Enterprise Software

GE's $200 million bet to resurrect IT

To enable its renaissance in U.S. manufacturing, GE Appliances had to completely reboot IT to act like an agile startup. TechRepublic has an inside look at the groundbreaking project.

 GE Appliance Park is an icon of American industry in Louisville, Kentucky. | Photo: Jason Hiner

"IT can't be what holds this project back."

That’s what Charlene Begley, CEO of GE Home & Business Solutions told CIO Alan Kocsi.

The project she was talking about has become the poster child of the "Revitalization of U.S. manufacturing." That's how it’s hailed by politicians, business leaders, and workers. They view it as proof that America is still a great place to make things. At its core, the project is about manufacturing refrigerators, water heaters, and washers at GE's historic Appliance Park in Louisville, Kentucky -- a plant that was on the verge of shutting down just four years old.

In 2009, General Electric Chairman and CEO Jeff Immelt said that GE was committing to a $1 billion re-investment in U.S. factories and the creation of 1,300 new American jobs by 2014 -- mostly manufacturing jobs returning from China and Mexico. As a result, GE's Appliance Park has sprung back to life, sprucing up its warehouses, retraining workers, and purchasing the latest manufacturing equipment so that it can launch new product lines of appliances from the Louisville plant.

However, the company had an IT problem that threatened to derail its ambitious plans for 21st century manufacturing. The GE Appliances division was running outdated software and systems that were cobbled together over decades. It was a tangled mess of custom apps that didn’t talk to each other and the result was that it took way too long to get reliable information about the state of business processes and the overall health of the business.

The systems were simply not nimble enough to support the kind of lean manufacturing operation that GE needed in order to make it economically viable to build appliances in America. IT was a game-stopping obstacle.

How GE Appliances overcame that obstacle -- or, more accurately, is still in the process of overcoming it -- says a lot about where GE is going as a company and how today’s enterprise IT departments are having to make radical changes in order to adapt to the relentless pace of a faster, leaner, and more global business environment. Inside GE, this initiative has been dubbed “ERP+” and TechRepublic interviewed executives, IT leaders, and key employees at GE Appliance Park to get the story on how they are pulling it off.

The near-death experience

GE had the first commercial UNIVAC computer in the 1950s. | Photo credit: GE

GE broke ground on Appliance Park in 1951. Just two years later, the site employed nearly 10,000 workers and became a paragon of American industry when GE purchased a UNIVAC computer to handle payroll for all those employees. It was the first business in the world to own a computer -- only governments had owned them up until that point -- and Appliance Park was the first non-governmental site to host one. Appliance Park was a beacon of progress in America’s post-World War II manufacturing boom.

By the 1970s, Appliance Park was churning out millions of appliances -- from washers and dryers to refrigerators to air conditioners -- and employment at the manufacturing facility peaked at almost 20,000. With that many employees, the site became a hotbed for labor disputes and was the site of several highly-publicized worker strikes.

But, by the 1980s, GE began shipping some of its manufacturing work overseas to Mexico and China to reduce costs, and Appliance Park started to shrink and wither. From 1994 to 2007, GE avoided hiring new hourly workers at Appliance Park. Employment dropped to about 5,000 workers.

Then, the 2008 global recession nearly wiped out the facility. The U.S. housing market collapse brought new home construction to a halt and since over 95% of the sales of GE Appliances are to the American market, it had an immediate and devastating effect.

In 2007, the appliances business had been the business of the year inside GE, riding the hot U.S. economy and the red-hot housing market to strong sales. But when the bubble burst on U.S. housing, the weakness of being so dependent on a single market led GE executives to consider spinning off or selling the appliance business to one of its appliance competitors that was more diversified globally. However, when GE shopped around its former golden child, it didn’t find any buyers. It was too expensive and the long-term prospects of the U.S. market were too uncertain.

Those were dark days in Appliance Park. No one knew which company might end up owning the business and there were serious doubts about whether any buyer would want to keep the aging facility open. Employment at the plant dropped to under 3,000.

But, then came a ray of light. When GE failed to find a buyer, Immault announced in 2009 that not only was the company keeping its appliance business, but it was going to make a dramatic reinvestment in Appliance Park and bring a lot of the product development and manufacturing for appliances back to Louisville.

There were three factors behind the startling about-face:

1.) The federal government stepped in and provided assistance from the Recovery and Reinvestment Act of 2009 and ultimately gave a slew of tax breaks and incentives for GE to build a new breed of energy-efficient appliances using U.S. labor (a.k.a. “green jobs”). The Kentucky state government and the Louisville city government also put together aggressive tax incentive plans.

