General Electric (GE) is one of the oldest American companies and has remained successful over the years. It is a global corporation that offers different products in various countries. Currently, the firm has over 3000 employees in all its branches (General Electrics, 2022). The growth into new markets in different continents has made the company continuously improve its supply chains, making it more efficient to meet the demand of its growing customers. The supply chain is essential as it encompasses how a company deals with the suppliers of its raw materials and the buyers of its finished products. GE’s supply chain is at the center of its business activities and strategies since it is one of the organization’s operations management practices. It impacts the company’s operations management through strategic planning and relationships with customers and suppliers. It also has aspects of technology and innovation, which make it adaptive and dynamic and respond to the needs of the customers at any time. Moreover, the supply chain also integrates with other departments of the business to ensure a smooth flow of processes and collective organizational outcomes. Consequently, analyzing and understanding supply chain management practices within an organization is critical as affects various operations of the business.
Supply Chain Management
Globalization is one of the main drivers for the expansion of the company into far markets. With the company headquarters in the United States, it is expected that operations in other countries may be challenging without proper operations management. GE’s decades of experience have enabled it to understand the market and the global trends demand and supply forces, which has made it develop a robust supply chain. The company’s supply chain plays a crucial role in its production and sales, making it one of the most successful companies in electric product supply. Mukhamedjanova (2020) defines supply chain management as a combination of science and art meant to improve how a firm acquires its raw materials to manufacture its products and how to deliver the finished goods and services to the customers. Thus, it is a combination of several factors with the company at the center. Supply chain management can affect the efficiency of a business based on how it integrates with the existing technologies and adaptability to future advanced innovations (Khatua et al., 2021). Effective leadership can leverage the power of technology to enhance the firm’s efficiency, by integrating several elements that enhanced the supply chain.
GE’s Supply Chain Management and Impact on the Company’s Operations Management Efficiency
General Electrics has a special sector in the company known as GE Supply. The firm supplies its products to both industries and commercial consumers in different markets globally. This indicates the need for a strong supply chain that can enhance the organization’s serviceability and product production. Ben-Daya, Hassini, and Bahroun (2019) reveal that an effective supply chain must have five key components: plan, source, make, delivery, and return. Plan involves the strategic point of the entire supply chain and is usually the first element that an organization address. GE’s strategic approaches have majorly been around getting into new markets, establishing the company in new countries, and increasing contact points. The company has effectively managed these areas by successfully getting into new countries, capturing the markets, and establishing more factories. For instance, the firm has major plants in the U.S.A., India, Germany, and China, which have been strategically placed to serve different continents (General Electrics, 2022). The plan has worked because the situation of different manufacturing centers has provided easy access to raw materials and landing zones for products produced from factories on other continents.
The second element is the source of the raw materials a company uses to produce its finished goods and services. According to Biswas and Das (2020), the source of input plays a crucial role in the success of an organization. An efficient company should be strategically placed where it gets its raw primary inputs in the most cost-effective ways. GE has placed its factories in countries that have the raw materials it requires for its major products. Since the company produces different electronic products, each of its factories focuses on specific items, hence are in areas that are closer to the suppliers of the items needed to manufacture such items.
The third crucial aspect of the supply chain is the making of products that meet customer demands. This bit involves scheduling various activities that aid production, component testing, product packaging, and product delivery. According to Ben-Daya, Hassini, and Bahroun (2019), this step is considered one of the critical areas of the supply chain where a company must measure quality levels, including output and employee productivity. GE has a robust approach to managing its manufacturing department (General Electrics, 2022). The firm has various facilities and frameworks that keep track of every aspect of the manufacturing process, thus keeping the production within the required levels (General Electrics, 2022). The organization measures the market needs and organizes the supply of its various products such that they are provided ahead of the production schedule. This ensures that the factories do not run short of the items needed during the production phase.
