The three-part strategy mapped by Rockwell Collins looks disarmingly simple: optimize the core business, expand the core business by building on strengths and experience, and move to lean electronics.

But the implications are extremely profound. They amount to nothing short of reinventing the whole company to become a leader in aerospace electronics.

Not just avionics, but electronics.

"We aim to supply all the systems in the cabin as well as the cockpit, and the equipment that makes it interact with the ground," said Rockwell Collins president Clay Jones.

So fast is technology and progress moving that it can be difficult to define "core business." Take in-flight entertainment, a business Collins bought from Hughes-Avicom two years ago. "Then it would have been a growth opportunity. Now it is part of our core business," said Jones. "We started the company's consolidation of its many businesses with in-flight; I see it as a new expansion of our market definition of aviation electronics."

Now called Rockwell Collins Passenger Systems, the business generated $450 million worth of orders last year. RCPS hardware is flown on more than 100 airlines around the world, and has been expanded to business aircraft. "Growth is phenomenal," said Jones. "We've seen a greater than 100% increase in revenues this year.

"There is a great deal of potential for future growth," he said. "We're looking at expanding the existing portfolio and adding new functions in the future," he added. These passenger services could include satellite TV, Internet access, even gambling.

It's a similar story with head-up displays. Collins this year completed its purchase of Flight Dynamics, the market leader in head-up guidance systems for airliners and business aircraft. "Now it's part of the core business," said Jones. He sees strong growth in it for regional and business aircraft, where it is marketed aggressively with the Pro Line 21 avionics systems.

Not yet a core business but expected to become one with massive potential for expansion is Collins I2S Integrated Information Systems, which will enable and manage all cockpit and cabin communications with any other system such as ATC, Internet, satellite TV, and e-mail--all while handling the communications demands of Free Flight.

"The aircraft will become a node on the information network, facilitated by broadband information flow via satellite constellation," said Jones. "The timing for this couldn't be more right; we see the need for it more and more as we talk with our customers."

Initial I2S systems are currently on test with Condor Flugdienst, the charter affiliate of Lufthansa, in a year-long demonstration in Europe of technologies required to link an aircraft-based intranet to terminal area databases.

"We have real live hardware flying in real live aircraft," said Jones. "It's not an engineering drawing."

Collins is meanwhile progressing with new CNS/ATM Free Flight avionics systems, such as its multi-mode receivers with GPS navigation and other FMS capabilities, including microwave landing. Nearly 7,000 have been ordered by 73 airlines worldwide. "This brings more functionality in the same package, and at a lower cost," Jones said.

Underpinning all these strategies is a re-engineering of the entire company--not just manufacturing--under the philosophy of "Lean Electronics," roughly equivalent to Six Sigma elsewhere in the aerospace industry. Goals include a 35% improvement in productivity by the end of 2000, a reduction of 25% in needed floor space, a 70% reduction in supplier lead time, and a 65% reduction in work in process.

The result: far greater efficiency, a far lower cost structure, and a much more rapid response time to customer demands for new products and new technology.

"What differentiates this from Six Sigma is that it is a completely integrated, company-wide effort," said Jones. "The focus is on elimination of waste of every kind, in materials, in processes. We take it a step further and question whether the processes we have are the best processes for the job in hand."

As other companies have discovered, such practices also result in greater quality and reliability for the customer, and more competitive costing. "Our business is to help them stay in business, then they remain our customer," Jones said.

Up-front costs are high. Rockwell Collins will invest $80 million in its enterprise resource planning business information system alone over three years to ensure compatibility of all computer systems throughout the company. "It is," said Jones, "the largest investment Rockwell Collins has ever made in a single process."