Parker Hannifin Corporation: Donald Washkewicz's Turnaround Strategies



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Code : COM0078

Year :
2005

Industry : Engineering, Electrical and Electronics

Region : Global

Teaching Note:Not Available

Structured Assignment :Not Available

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Introduction:With a market capitalization of $7,104.5 million and employing more than 48,000 people in 46 countries, Parker Hannifin Corporation is one of the world's largest diversified motion and control technologies and systems manufacturers. The US based company provides precision-engineered solutions to commercial, mobile, industrial and aerospace markets. Parker's technologies are widely used to control ormove objects. The company has its presence in three sectors - Industrial, Aerospace and Other. Industrial segment consists of motion control and fluid system components. Aerospace segment consists of systems and components for air frame and engine programs. 'Other' segment includes airconditioning systems and refrigeration components. It holds a major market share in the world's $50 billion motion-control market and has the record of paying yearly dividends for 48 consecutive years, attaining 'the top five longest-running dividend-increase records' in the S&P 500 index.

In the latter part of 2000 and in 2001, the economic recession in the US resulted in declined productivity in the manufacturing sector. To survive the recession Parker's new CEO, Donald Washkewicz, introduced lean manufacturing, continued with acquisitions and adopted strategic procurement initiative. Implementation of lean manufacturing helped the company to reduce inventory, capital expenditure and lead times and increase inventory turns. The acquisitions enabled the company to retain its sales and the strategic procurement initiative enabled the company to identify key suppliers. During the recession when the competitors in the industry were incurring losses, Parker Hannifin with its lean initiative was able to avert the losses and remain profitable.

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