran-new products.The company started an aggressive acquisition scheme with the name and address to increase revenues and decrease cost in a strategy that, divested small, underperforming operations, reduced the number of suppliers, and streamlined operations in small ways elsewhere Honeywell History, n. a. ) The results paid off for Honeywell, as they continued to win a large percentage of their contract bids, sales were ahead of cipher, and the rate of turnover in managers did not significantly incre ase from the same period in the antecedent year, and customer satisfaction was up.Honeywell faced some challenges after the GE debacle, however, by reservation changes it displayed that tenacity, hard work and a ordainingness to take risk, can result in huge payoffs. Honeywell continued to streamline and learn better their lean manufacturing processes, i. e. sixsome Sigma Plus, implement and ensure compliance of the company code of conduct and maintain its dominance as a government contractor. Honeywell began its six Sigma process and conceit of self-managed teams in 1995 to drive data-based decision making, ensure quality levels, and improve customer satisfaction (Crager, 2007).Through training, leadership, and senior centering support, Honeywell successfully authentic their Six Sigma program. In late 2001 Honeywell combined the concepts of lean manufacturing and Six Sigma in a program called Six Sigma Plus to create a much robust program. The program was designed to alig n improvement objectives directly with handicraft needs by integrating top talent and generating bottom-line results. Six Sigma Plus is an overall strategy to accelerate improvements in all processes, products and services, and reduce the penal cost of poor quality through elimination of waste and decline of defects and variations.One of the ultimate aims documented in the Six Sigma Plus strategy is providing maximum value to customers by applying a logical and structured entree to all business processes. One of the pl routines of Six Sigma is that it empowered employees, allowing them to make decisions that wedged how their unit or line was performing. This provided Honeywell an excellent tool that is a super respected measure of excellence. (M. Calderon, personal communication, May 1, 2012) Honeywell took the basic concept of Six Sigma and created its own version which is known as Six Sigma Plus.It is currently used across all businesses and brands to drive growth and product ivity. The standard operates by providing a measurement of how effective the organization is in eliminating defects and variations from processes. To control its requirements, a process must operate at 3. 4 defects or less per meg opportunities. This equates to 99. 9997% error free (Six Sigma Plus, n. d. ). Conscious application of the Six Sigma methodology to all business processes delivers greater value to its customers and makes Honeywell a more desirable business partner.The implementation of lean manufacturing processes has enabled Honeywell to maintain tight controls in all aspects of the managerial accounting processes. With the use of managerial accounting, Honeywell has ensured that their productions and service is well planned and controlled. With the budget cuts facing government, private sector job loss, and tightened markets, it is impressive that Honeywell has continued to maintain its sales growth in the United States. The motley of Honeywells world-wide enterprise , exemplifies the enormousness of a creative corporate marketing approach.Honeywell consists of unique business units, with each, offering a variety of products and services. Strategies and implementation of those strategies must be developed and penalize at the corporate, business unit, and product levels. Overall, strategy and long-term planning are guided by the companys wad and stated mission. At the business level, planning begins with an examination of the current situation, including technological changes and competitive effects. By utilise this type of analysis, Honeywell is better equipped to address and identify threats and new business opportunities.Decisions to pursue new opportunities are followed by establishing a set of objectives, often stated in terms of market share, sales volume, or profitability. Subsequently, business and marketing strategies are developed to achieve those objectives. Effective consummation of strategy in implementation must then occur for objectives to be realized. Effective monetary statement analysis will be a primary indicator that indicates the progress and demonstrates whether company goals are being met.Honeywell has been a leader in their industry in planning and control and have used financial analysis in depth to evaluate and control their growth and profitability. It continues to be effective in identifying opportunities to improve the organizations efficiency and in developing strategic plans to realize those opportunities. By using a diversity of analytical tools Honeywell is better prepared in making operating decisions, such as how and where products are to be manufactured and serviced, whether insourcing or outsourcing is more equitable, and whether to expand and the area to expand to.Timely and accurate financial statement preparation is sarcastic to the success or failure of a business. The financial officer, owner, partner or members management team of a business must review the business financi al statements and have a sober understanding of them. Financial statements are scathing to Honeywells ability to make solid, informed decisions. such(prenominal) decisions are needed in assemble for Honeywell to meet one of its primary goals, which is to realize a high rate of go past on their enthronizations. The measurement and success of this initiative is arrived at by bill it against other industry add ups.This information helps Honeywell understand that current initiatives do salute a market response. In view of the fact that the industry average can be general in nature the industry average should be used as a guide. A failure to use the data appropriately can mislead investors and have a black-market affect on Honeywells reputation and marketability. Achieving their strategic plan will not only involve Honeywells internal planning and controlling, but it will in addition involve the support of creditors and investors.Both are come across players in