2.) The local union in Louisville agreed to a wage reduction in which new manufacturing employees would start at $13/hour (roughly $26,000/year), or the same wage that workers at the plant received in 1980. That was down from $22/hour, as the union and the community made the trade-off of more work versus higher paying jobs.

3.) GE decided that it could change its business model for appliances. It had previously outsourced much of its product development and manufacturing to overseas suppliers (many of whom were now entering the market with their own products). GE had relied on the strength of the GE brand and the company’s distribution to make money. However, GE made a bet that it could “invest, in-source, and innovate.” In other words, by bringing product development and manufacturing back to the U.S. it could decrease the time it would take to bring new products to market and out-innovate its competitors in the appliance market.

GE's Appliance Park campus is 900 acres and has its own zip code. | Photo credit: GE

The IT problem

Even with the victory of keeping Appliance Park open plus all of the excitement around bringing jobs back to the U.S. and launching new product lines from Louisville, there was a dark cloud that threatened to rain on the parade. The existing IT systems in Appliance Park were not prepared to support the kind of hyper-innovative environment that GE Appliances was staking its future on.

"We didn't really invest in IT for 20 years," said Kevin Uhls, IT Director of GE Appliances.

GE Appliances had 2,673 disconnected workflows, 530 applications, 444 IT platforms, and thousands of different databases. The integration between these systems was almost non-existent. Uhls characterized the IT environment as "very good silos and very little trust.”

It was mess. And it couldn’t support the high-tech manufacturing juggernaut that GE wanted to create at Appliance Park.

So, GE went hunting for a CIO who could lead an IT transformation.

Alan Kocsi, CIO of GE Appliances

They called Alan Kocsi.

Kocsi (right) had worked at Appliance Park 15 years earlier and since leaving Louisville he had worked at several different divisions within GE, including Healthcare and Capital, and he spent a good deal of time in Asia with GE Corporate. Since an important segment of the IT department at GE Appliances was located in India, that experience was highly valuable.

When GE Appliances approached Kocsi in late 2010, he was living in Florence, Italy and working as the CIO of GE Oil & Gas. Kocsi earned recognition at Oil & Gas for leading the integration of the company’s ERP, PLM, and CRM systems, which saved $38 million and reduced the time it took to create proposals from 15 days down to a single day.

"I got the phone call,” Kocsi recalled. “And they said, 'Would you be willing to come back to Appliances to lead this project?'"

Kocsi was intrigued.

He remembered the GE executives telling him, "We're reinvesting in the business. We're going to change the game. You know the [appliance] business."

It was a new challenge, a big challenge. But, Kocsi was quietly confident that he had the experience to help Appliance Park pull off the kind of big transformation that it needed.

"I had a track record at GE for doing some different things,” he said. “I was the one who had set up all of our software development centers in India. And I had a history of doing ERP projects. It was good fit.”

ERP+

When Kocsi returned to Louisville, it didn't take long to figure out that he had a huge task in front of him and a lot of urgency to drive change quickly.

"When I got here we had no budget, no plan, no team," said Kocsi. "But, we knew he had these M1 product go-lives staring us in the face and we didn't want to put the new business model on the old systems."

M1 was GE's internal name for the reinvestment program that was bringing product development and manufacturing back to Appliance Park. GE was on the verge of committing a lot of time and resources to the legacy platform that tied together the most important parts of the computing environment. Kocsi knew that it wasn't the answer for what the team needed to build.

"I sat down with the CEO and the CFO and they told me that the thing that they loved about the IT department here is that it did everything that they asked. The thing that they hated was the IT department did everything they were asked. They were looking to us to provide guidance as opposed to just following orders; to take a swing and do something different."

That was January 2011 when Kocsi arrived. He was ready to do something different -- really different.

Kocsi quickly evaluated the tangled mess of different systems that Uhls described. In fact, he recognized a lot of them.

"I knew most of the systems because they really hadn't changed in 15 years," he said.

He decided to pull the plug on the vast majority of them. The problem with the existing systems wasn't just that they were outdated and didn't integrate well with each other. It was also that they were so customized and specialized that only the employees at GE Appliance Park knew how operate them. In some cases, that meant only a handful of people. There were times when the company had to practically beg employees not to leave or retire because they were the only ones that knew how to operate the systems. A standard solution was needed.

Kocsi said, "We cancelled about $6 million of stuff that we were going to do on the legacy environment. We sat down and in 90 days we crunched a plan that said, 'This is the tech stack we're going to go to.'"

