General Electric’s Competitive Advantage, Research Paper Example

Abstract

As the organizations within the United States move manufacturing and other business interests back into the United States a series of operational efforts are needed.  Insourcing capabilities back stateside encompasses increasing efficiencies, maintaining standard operating procedures and complying with the appropriate rules and regulations.  The business environment changes dynamically based on the increase responsibility to meet financial, operational and strategic goals and objectives while also maintain key effectiveness and efficiencies within the business model.

GE’s Ability to Create a Competitive Advantage in the United States

In Louisville, Kentucky, the General Electric Company is taking on multiple major initiatives in which the focus of their business model is moving from an outsourced focus model to local development and implementation of their goods.  The focus is to manufacture a series of appliances that are designed, engineered and assembled in the Louisville, Kentucky manufacturing plant.  The focus of GE is to invest heavily in the domestic production of their appliances to create centers of excellence in Louisville, Kentucky, Bloomington, Indiana, Decatur, Alabaman and Selmer, Tennessee.  This investment over the course of five years will top over $1 billion and add 1,300 jobs to the manufacturing plants.  This is a revitalization effort by GE to ensure their appliance business is committed to become increasingly competitive with the expanding market and to ensure market share stability and then growth in the appliance market.  With the movement of work from abroad to centrally locating the efforts stateside, this not only does this have positive impacts on the local community but with it the move also brings questions and concerns about administrative laws as well as considering applicable sales, licensing and e-Commerce laws that may need to be taken into consideration while starting up an enhanced and in some cases new manufacturing facilities in the United States.

Multiple elements are relevant to GE’s manufacturing facility investment. The investment of over $1 billion could be in jeopardy if the company does not abide by the appropriate laws and legal standards.  This includes the aspect of administrative laws that impact the lives of the persons involved.  1.1 Company and Project Strategy

The General Electric (GE) Appliances division provides multiple lines of washers, dryers, dishwashers, refrigerators, ovens, and other branded appliances for home and business use.  Each model line targets different markets divided by price points, cooking needs and wants as well as other key demographic sub-sections.  GE Appliances has been in business from over 50 years and with that age and experience comes processes and business systems that are antiquated and ingrained into the business model (General Electric, 2012).  Through the drive of competition and the grasp on obtaining market share there are many opportunities that have arisen to align the business with consumer demands.  Those demands are not only for the goods and services that GE Appliances provides but also how they obtain those goods and services.  This includes managing the relationships between suppliers to ensure the business receives the parts it needs to manufacturer the appliances as well as providing the area for the consumers to easily obtain information about the products and purchase the appliances.

A solution in the form of collaborative effort by the business and information technology teams found that an Enterprise Resource Planning program could provide what the company needed.  In this project it is vital to understand that while the replacement of legacy information technology systems will occur there are changes to the business processes that will drive the technology used for implementation (Magal& Word, 2011).  The information technology processes and systems will change but how the business is conducted from procurement of goods from a supplier, through manufacturing and production to ultimately providing a finished product will change as well.

The General Electric Company has many divisions and one of those divisions include the Appliance Manufacturing Division.  With the inherent difficulty with moving manufacturing processes from the established outsourced methodology to a more insourced centric model there is a need to utilize technology and e-business to create a strategic advantage. The focus on effectiveness and efficiency in not on the manufacturing steps of the process but also the entire procurement to payment lifecycle is critical to developing the advantages necessary to compete on a global market (General Electric, 2012).  The Enterprise Resource Planning (ERP) will provide the framework to deliver products to the consumer while also all to the utilization of process, system and communication efforts to create that competitive advantage. The ERP program implementation requires multiple changes to the business processes as well as the implementation of new software technology (Kotter, 2012).

As GE moves the manufacturing of the new product lines to Louisville, this means that the engineers, developers and other creators of intellectual property will fall within the confines of the United States administrative laws around protection of intellectual property.  When developing new products and innovations there is a direct correlation between these developments and the increase in trade secrets, patents, trademarks and copyrights, all of which need to be protected.  According to Bendory, Macedo and Kasden (2012), the United States Patent and Trademark Office carry out the function of examining patent applications and then grant the rights to those patents.  This is of utmost importance to businesses within the United States because the ownership of the intellectual property could be of more importance than that of the actual facility to manufacture the product.  The ownership of the patent allows the exclusive rights to that to the applicant for that item.

