GE 2011 Annual Report Download - page 10

chain to other companies. This made
sense in an era when labor was expen-
sive and material was cheap. Today, our
material costs are more important. So
we have to control our supply chain to
achieve long-term productivity.
To control our product cost, we leverage
both human and technical innovation.
Human innovation comes in the form of
lean manufacturing. At Appliance Park,
in Louisville, Kentucky, we have torn
down functional silos and replaced them
with a “one team” mentality. We know
that one key to success is driving down
manufacturing hours per unit. In some
factories it takes nine hours to build a
refrigerator. Our employees in Louisville
are working to cut that to three hours.
By revamping what was a 25-year-old
dishwasher line, the Appliance Park
team has reduced the time to produce
by up to 68%, and the space required by
more than 80%.
Our Aviation business and its sophisti-
cation—in advanced manufacturing,
computer modeling, and material
sciences and composites—is a great
example of technical innovation. For
instance, the use of different qualities
of carbon fi ber and resins enabled us
to create unique fan blades, fan cases
and components that sharply reduce
engine weight compared to traditional
all-metal versions. Impact-resistant
properties make these fan blades
extremely durable. This allows us to
substantially lower engine cost and
accelerate “speed to market.”
In 2010, we launched an enterprise
initiative called “GE Advantage”
to drive operating results. We have
30 industrial projects under way,
utilizing ideas from thousands of
employees and targeting $2 billion of
margin improvements. Our team is
using classic GE tools like lean, work
out and Six Sigma. Projects have
big payoffs.
In our Oil & Gas business, our goal is to
give customers a new business quote in
a day, have a project be operational
in a year, and have our equipment
always available for customers’ use.
This would result in several hundred
million dollars of benefi t for our
customers and GE. Our Aviation supply
chain team is trying to compress the
learning curve on new engines, again
with a huge payoff in margins and
cash, with improved customer quality.
This is the GE team, fi nding a better
way. This is how we will become leaner
and more productive. This is how we
will sustain improvements in margins.
We will reward investors through
smart allocation of capital. Our busi-
ness model generates a lot of cash.
Over the next few years, thanks to
NBCU monetization, dividends from GE
Capital and solid growth, we expect to
have about $30 billion in available cash.
This will provide us with an opportunity
to reward investors while protecting us
against a volatile economy.
One of our top priorities is to grow
dividends. We’ve increased the
dividend four times in the last two
years, and we have a dedicated
focus on increasing the GE dividend
in line with future earnings. We have
found that focusing on acquisitions
between $1 billion and $3 billion in
industries we know improves our
chance for success. Don’t look for
any big deals in 2012. Ultimately, if
GE ADVANTAGE
Our rejuvenated focus on process excellence and process improvement is already delivering big returns.
Nearly 40 GE-wide projects currently under way will yield billions in margins over the next three years.
New product
introduction
Commercial
excellence
Service and Contractual
Service Agreement
excellence
Acquisition
integration
Order to
remittance
Inquiry
to order
GE Capital
deal conversion
Speed/
Bureaucracy
8 GE 2011 ANNUAL REPORT