The tech stack involved taking hundreds of different apps and platforms and a bunch of different custom ERP solutions and consolidating into one standard ERP from Oracle and a handful of supporting apps. Here's what the primary stack looked like:

  • Supply Chain Management (SCM): Oracle and Proficy (a product from GE Intelligent Platforms)
  • Order Ship Bill: Oracle
  • Financial Resource Management (FRM): Oracle
  • Product Lifecycle Management (PLM): Windchill
  • Customer Relationship Management (CRM): Salesforce and Siebel (an Oracle product)

The first three items on the list are traditional components of ERP, which is all about driving efficiency by closely integrating these systems. However, Kocsi and team wanted to tightly integrate all five components, in a move that they dubbed "ERP+."

Photo credit: Jason Hiner

"We rolled up an original estimate of what this was going to cost. It was in the neighborhood of $150 million," said Kocsi. "We sat down with the business and we said, 'Look. We're going to stop working on a whole bunch of other things that are not strategic to the business and we're going to replace about 75 percent of the environment."

The reason Kocsi was able to do that without freaking out the entire business unit was that he went to Mark Shirkness, General Manager of Appliance Distribution Services, and made him a partner in the project. Kocsi said he had heard a lot of great things about Mark as a leader, so he went directly to Mark's office and sold him on the plan. Then he got the CEO to appoint Mark as the business leader for the ERP+ project.

By the end of the first quarter of 2011, Kocsi and Shirkness had their plan.

"We pushed about 70 percent of our resources to [ERP+]," said Kocsi. "We looked at licensing costs and we said 'If we stop doing the other work, it's about $40-60 [million]' at the time over a five year spread and we said, 'That's not bad. The business can digest that.'"

But, as part of the overall technology plan, GE Appliances would also need a modern data center to support the kind of cutting edge systems that it would need to run this type of environment, and that was going to add additional cost to plan.

So, at a time when more and more American companies were outsourcing their data centers to the cloud, GE Appliances decided to build one of the world's first LEED Platinum Certified data centers right in the middle of Appliance Park -- not far from where it had implemented the world's first commercial UNIVAC computer five decades earlier. (It should be noted that a variety of tax breaks and government incentives helped make it economically feasible to put the data center in GE's Louisville facility.)

Agile deployment

Even with its aggressive plan to move to a more standard technology stack, getting full buy-in from the business stakeholders, and a new data center on the way to support the whole operation, Kocsi and his team still faced one seemingly-insurmountable obstacle: Time.

After taking 90 days to put the plan together, the leadership team entered the second quarter of 2011 with a lot of enthusiasm about the plan, but no idea how it was going to pull it off in time to help the business start shipping its next-generation appliances by the first quarter of 2012.

Using the traditional “waterfall” project management methods, a project of this scale would have taken at least 18-24 months to implement. It would have meant gathering tons of requirements, creating sequential schedules, and delivering all of the value at the very end when the project completed.

“We knew that there was no possible way of using traditional waterfall [if] we were going to hit any of our dates," said Kocsi.

"We would have overdeveloped,” added Shirkness. “We would have been trying to create too much solution, instead of trying to phase it. Our appetite is too big."

So the team started searching for alternatives.

"We also looked around the industry,” Kocsi said. “For example, we talked to some folks that had been involved in the Whirlpool [ERP] implementation that broke the business. We did some benchmarking around people that weren't as successful and that was our number one [goal]: 'Don't break the business.'"

What the group ended up doing is the part where this story gets really interesting.

GE workers consult on how to solve the latest challenge. | Photo credit: Jason Hiner

Knowing that it needed to create business value much faster than the usual enterprise IT project, the team decided to try a mashup of bleeding-edge techniques from several different playbooks -- business management, manufacturing, and software development. The result was creative, risky, and highly unorthodox. But, it has been so successful that it may turn out to be a new model for how to run business technology projects and how to organize IT. A decade from now, I expect you’ll find a full description of it in college courses and textbooks on business management, and it will be filled with fancy jargon about Agile, Gemba, Lean Manufacturing, Moonshining, and Andon. For now, we’ll mostly try to sum it up in simpler terms.

What GE Appliances decided to do was break up the project into smaller chunks. Things that essentially would have been software components or features in a bigger rollout were now treated as individual products, and as they were completed, they were rolled out into production so that users and the business could start benefitting from them -- and improving them -- right away. This approach is based on Agile Development from the software programming world, where the focus is on a continuous set of incremental releases rather than one big software release.