In order to create an environment where a business can thrive there needs to be guidelines and regulations to ensure a fair and open market for competition.  In order to ensure this is established there are financial laws that facilitate the administration of antitrust and security laws.  With a company as large as GE, there are certain parameters that it must ensure it operates within to ensure not only compliance but also includes the elevation of awareness of specific laws and regulations regarding reporting.  Since GE is a U.S. based company which is publically traded many, if not all, of the administrative laws around finance have been addressed.  The important areas of concern regarding this area is reporting of tax and ensuring compliance with all applicable tax laws regarding manufacturing, selling and distribution of finished goods within the United States.  This is particularly important when vendor selection and how parts are sourced for the goods.  The management of the supply chain to ensure all regulations and compliance of those regulations are adhered to falls within the purview of GE.

The business model of the General Electric Company’s appliance division revolves around supply chain management and a centralized focus on distribution of products to their consumers.  With many companies that sell products to consumers, it is the sales force that drives market strategy and determines the best tools to provide key data to their customers. This is due to the fact that the more sales that are generated the more production supply is needed to meet that demand. The unique situation is the dual marketing strategy of GE based upon their customer.  It is also GE’s responsibility to drive demand by providing world class appliances and to ensure the end consumer knows the reliability, features and other key performance specifications GE must provide a way for the end consumer to obtain that information.  With the changing marketing environment, consumers have the ability to shop from the luxury of their homes and gather key data prior to going to the actual brick-and-mortar locations to see the products in person.  This is why GE needs to embrace not only their internal view of product quality but also present that information externally through the use of ecommerce and the technological advances that the ERP system will offer.  The ERP system will provide the ability to synchronize the internal systems to ensure quality products to the consumer while also meeting their demand schedule and allowing the availability needed by end consumers to have the product on-demand and in the specifications they desire (Monk, & Wagner, 2009).

Within the planning function supply, resource and planning capabilities are split into separate organizations in which each own a specific responsibility.  The Supply function encapsulates supplier management, procurement activities and the logistics for delivery to the plant locations.  The second area focuses on resource planning.  Resource planning includes port management, intra-organizational logistics, forecasts for part supply and part usage as well as the ability to understand the demand of the customer and how it translates into the manufacturing and supply chain management.  The tertiary pillar of the supply chain management operations within GE is the Demand Management function.  The customer collaboration extends to not only the end customer and ensuring the quality products reach the consumer but the customers include retail chain stores, service providers and other outlets.  The customer collaboration efforts allow for a synergistic leveraging between customer and GE to create an environment for success within the supply chain.  The opportunities to reduce cost, increase transit availability and improve efficiencies between organizations all occur due to a collaborative nature among partners.  The graph below is depicting the organizational supply chain breakdown based on the three pillars.

With the planning aspects working between the three pillars, the opportunity to hone the supply chain becomes relevant.  GE embeds the ability and drive to continually improve operations, tasks, procedures or any other aspect within the organization that can receive a benefit from improvement.  By aligning the business philosophy to achieve a superior supply chain management operation through the installation of best practices as a framework and then working to continually improve the capabilities allows GE to operate on the cutting edge of technology in many regards while also focusing on internal processes and procedures to achieve maximum capability, efficiency and effectiveness.

This ability to provide the highest quality and dependability as well as the look and finish desired by the consumer will drive overall demand.  With ecommerce the more information available to a consumer the better the consumer can be informed about their decision to buy.  This also drives the ability to derive value through the use of the relevant theory (Atkinson, 2014).  By searching on the internet for a “quality” or “dependable” appliance the search engine can return products such as General Electric or other appliance manufacturer.  GE is not only taking advantage of this relevant theory attributes through quality and dependability but it is also utilizing the intangible gains of bringing manufacturing capability back to the United States through the potential efficiencies of the ERP system and processes.  People searching for “Made in the USA” or “putting America to work” will fall upon the relevant returns such as General Electric Appliances.

References

Atkinson, C. (2014). Managing for excellence in the public and nonprofit sectors. Florida Atlantic University.

Bendory, A., Macedo, C., and Kasdan, M. (2012). Federal circuit clarifies three-step recapture rule for analysis of reissued claims. Journal of Intellectual Property Law & Practice, 7 (9).

Kotter, J. (2012). Leading change. Boston, MA: Harvard Business Review Press.

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Sabino C., (2005). Administrative law without the state? The challenge of global regulation, New York University, Journal of International Law and Politics. (12. 1).

St. Bernard Citizens for Environmental Quality, Inc. v. Chalmette Refining, L.L.C., 399 F. Supp. 2d 726 (E.D. La. 2005), Retrieved from: http://www.tulane.edu/~telc/assets/Court%20Orders/10-14-05%20St.%20Bernard%20Chalmette%202d%20SJ%20Ord.pdf