Academic journal article Research-Technology Management

GE Is in a Startup State of Mind: In a Return to Its Industrial Roots, GE Is Refocusing Itself around Advanced Manufacturing and Related Technologies

Academic journal article Research-Technology Management

GE Is in a Startup State of Mind: In a Return to Its Industrial Roots, GE Is Refocusing Itself around Advanced Manufacturing and Related Technologies

Article excerpt

Long-lived companies like GE have to reinvent themselves from time to time. GE is over 120 years old now, and a key factor in its longevity has been the company's willingness to reinvent itself to stay relevant and meet today's market demands. The last two years, in particular, have been a time of dramatic change both in GE's business portfolio and in the way the company does business. GE works in eight business segments--seven industrial areas (Figure 1) plus GE Capital, GE's financial business. At the end of last year, GE Capital accounted for about 70 percent of the company's earnings. Within the next year and a half, this unit is expected to contribute only 30 percent of our total earnings, while the industrial earnings rise to 70 percent.

This is a big shift for a $ 150 billion company, and a return to our industrial roots. More than that, an increasing focus of the financial side of the company is to help drive more access to markets for our industrial products. The main catalyst driving this transformation is GE's increased and sustained commitment to technology. At the center of it all is GE's Global Research network, where I serve as a technology director. It's a very global, market-focused organization. 1 lead a global team whose sole focus is to help our businesses develop products, create new services, and bring new technologies to market.

GE started the very first industrial lab in the United States; today this research center is a thriving, expanding global enterprise and one of the world's most technically diverse. Because the labs innovate for every GE business, they sit in a unique place from which to view the entire company. It is from this vantage point that they can help coordinate big shifts in the company--especially those influenced by technology.

Today, I would like to share three trends that are changing GE and the way it does business: the industrial Internet, advanced manufacturing, and an operational shift that includes internal initiatives called Simplification and Fast Works. The industrial Internet and advanced manufacturing both capitalize on the convergence of the digital and the physical worlds. Both of these are important to any industrial company. For example with respect to manufacturing, GE spends over $72 billion a year on its supply chain and factories. So imagine if a 10 percent savings in these costs could be achieved. That would be the equivalent of a Fortune 500 company.

These initiatives are both led and coordinated out of GE's Global Research operations by other technology directors. Bill Ruh, who leads GE's Software Center of Excellence in San Ramon, California, and the Software Sciences and Analytics technology domain at Global Research, is driving our industrial Internet initiative across the company. Another technology director, Christine Furstoss, who leads Global Research's Manufacturing and Materials technology domain group, is driving our advanced manufacturing agenda.

We're also working to streamline how we execute and manage our businesses through the Simplification and Fast Works initiatives. These are being embraced at all levels of the company. Simplification is pretty straightforward and easy to relate to in a personal way. When you live in a house a long time, you build up a lot of clutter and sometimes you need to clean out the house. That's essentially what Simplification is to GE's business processes. If a company is in business for a long time, it builds up processes, lists of approvals, checklists, and other bureaucracy, which is just not good for business. A lot is being done within GE to make things as straightforward as possible, simplifying everything from cost structures to reporting structures.

[FIGURE 1 OMITTED]

If Simplification is cleaning house, Fast Works is about applying a new way of thinking to industrial research and product development. Traditionally in long-cycle businesses like GE Aviation, new jet engine platforms are introduced once every 10-15 years. …

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