"We started the process in the April/May [2011] time period,” said Uhls. “The team went through the Agile process and getting into their sprints and builds and releases. We had our first release in late October."

In other words, within six months of starting the project, the group was already pushing out new pieces of the platform for employees to begin using. But, part of the formula was that they pushed out the release to a department or subset of users, who used it and gave feedback. Then the release got refined and improved and the rollout went out more broadly to the rest of the company.

Uhls said, "Instead of pushing it out to everybody, we push it out to one product at a time. That gave us the ability to learn quick and fail fast. We learned that there were issues with some of the things we needed to do. We were able to work quickly to get that fixed within two weeks and then continue the rollout process."

One of the challenges of the incremental approach is that some processes were moved to the new system while other processes are still in the old systems.

Uhls said, "Because we're doing it in stages, we had to build bridges -- temporary bridges."

Shirkness admitted, “It's a challenge to the user because we're used to delivering the whole pie or cake. It's part of our culture. We're used to getting it all. Now we're just giving them one piece of the cake at a time. And there's a challenge there in saying, 'I'm going to give you something but you can't do your whole job with it.' You kind of have to grow into it. So you get pieces of the functionality, and that's a little unsettling because they're worried about when's the next piece coming, what does it look like? … The user needs to get used to a different way of dieting, of getting their nutrition."

The Big Room

The way that the team overcame the user challenge was to make the users part of the process from the very beginning. They broke down the walls between the business and the IT department and between the technologists and the users. What was the magic formula? They put them all in the same room.

They created a mission control room for the ERP+ project and co-located the IT people, the business stakeholders, and the employees who would eventually be operating the software all in the same room.

Shirkness said, "That's the whole idea behind The Big Room: It's to create collaboration from the get-go and it's really one seamless team. You really can't tell the difference in many respects between one of Mark's business people and one of Kevin's IT people. In many aspects they walk and talk and do many of the same activities. The idea of The Big Room is to get the people that have to make decisions as close together as possible without barriers in between."

GE employees collaborate in the ERP+ Big Room. | Photo credit: Jason Hiner

"There are no handoffs, by design,” said Uhls. “If you're in a circle instead of a sequential, there are no handoffs."

Kocsi said, “We drive decision-making faster. And you just break down all the communication barriers by doing it this way."

This is based on the Lean Manufacturing concept of Gemba, which means “The real place” in Japanese. The idea is that you have to go to the place where the real work is being done in order to create value and make a change.

At Appliance Park, one of the key components of The Big Room where most of the work for ERP+ was being done was visual decision-making. All of the active teams and working groups had charts, diagrams, timetables, giant post-it notes, and other visuals stuck to the walls in their area of the room. In a traditional project, this information would be locked away in spreadsheets, documents, computer files, or employee notebooks. Putting it all up on the walls made it easy for anyone on the team to walk around the room and see the status of all the active parts of the ERP+ project and established a consistent level of accountability for everyone working on it.

The ERP+ Big Room uses visual management as part of the Gemba process. | Photo credit: Jason Hiner

It’s an analog process in a digital world -- and in the future maybe all of the paper will be replaced by LED screens -- but the visual element is a centerpiece of The Big Room and one of the factors that drives a powerful sense of unity among the larger team. It’s also critical for executive engagement in the project, since it gives them an incentive to do Gembas -- or walk-arounds -- on a regular basis so that they can check on the state of the project.

"They've used things like this in manufacturing,” said Kocsi. “We've just taken that approach, stole it, and applied it to an IT project. Never done that before."

Shirkness added, "We stole the principles of ‘Moonshine’ [rapid prototyping], ‘Andon’ [bottom-up quality control], and ‘Gemba’ from the manufacturing world here and have been able to apply it… It's mission control but a vast majority of time is actually spent with the user. That's Gemba. Andon is the ability to raise your issues and get a resolution and speed decision-making. So those are the principles that the room is built on that allow us to work with such speed. You can make good decisions and be informed because you're at the place where the work is. You're able to raise your issues and get decisions made [and] evaluate your risk faster. And you're able to experiment and get experience and grow and learn from 'Moonshining.'"

Here's an example of the visual charting in the ERP+ Big Room. | Photo credit: Jason Hiner

The new normal

One word that you rarely hear from the CIO and the tech leaders at GE Appliances is “IT.”

Rob Freshman, IT Governance Leader, said, "It's about business process transformation. It's not an IT project. And that's the difference-maker."

