HBR.org released an article “The CEO of General Electric: On Sparking an American Manufacturing Renewal” where CEO Jeffrey R. Immelt speaks about GE and the reason they are bringing advanced manufacturing jobs to the United States. While he did mention many common cost factors such as labor, shipping, and currencies, his main focus was on innovation. “At a time when speed to market is everything, separating design and development from manufacturing [doesn’t] make sense.”
The first main point was centered on human innovation. Immelt claimed that to stay competitive GE doesn’t just need a new investment, but “an entirely new approach – one centered on ensuring not only that [they] had the best people but also [they] empowered them to execute.” So at Appliance Park (Louisville, Kentucky) instead of restricting employee innovation by putting them in a box, employees were given the reigns. “Designers, engineers, and assembly-line workers together determine the best way to meet their goals; they own the metrics.” This has led to reducing production time by 68% and space required by over 80% on their 25 year old dishwasher line and more.
Technical innovation is another factor that brings manufacturing back to the United States. GE has found that its R&D development, especially in partnership with universities, has been an important asset for innovation. “But these partnerships…are vital not only for designing and producing the materials, systems, and processes that will come to define air travel but also for developing tomorrow’s engineers, who are critical to America’s competitiveness.”
Immelt denies the idea that industrial decline is unavoidable for the United States. He thinks that global competition from emerging markets is a challenge to face, but not an impossible one. “To meet that competition, we’ll need a strong core of innovation and a stable financial system built around helping small and medium-size businesses and industrial companies to succeed. We’ll need an updated infrastructure to support manufacturing, which the private sector can help fund—better roads and airports, broadband capability, and a bigger and smarter electricity grid.”
“As a country, if we want to revive U.S. manufacturing and regain our competitive edge, we have to execute. But we also need confidence and the mind-set that we can outperform anyone. We should start by making a serious commitment to manufacturing and exports.”
To read a free preview of the article, you can find it on HBR’s site.