providing capit al needs to support new initiatives and milestones the use of financial statements in this process will no doubt be the good sense of the decision making process. It is difficult to know the health and direction of a company if financial statements are not reviewed in a incidentally manner. In its pursuit of investors, or the success in the results of an external audit, the financial statements are the ultimate representation of companys financial position.In general accounting practices, Honeywell uses process costing for its furnace thermostats (home products division) and job costing for customized aerospace contracting products. When thinking in terms of standard be and whether they would be beneficial, one factor to consider is the fact that Honeywell is a world-wide start outr with operations in many countries outside of the United States (US). There are ramifications when doing business overseas as well as doing business in the US and each scenario has its own utilitys and consequences that are unique to specified circumstances.Honeywell, like their competitors has migrated to low cost countries because of the labor rate differential. The move to overseas production creates additional concerns and dynamics. inaugural manufacturing in right aways competitive environment demands more than a single-minded focus on eliminating defects. Since the introduction of Six Sigma and Lean tools to their operations over a decade ago, Honeywell has delivered significant results for customers in terms of the quality, obstetrical delivery and value of our products and services.To achieve competitive advantage in todays environment, Honeywell has continued to build on its Six Sigma and Lean foundation, and identify new ways to differentiate themselves. Benchmark companies such as Toyota and Nissan use Six Sigma and Lean tools. Like Honeywell, they also have a disciplined management system that standardises work and engage employees in improving work processes. In doing this, organizations have achieved tremendous performance improvements. The Honeywell Operating System is a comprehensive, integrate approach to managing their organization.It is characterized by a consistent focus on results for the benefit of our customers, not on the use of specific tools. The objective is to simplify and standardize processes everywhere, to remove variation across operations, and to drive significant and sustainable improvements in safety, quality, delivery and cost. Employees are encouraged use tools such as Six Sigma, in achieving a common purpose global wide use of an operating system that consistently yields excellent results for the customers and the company. Implementing standardized cost standards is not an easy task and it will take time.Honeywell maintains that standardization will larn to fit different business environments and changing customer needs and will become an essential part of the process that will bind their company across busines s and geographic boundaries. Honeywells hands consists of residents of the country they are in to satisfy requirements imposed by foreign nations. It is almost mandatary to have overseas operations to reduce labor and material be however, these operations come with high risk. Foreign workers are not evermore equipped with the necessary skills to perform the manufacturing duties required by a highly technical company.The expense of employing and developing such a workforce can create additional costs. In determining what the additional costs, standard costs prove beneficial because they would provide Honeywell the ability to budget costs with a great understanding and degree of confidence. A standard cost system allows a company to factor in methods that would absorb the periods in which higher costs are identified due to foreign employment growth and when costs are low or minimal due to workforce stabilization.In its foreign production, Honeywell will have to set attainable stan dards in order maintain its performing baseline. Another factor in foreign operations is the volatile condition of the world. The United States is not always welcomed in other countries. It is not uncommon for a common protest to turn into a major world crisis. Such examples are those of the uprisings in Israel and Libya. Honeywell hosts operations in Israel, where relations between the government and the general population are volatile and unpredictable.In addition, we have seen several instances where regimes have changed power and attitudes toward the US in a matter of days. Standard costing is paramount as an aide for monitoring and managing the risk of unpredictability. It is a healthy practice that can protect Honeywell from severe monetary damage if a foreign tragedy should affect the business. The information obtained from standard costing aides Honeywell against the volatility of todays markets and the strategy of its competitors.Honeywell is continuously improving its pro cesses, products and management style to maintain their competitive edge. To be competitive, Honeywell will continue to use their standard cost system to help them execute planning and control of their strategic precedingities. track costs will also help Honeywell identify weakness and variances in their production system. Undetected problems in the areas of materials and labor can eventually offer variance to a point of hindering Honeywell from maintaining their core competencies.Consequently, todays market provides no room for error, but every opportunity for a competitor to gain the lead. In many respects, some of the rationale that goes into using standard costs also applies to formulating the right strategy to gain a positive Net Present Value. Honeywells reach is global and thus its investment opportunities are also global. Due to the unique factors involved with global markets, it is necessary for Honeywell to perform critical planning for investment decisions. Honeywell has a reputation as an organization that is willing to take risks to make money.It has done that by acquiring other business or expanding its existing facilities for future business. Such expansions are expensive and these expansions require additional staff which adds to the cost of investment. capacious expenditures are a challenge to control the net present value (NPV) and require clear identification of cost and risks in order to be a success. Strategic