ERP+ still has over a year left before it’s completed, but it’s on schedule and the team continues to methodically roll out the pieces of the platform. The new data center launched in August 2011, and the whole IT revitalization initiative remains on budget at $200 million.

Most importantly, GE Appliances manufactured and launched its first new product, the GeoSpring Hybrid Water Heater, in February 2012. Shortly thereafter in March 2012, it launched an even more ambitious new product line from Appliance Park with a set of French-door bottom-freezer refrigerators.

Photo credit: Jason Hiner

The motto for ERP+ that I heard over and over again from Kocsi and the other members of the team was, "Fail fast to succeed sooner." Everyone I spoke with at GE Appliances has embraced the incremental approach.

"Never let best get in the way of better,” Kocsi said. “It's a continual evolution and improvement as opposed to designing something perfect up front... I love the concept. I love the visual management. I love the Gembas. I think this will be the way we work on projects for the foreseeable future. "

Ultimately, it’s given GE Appliances the speed, flexibility, and efficiency that it needs to produce better appliances. That makes this brand of IT a force multiplier and a competitive advantage.

"It's about turning the company around to play offense against our competitors," Freshman reminded.

IT is playing its role in that. If necessity is the mother of invention, then the IT department at Appliance Park should be strangely thankful that it had to re-think its operations in order to meet an impossible deadline. In the process, it came away with powerful new ways of running the company. And, there are plenty of other organizations that can benefit from the example.

“Seriously, I'm sold,” said Kocsi. “I'll never go back to managing an IT department any other way."

Further reading

About

Jason Hiner is the Global Editor in Chief of TechRepublic and Global Long Form Editor of ZDNet. He is an award-winning journalist who writes about the people, products, and ideas that are revolutionizing the ways we live and work in the 21st century.

33 comments
HypnoToad72
HypnoToad72

Maybe GE should stop hitting uncle sam in the first place. It's a free market - supposedly, government needs to stay out of it altogether, and how much we pay for corporate welfare should be entirely irrelevant to begin with - "investors" being an excuse for the inflated "profits" and legalized larceny going on, so I cannot agree with your comment, TNT. Especially as the article states wage devaluation, so let's start guessing why the economy is still in the dumpster... more on that in a moment. MCLBD's points are far stronger and closer to the truth . And we wonder why the economy has gone downhill, when we're reducing pay levels from 2010 levels to 1980 levels, without the cost of living and other factors going down to match. Indentured serfs, anyone? ;)

eclypse
eclypse

Before they could even have the success that they had, they had to have all sorts of tax breaks to make it profitable. What does that say? To me it says that current taxes kill US businesses and keep people unemployed. They had to get the unions to agree to $13/hr _STARTING_ wages. Meaning that companies can't afford to pay exorbitant union wages for every single person whether they are qualified or not. No one that commented mentioned how the unions leech money from the workers, how rich the unions and union bosses are, and how they really do enrich themselves off the backs of the poor. One of the themes in the comments seems to be that 1980s wages are a joke and that they're beating the workers into submission. Really? Again, here is an opportunity to work, not a forced labor camp. These same people would have complained if the company had just closed the doors altogether. I do not appreciate that GE appears to get all these tax breaks because they are huge donors to the Democrat party and Mr. Obama. If it is so good for GE and he's serious about putting people back to work, then it seems to me that this whole notion of raising taxes is not the way to get people employed after all. I was excited to see that they were using Windchill for PLM. I would like to have seen some detail of the systems they implemented and how that worked, how did they integrate the Oracle ERP systems with Windchill, what pieces of Windchill did they use, what other PTC products did they use. What architecture does all of this run on? How many servers are required to support all this? Did it really take some huge datacenter to support this one division? Perhaps that could be a topic of another article?

mclbd
mclbd

Let me see - this is a success because its a company GE didn't want in its portfolio but couldn't sell so being smart enough not to invest their own money, grabbed some government handouts, beat the workers back to 1980's pay scale, threw some people in a room and declared victory? No doubt appliance sales must have improved recently or you would not have been granted access to do this story. Probably improving with the improved economy that Jack was refuting right before the election. Back to red flags - How about the CEO quote that “IT can't be what holds this project back.” Are you kidding me? This is a business that was held up as a raging success 15 years ago for having figured out how to successfully offshore IT and lower costs. Now we hear that “We didn't really invest in IT for 20 years”. That will get you savings every time. I wonder how much easier this upgrade would have been with local IT folks that had 15 years worth of experience maintaining these systems and investing in their manufacturing IT skills? And when I say "local IT folks" I'm not talking about managers. Would love to know how much was paid to offshore resources during this time. Also wondering what's become of all the other save-the-day business/IT innovations now that we've moved on to Agile? No mention of (in addition to Outsourcing, which failed here) Six Sigma, DFSS, DMAIC, Work Out, CAP, Work Life Balance...

aerockette
aerockette

Great article. Favorite part- “I sat down with the CEO and the CFO and they told me that the thing that they loved about the IT department here is that it did everything that they asked. The thing that they hated was the IT department did everything they were asked. They were looking to us to provide guidance as opposed to just following orders; to take a swing and do something different.”