Delivery is another factor of the supply chain that defines how efficiently a company performs. Kamble and Gunasekaran (2020) indicate that it is crucial to ensure that the manufactured products are always available to the customers to meet their needs. GE has well-defined logistics that enable the company to supply products to various parts of the globe. It uses its factories as regional primary warehouses before the specific products are picked by its subsequent distributors. The organization also has a good relationship with the distributors in all its markets, making it experience fewer challenges with its logistical operations (General Electrics, 2022). Moreover, the invoicing system in the company is easy to manage, making distributors an easy way of handling their shipments according to their schedules. Such an effective delivery system makes GE have some of the most wonderful suppliers who act as its ambassadors at the point of sale (General Electrics, 2022). Moreover, this makes it easy for customers to get their products on demand, thus directly filling their needs.
Lastly, a returns system is important in ensuring that the customers are convinced that a company is mandated to fulfill its duties of satisfying its customers’ needs. An effective supply chain ensures that clients can easily return defective goods and be assured of getting new ones or repairs. GE provides ways through which customers can return their products due to any reason, according to the company’s policies. The firm has dealers in different parts of its regional markets, who can handle repairs on behalf of the organization (General Electrics, 2022). In cases where the repairs are impossible, the distributors act as the point of exchange for the returned products. This makes it easy for GE to continue its manufacturing and distribution roles, without directly handling the customers. Consequently, the company’s supply chain positively enhances its operations management, making it to continue meeting its customer demands.
GE Supply Chain and Technology
Technology is a crucial element in any manufacturing and service industry. GE uses different technologies in the entire production line, including in its supply chain. This has been through outsourcing the required machines and services and in most cases, the company uses its internal frameworks. One of the main challenges in using outsourced services is the cost, flexibility, and alignment with an organization’s goals. These challenges affected the efficiency of GE’s supply chain for years, which is why it acquired ShipXpress in 2016 to expand its digital rail offerings (Ge.com, 2022). The acquisition of the product significantly improved the company’s supply chain management, thus overcoming the initial challenges it faced.
ShipXpress is a renowned cloud-based software company focusing on the transportation of commercial and industrial products to where they are needed. It enables GE’s supplies to operate efficiently with the company and all other partners involved in the organization’s logistics. As a supply chain addon, ShipXpress extended GE’s transportation portfolio in the logistics value chain, enabling it to get a new and extended range of offerings for shippers (Ge.com, 2022). It also provided GE with the ability to give the necessary information and transactions to all the company’s customers using the railroad globally.
Before the acquisition of ShipXpress, GE used Predix, which was also effective in delivering its products. However, with the changing technological environments and cloud computing, the organization needed to go a notch higher in its logistics management. The acquired product enabled the company to track data in real time using its embedded sensing chips (GE acquires top supply chain software provider ShipXpress to expand digital rail offerings | GE News, 2022). This also provided a way for the firm to realize an advanced, scalable cloud-based supply chain management that doubled as a method for accelerating product and information delivery. Moreover, this acquisition meant that the customers would be served with real-time information, enabling them to plan effectively based on whether their ordered products are for commercial or consumer use.
The current economic situation drives the need for more effective approaches to delivering services. According to Sun, Yu, and Solvang (2020), cloud-based supply chain management is increasingly becoming popular because it is cost-effective and easy to manage. However, the wide range of information collected about customers poses some of the greatest challenges for businesses that intend to adopt such systems. Some of the major issues have been associated with privacy concerns, including traffic customers. Most countries are concerned with their citizens’ data stored by foreign companies, hence tend to regulate them a lot. On the contrary, the supply chain does not incorporate several customers, which can cause detrimental personal information leaks.
The technology used by GE currently does not enable it to understand such information regarding its supply chain. Even though cloud-based computing mainly targets supplies and distributors, the company can integrate it with big data to help it understand its customers’ needs from a wide perspective. With a cloud-based solution, it is possible to integrate with other service providers and thus understand consumer behavior, purchasing power, and other critical supply chain trends. According to Yafooz et al. (2020), several organizations such as Google, Facebook, and Twitter, provide crucial information that when synthesized to the needs of a company, can help it understand specific customers for targeted production and service. Thus, GE can implement a deep data analytics technology using its cloud-based logistics management to help it reach more clients by understanding them and satisfying their specific needs.