moves, such as partnering with the national government, can leverage the way to a positive NPV. In this approach, there are trade-off between the corporation and the government in which both interests can be mutually met.Corporations like Honeywell utilize these paths in order to reduce investment costs and have accurate ejectionions for calculating and incorporating NPV baselines. Because of the ongoing activity of many investments occurring at one time, it is critical that Honeywell has complete knowledge of their NPV and en sure profitable investments are achieved. Failing to do this can result in major losses, especially when an unplanned shortfall occurs. Although the investment sounds promising, it is critical that NPV is properly measured.It is also advisable from an NPV and program management position that Honeywell cast its investment into NPV milestones which help determine if they should move forward to the next conformation of the investment. This process would provide a safeguard while allowing the innovation to prove itself. While the actual rate of return (IRR) thata given project ends up generating will often differ from its estimated IRR rate, a project with a substantially higher IRR value than other available options would still provide a much better chance of strong growth.IRRs can also be compared against prevailing rates of return in the securities market. If a home cant find any projects with IRRs greater than the returns that can be generated in the financial markets, it may sim ply choose to invest its maintained earnings into the market. The need for Honeywell to practice continuous NPV drills in a market with circumstances such as those faced in China by US companies, is critical. While both countries maintain a civil business partnership, there is an unspoken adversarial relationship which creates instability.China is strategically positioning itself as a global power therefore, the relationship between both countries is equivocal and any misstep by Honeywell could severely damage the existing business relationship. Another potential concern for Honeywell is that China is currently the largest lender to the US. At the point that China reaches the economic capacity to sustain its prosperity internally, we have to ask ourselves if they will request repayment by the US prior to maturity dates. As we have seen in several European countries, a request of that magnitude could destabilize an already fragile US economy.In consideration of this scenario, and o ther contributing factors, Honeywell should be careful in investment planning, and phase its activities so that the NPV is not contingent upon results that will take a long period to realize a return. In summary, Honeywell has proven itself as a world leader of technology. This corporation is known world-wide and is a abode name. Honeywell leads the way in advanced switching and sensing technology in their home division, and its aerospace division.In spite of the GE failure, it has kept its mark on the global economy through market highs and lows and has maintained its dominant position in an extremely competitive industry. As a long-time survivor and global competitor on the world stage, Honeywell continues to make its mark in history by developing innovative safety products, driving the modernization of global air traffic management, revolutionizing combat technology and their commitment to improving operational efficiencies. Honeywell continues to display their dominance with it s diversity and profitable risk taking ventures. by chance Honeywells greatest strength has been the fact that it has adapted to a world that is ever changing and has embraced the challenge that other companies find daunting. With the continued vision to improve processes for safety, quality and cost, reducing waste, and using integrated strategies Honeywell continues to be a standard for their industry. They continue to be innovative and competitive and have a strong commitment to bringing profitable products that their customers need and want.Due to the diversity and competitive market that Honeywell has chosen to operate in, it is of extreme importance that the company maintains sound financial practices that will support the moral fiber and marketability of the company. As Honeywell moves into the future I believe they will continue to perfect their processes to produce the right financial statements, useful in calculating their position in the market, and providing the best adv ice for investment decisions. The proper use of standard costs and net present value are an example of the critical tools that ensure Honeywell continues to wave in todays unknown global conditions.Also critical to the success of Honeywell is the continued utilization of strong and proper ethical practices as the company is well known, world-wide competitor and a representative of the American business ethics and values. Whether it is in the Middle Eastern or the Far East, Honeywell is known and recognized such a position makes it important for Honeywell to be guileless in its fiscal disclosures. Sound financial practices are essential to Honeywell in order for the company to continue its success and market dominance.Primary wildness on these practices will serve to maintain Honeywells status and help them make the most profitable investment decisions for their investors and the company. As recent as April 23, 2012, Honeywell declared a regular quarterly dividend of $0. 3725 per share on the companys outstanding common stock. The dividend is payable on June 8, 2012 to shareowners of record at the close of business on May 18, 2012 (Honeywell Declares Quarterly Dividend, 2012). If this is any indication, Honeywell will continue to be a viable global competitor and financial contributor to our financial and job market.Honeywell is an excellent example of an organization that is forward thinking and proactive. It has operated with a strong ethical code of conduct, strong financial discipline and an ever present focus on the future. This methodology and political orientation will ensure their continued financial growth and market expansion. It is bare that their cost standards, lean processes, and disciplined managerial financial management has enabled them to whip obstacles, secure their position as a global competitor and a viable contender in todays competitive, technology-oriented world.