Walthy
Walthy

When we were doing these kinds of things in the 1980s, the IT department tried to put us out of business. We were making changes to systems and interfaces almost overnight to improve the user interface. Management finally got their wish (after our "good" management that supported us left) and we were all driven out of our jobs, IT consolidated our project and it finally failed. What IT (IBM Shop) would have taken 18 months to design, we implemented in days or weeks on our DEC system. This was in a government setting and it was a fun and the most productive time in my life. I often spent 80-100 hr weeks writing code (self taught) and managing systems while still having to do my other duties managing another department and up to 100 employees at various times. I was single at the time, couldn't have done it with a family! In the end it wasn't appreciated and I had to move on, probably because it was a threat to the status quo. It is so great to hear of a project like this that is successful. If we can learn from this about how to make this happen and can transfer these ideas to others it will be worth all the tax money spent because this is a "real world" laboratory. The only way these kinds of advances can be made is with real leadership and commitment from management, management who is not afraid of short term failure for long term gain. I applaud GE for this example of investment and belief in our (US) system and in our homegrown ingenuity. You may complain about the low factory worker starting pay, but I guarantee that the people in the big room were making more than the $13 per hour and deserved even more than what they were paid. I'll bet they are all proud of the work they have done and that is worth a lot. Now, how to keep that environment alive and productive into the future. I'm retired now, but would go back to work in an instant if I could work at a shop like that. By the way GE, I'm already looking into purchasing a hybrid water heater and now am not afraid to buy one from GE.

wboettch
wboettch

Fail fast, fix fast. Ok, let's look at the second half of that: Fix fast. Now the first word: Fix. Hello? The IT dept. and some workers probably recommended for years that databases be combined, systems integrated, etc and it fell on deaf ears and was not approved. The key to all these improvements is that they just decided to actually do it where before there was corporate malaise at the thought of spending any money or making any change. The Big Room just helps workers overcome their fear of calling the helpdesk.

Chetzoo
Chetzoo

Good read and inspiring stuff!!!! GE achieving their deadline to deliver their business goals is absolutely necessary to make the rest of the world think twice before investing in bigger projects. This can either be a classic case study in years to come based on GE's achievements from here on. Agree with Jason that economics is complex but such innovative and bold ideas will only take GE further in potentially creating the green jobs, which in turn sets the ball rolling in the US manufacturing industry. Kudos to Mr.Kocsi and team for their achievements so far.

sjok
sjok

I recently purchased a cooktop from GE via home depot. I have not yet installed it but have read the installation instructions. They only covered how to anchor it to the counter for wood or tile countertop while we installed a granite counter. After calling around to various GE contacts all we got conflicting suggestions or a plra of ignorance. After considerable investigationfrom non-GE web sites I found a satisfactory method. However, it does not generate much confidence in GE's attention to details considering that engineered and natural stone are very popular.

johnnylately01
johnnylately01

...is Good Buddies with 0bama, so that is how he got so much of my money, er, sorry, Federal Government money that grows on magical trees. GE also has had several years of not paying Federal taxes. Almost the definition of fascism.

wyattharris
wyattharris

When I first saw the headline I thought GE was recreating the old ITS group. I was hired on in 1999 3 months before Y2K and as soon as the event fizzled was laid off and ITS was majorly downsized. Good read none-the-less.

dcmccunn
dcmccunn

In 1951 Lyons Co. in England installed the world's first business computer called LEO. GE's was first in US.

jaredborne
jaredborne

I admire GE for wanting to bring jobs back to the US, but as long as there are unions, they will be back in the same mess they encountered in the 80s.

count_zero_interuptus
count_zero_interuptus

Are their people and smart machines on the floor whose information is being collected and reported accurately, easily, and in real time? Are plant floor processes and work orders being driven and managed by systems integrated with the planning and ordering systems? Inquiring minds want to know as these are key elements of a scuccesful seamless manufaturing company's information model. Or should be.

