In a story that is nothing short of flabbergasting, GE has discovered kaizen.
After meteorically rising and falling as the best managed company in the world driven by Jack Welch's 'maximizing shareholder value NOW' philosophy – to one requiring billions of tax payers' bailout money – the champions of using Six Sigma to rationalize outsourcing everything including over 100,000 American jobs - from "outsourcing 70% of everything and 70% of that outside the USA and 70% of that to India" – to recommitting to manufacturing while trying to sell off many of their manufacturing assets but finding no interested buyers - to this.
Thirty years after everyone else, GE has discovered lean and is taking the first baby steps toward lean manufacturing 101.
“ 'Toyota is 50 years ahead of us,' said GE's Rich Calvaruso, whose title is now 'Lean Leader.' 'It is a new approach,' for GE, he said. 'We are on a long journey.' ”
Not only is Toyota '30 years ahead of you, Rich, the average mom and pop machine shop around the corner from you in Louisville is 25 years ahead of you.
The boys running GE have been so tunnel visioned on Wall Street for the last 40 years they still call it "Japanese efficiency".
" 'The business is shifting … to one that starts with the most efficient way to manufacture the product as possible,' GE spokeswoman Kim Freeman said" What did it start with before Kim? But then we know the answer to that – the one with the lowest labor cost – quality, waste, cycle times and value creation be damned … the cornerstones of 'maximize shareholder' value thinking.
Don't get me wrong. I am glad to see that GE is thinking about joining the party. A couple of kaizen events is a pretty lame start, but at least they have finally figured out what everyone in manufacturing has known for decades. They sound like a bunch of teenagers who have learned about sex for the first time – and think they invented it.
"It will be interesting to see where GE is going with this and what it will do for them," said a Detroit consultant by the name of Aaron Bragman. I agree. In fact, I wouldn't be surprised if in ten years or so they find themselves on the leading edge of lean and invent ideas like kanbans and value streams.
Late addition: Here is a Lean 101 video GE has put out concerning their lean effort at Appliance Park
Thanks for the laughs on a tough start to the week. I can’t wait to learn about this kanban thing…
Mike LaChapelle says
The original article in the Courier-Journal is very poorly written and researched. GE has been doing lean and working with Shingijutsu since at least 1991. That’s almost 20 years.
Bill Waddell says
If it’s true that GE has been working on lean with the same consultant for 19 years and they are still trying to understand the concept by fumbling around with Lego blocks they are in more trouble than I thought
robert hafey says
Earlier his year I had the opportunity to visit the GE Erie, PA plant where Dan McDonnell, a long time AME supporter, and a group of passionate lean thinkers have used lean tools to reduce the lead time of producing locomotives. If you visited them you would see that lean is not new at this GE plant. Here is a link to a post I wrote about my visit. http://lean-safety.blogspot.com/2010/03/gee-size-doesnt-matter.html
david foster says
The article in the Courier-Journal may be poorly researched, but the link I posted as a comment to the post below this one was an actual GE press release on the same subject. (Of course, it’s also possible that a PR person was exaggerating to make a point and maximize the amount of “ink,” as they say)
Also, GE is more decentralized than many companies…it’s entirely possible that some other component (aircraft engine or steam turbine, say) is considerably more advanced than the appliance people in Louisville.
I’d really like to hear more about this, and hope that some current or recent GE people will chime in.
Paul Todd says
Bill, I must say I thought you were being a little harsh on the GE folks, until I read the article. I had to read the first sentence twice: “To build the first new production line at Louisville Appliance Park in 50 years…” Can that be right? In describing the idea of collaborating with line employees to build the new process, we learn that for GE, “This is a radical departure from our normal engineering and manufacturing process.” My understanding was that GE had been quietly migrating from Six Sigma to lean basics for several years, but apparently that didn’t include appliances. Maybe someone has decided there is value after all in making something every household needs. Better late than never – I wish them great success!
Bill Waddell says
I don’t doubt the lean assembly efforts GE has made in Erie and elsewhere. However, the fact is that GE went on a wholesale outsourcing effort to turn all of these factories – locomotives in Erie, jet engines in Cincinnati, appliances in Louisville, and just about everything everywhere into final assemblers. Not too many years ago the guy in charge at Erie was boasting that he had outsourced over 50% of the value adding there, and was well on the way to meeting the 70% outsource goal. They have ‘leaned up’ the easy part and the least value adding – final assembly. But, hey, like I said – glad to have them at the party – better late than never.
“GE has been doing lean and working with Shingijutsu since at least 1991. That’s almost 20 years.”
Since Shingijitsu is sometimes credited with introducing lean to North America over 20 years ago, what does this say about them?
More importantly, what does this say about the Lean consulting industry that was born from their “successes”?
David Merkel says
Remember Lean is just a terminology, just like Six Sigma. I worked for 17 years at a large process manufacturing company starting in the 80’s. The things we were doing when I started there would have been considered Lean Manufacturing, Six Sigma, Green Chemistry Recycling, Benchmarking, Employees First, pick your “program” name.
Remember, this was the 80’s, and we had been doing it for many years. Just because something has an acronym, or a program name does not make it useful or effective. In fact, we felt it was damaging.
Ever heard of “Don’t let the tool become your master”? That was one of our fundamental principles of operation. We used what worked, and worked very hard at not giving anything a flavor of the month or program name. What was most important was acting on principles, like creativity, innovation, lean, trust. Programs come and go, these other things do not change.
For Mike LaChapelle,
I worked at a manufacturer who hired away a GE VP in 1998, 7 years into GE’s lean transformation, according to your information. The philosophy must not have sunk in during his GE years. He ran EVERYTHING by Jack Welch’s book: short-term earnings per share over quality; “new” performance management system – the same one on your profile that lists you as a “top performer” or A1 – encouraging the old blame and shame game and killing teamwork. The guy was a VP at GE and it’s as if he’d never HEARD of lean.
I cannot IMAGINE for the life of me, GE turning that ship around to the lean philosophy after Neutron Jerk. NEVER.
Robert "Doc" Hall says
The tangled history of lean at GE can’t be summarized quickly, and a reporter new to the idea can’t dig deeply into it when on a deadline. It’s also common for new management arriving at a plant to have a very limited understanding — or take little interest — in what might have happened there before they arrived.
Ed Spurgeon and a few others at GE began “experimenting” with lean about 30 years ago. Ray Rissler headed GE Appliance in the 1980s, and introduced lean ideas there. At various plants, lean came and went; sometimes looking “pretty good;” then fading. After Welch imposed six-sigma, it took a back seat, and lean methods gradually worked their way into six-sigma. Given the emphasis on personal results by staff and management, employee participation always had a rocky time.
To me, GE never seemed much different from many other companies practicing “lean.” Senior managers regarded it as a bundle of tools, along with other bundles of tools. Consequently, effort to imbed it in the culture is very recent.