Supporting Functions to GE’s Supply Chain Management
The success of any supply chain depends on several factors that collaborate to ensure it is efficient. GE has multiple interlinked departments that ensure the company’s supply chain is operating within the intended limits. These include customer service management, strategic planning, workplace culture, supplier relationships, and availability of information. GE has a dedicated that focuses on managing the needs of the company’s clients ensuring that each transaction is addressed individually (General Electrics, 2022). This ensures customer satisfaction with the services offered and enables the company to get the client’s feedback. The firm also ensures that each product shipped to the buyers is handled with equality and justice, such that there is no customer treated with any prejudice. It also focuses on meeting the needs of the purchasers and then designs the best pricing plans that meet each customer’s profile. Thus, the customer management department plays a crucial role in making the supply chain more efficient.
The strategic business plan is also a crucial area that ensures the supply chain operations are optimized. GE focuses on improving its supply chain through localization and self-managed storage facilities before the products reach distributors. It does this by addressing each strategy within a given period. Moreover, it also considers the present situations and offers solutions that tackle specified challenges faced by the company. In addition, the firm deals separately with long-term challenges that require between two to five years. All these strategic moves ensure that the supply chain of the organization is always set to meet its specific needs at any time.
Workplace culture is a crucial element in supply chain management as it directly addresses the primary factor of production, which is the workforce. According to Sabuhari et al. (2020), human resource is the most important element of production in any company as it is directly involved in incorporating all other factors into the final production. GE ensures that the company addresses the needs of its employees by improving how the management relates to the workers. Sabuhari et al. (2020) indicate that such relationships are crucial in building strong teams that result in better production. The company also ensures that its 3000 employees are focusing on their specialized areas, thereby increasing their productivity. Such approaches ensure that the teams’ needs, and welfare are all considered and addressed, thus allowing them to focus their attention on their respective duties. Consequently, those involved in the supply chain value put more effort into their respective jobs and ensure that every operation moves as intended.
Supplier relationships are crucial in providing the needed raw materials for a company to manufacture its products. It indicates how an organization treats its key providers and how such relationships impact the business. The company’s annual report for the fiscal year 2021 reveal that GE does not have a well-managed relationship with suppliers because it focuses on the pricing of the raw inputs. Such approaches harm the business as the suppliers feel pressed to offer products at unfavorable costs. However, the business also performs well in its strategic plans with the supply chain because it works mainly with those that provide the needed materials at an agreed cost. GE achieves this by making its factories closer to the raw materials, hence do not have to work with the costly suppliers who charge for the costs incurred in transportation to longer areas.
Lastly, GE uses various technologies that provide information to the supply chain management department. The company has special sensors attached to each of the products, making it easy for the organization to track each item in real-time. This integrates with cloud-based computing, which ensures that the customers also see their shipments accordingly. All the parties involved in the supply chain have specific spreadsheets that relate to their transactions, thus understanding each of their individualized activities within the system. However, the organization does not collect enough data that it can analyze to inform it about various clients’ needs. Having access to such data can help the company to further enhance its supply chain, thus becoming more efficient in the industry.
The company’s supply chain management impacts its strategic plans, resulting in the creation of new distribution channels in more markets to address the needs of regional customers. It also affects the firm’s factory locations, especially, near the sources of raw materials. Moreover, the supply chain influences the company’s manufacturing operations, how it delivers finished products to the customers, and how its handles returns. The organization uses various technologies in its supply chain management, where it initially utilized the Predix software, which tracked products based on the sensors placed on them. It later acquired ShipExpress, which is a cloud-based supply chain management software that expanded its range of customers and functionalities. However, the technology does not use big data analytics, which has become a crucial point in modern companies. Furthermore, the company’s supply chain is interlinked with customer service management, strategic planning, workplace culture, supplier relationships, and availability of information, all of which enhance its efficiency.
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