gfhill
gfhill

"a plant that was on the verge of shutting down just four years old." Since the plant is referred to as "historic", I assume this was meant to say "four years ago." or was the plant really only 4 years old?

codeguy007
codeguy007

I'm all for bring blue collar factory jobs back to North America but why do we have to ship our skilled IT jobs to India to do it. Bringing unskilled jobs to North America and shipping skilled jobs to 3rd World Countries in the end will make North America 3rd World. If we keep shipping all our it jobs to India soon there won't be enough qualified IT professionals in North America and we will need to start hiring East Indian IT professionals and moving them here because the unemployed IT guys here don't have the skills companies want. Oh wait companies like Morgan Stanley have been doing that for years. Their IT department is basically run by East Indians. No offense to the East Indians, they do a good job but this is at the expense of local unemployed IT professionals. All in All, this GE plan seems like a nice idea but is only trading unskilled jobs for skilled jobs (I do understand that's generalization and some factory jobs are skilled).

DavidHarrisLH
DavidHarrisLH

I think your comment about GE being the first commercial organisation to have a computer is wrong: LEO, Lyons Electronic Office, was running for J Lyons, the UK baking and catering company, in 1951. I guess this is what Mike@ was questioning above

tarose.trevor
tarose.trevor

... it just sounds to me like through their whole history they just wanted to beat workers into submission, and when they failed to get as much as they wanted, they off-shored ... and now that the locals are desperate for work they are starting back up again. Government grants + tax-breaks + workers on $13 per hour ??? ... isn't that called incompetent management &/or no business case whatsoever?

edjcox
edjcox

Finally a rejection of the idiocy epitomized by J Welch who made himeself rich, destroyed GE's stock value for millions, closed and shuttered a major manufacturing companies multiple plants and layed off hundreds of thousands of workers from good paying postions... GE needs to get back to manufacturing and producing and doing it smart and economically. We can do this and begin a resurgence of American manufacturing in high technology desireable products... Bravo!!

mike
mike

What about Leo c. 1949?

thebaldguy
thebaldguy

An inspiring story. And my favorite part: I didn't see any mention of Microsoft. :-)

tbragg
tbragg

Great job, GE! And kudos to the team who are making it happen... When we look across the industry, however, we see more ERP failures than we see successes. Consider, for example, the multi-year CSC / Oracle ECSS project for the Air Force, which has been declared dead only recently: over $1 billion spent, "negligible value received". In that case, and in many others, the better solution would have been to modernize the old applications, add SOA for integration, remove redundancy, and become more agile with a code base uniquely adapted to the requirements. The last thing that should be done in these situations is the traditional, spend-3-years-writing-requirements-and-blow-the-budget waterfall approach. So why is the GE experience different? It has to come down to the people, to the sociology, to getting committed people in one room and making a difference. And that is why this lesson is going to be hard to duplicate and use as textbook material -- because there will be different people with different motivations in every case. Hats off to Mr. Kocsi, too, he's obviously a leader and in the end, that's the one thing that is always in short supply: leadership. Now the question is, once the ERP is in place, how does information processing STAY agile? Because customizing the ERP going forward is a limited option...

CR2011
CR2011

I think it is great that GE is bring jobs back to the US. I agree with Jason Hiner, investing $1B in their facilities is going to have a positive affect on lots of different businesses in the local area and even surrounding states. However, I think it would be better to highlight the IT overhaul after 20 years, the process changes that make their IT dept more efficient and more of a business driver and finally a nice new datacenter. Rather than what it is costing them. As @maszsam has pointed out, on the surface spending $150 million on new software to save up to $60 (over five years) doesn't on the surface make sense. Add in a $1B datacenter and then it seems like they are just creating a showpiece to say..."Look what I did". It doesn't seem practical or efficient. As the title implies....I hope the "bet" includes a lot of efficiency for their business that will translate into billions for the economy, that have not been discussed in either article.

maszsam
maszsam

That is $769K and change for each job. Or enought for each "worker" to buy a 100k house and get 50K a year for 13 years or their $13/hr for 24 years. Hell, I'll take that. There are a lot to variables in play, but I'll hold the applause until after a couple of years running. Even if, the place might still go under. Didn't hear a lot of chatter about customers in the article. Material peice of a business plan is that if customers don't buy you go broke. Maybe this is part of GE's discussion but much like with the Volt, I'm not hearing it. FYI $13.00hr is just over 1/2 the average wage in the US. After income taxes SSI, sales tax, yatty yatty, you are talking poverty level for just one person working with a family of 4. A single person could finance a car on it though. While a firm capitalist, I am convinced that there is probably some level of government interaction that is good. But do the math on this one and it has "insane" written all over it. A billion dollars to create poverty level jobs? Really? So if all goes well, and you work all your life at one of those jobs, you can expect to die poor. Wage cropping action. And yet, it is better than millions of Americans are doing right now.

HAL 9000
HAL 9000

The company is unwilling to pay what it owes. They want Special Dispensation to make money and will go out of their way to screw as much as possible out of the system for their own benefit. There was a Multi Million Pound Business in the UK back in the early days of the 20th Century who paid all of 14.30 TAX over a 50 year period. They used the same argument that not paying Tax allowed them to employ people and some idiot politicians accepted that stupid argument. The reality was that all not paying any Tax did was make a few people very rich and did noting to support the country that they depended on for their profits. In defending them from the aggressors the Country that had been Robbed went broke and no one could understand why that happened. In this case GE has taken it one step further and they have experience that Off Shoring isn't the solution but they have used it as the [b]Big Stick[/b] to screw all Governments and Unions into accepting what is better for the company while drastically reducing costs. Personally I wouldn't be surprised if GE got Tax Breaks to move the Production Off Shore in the first place from both the US and the country that they where moving production to. Bosch has done much the same thing and Off Shored their White Goods Production out of Germany and as a direct result they have cut prices charged for their finished product but at the same time have produced a range of goods that is unlikely to survive the warranty period and still be usable. Their Fridges have an issue with Coolant Lines inside the cabinet splitting and rendering the unit unrepairable. So their costs have actually increased as they sell a unit and then before the warranty ends they have to replace it with a free one or give a refund. Very much like the Old Soviet idea of making things we don't need to make any spares or product improvements we just make more and use the excess production to replace the failed units that we built. In the case of Fridges customers may buy on price initially but they soon learn that cheapest isn't necessarily best. I know quite a few people who bought cheap fridges who didn't survive the warranty and now have purchased the expensive ones from a different maker which where way too expensive when the originally purchased the unit only to now believe that they have got better value for their hard earned money. This would not be unnecessary if there where Sales People on the floor who where willing to do the right thing by their customers instead of relying on volume for their Commissions. As suggested above the reliance on Volume Production and sales is nothing more that a continuation of the Old Soviet Era methods of making more than should be necessary to cover the failures of the substandard product. When any company starts believing that Price is the Be All and End All of their products they have failed and are in the process of dieing. ;) Col

codeguy007
codeguy007

If they owed money to GE Capital, they could have been run out of business in 4 years. Never borrow from GE Capital!

DesertJim
DesertJim

Britain was the birthplace of commercial computers. The Ferranti Mark 1 produced in 1951, the first one went to the university but the next nine were sold commercially, (including in Canada so the US might just have noticed). However there is a lot of Sperry hype on how Mauchly & Eckert invented the first computer. Not true as the US courts showed in 1973. However it wasn't the Brits it was Atanasoff who built the first proper digital stored program computer, but the Brits were the first to commercialise them. Next thing you'll believe is that Edison invented the electric light bulb.

jasonhiner
jasonhiner

Public companies don't invest money to create jobs. They invest money to make money, which requires skilled workers to make it happen and ends up injecting money into the local economy and has beneficial effects on the entire ecosystem. You also have to remember that those 1,300 jobs are only the jobs that are for full-time workers at GE. Lots of other contractors and consults end up getting work out of the reinvestment. The manufacturing business is also far more automated than it used to be, so much of the investment is also in equipment, systems, software, etc. So that money goes to companies that are making hi-tech products to help GE be more efficient (and the people at those companies are highly-paid specialized workers). The economics are lot more complex (and favorable) when you look at the whole picture.

tarose.trevor
tarose.trevor

GE is a company I boycott wherever possible ... I have no faith in their ability to be a positive member of the global community, instead it seems quite certain that their interests are universally to the detriment of all, including themselves, as they do not appear to have the wisdom to see the difference between financial profit & nett benefit.

info
info

...but I worked for GE in their Capital division a few, well, MANY now... moons ago. The GE Capital ITS division in Canada was thriving, well-managed, and made a good profit. GE Capital ITS in the US decided to take over management of the Canadian division completely to boost their numbers, since they were losing money hand over fist. Our leadership team took severance (they knew what was coming) and left, and the new leaders outlined our new business model, which was the same as the money-losing US business model. I left soon after, and I think the company was gone within the next year or so, soon followed by the 'main' US division. So, no. Just because these big, high-powered types decide to go for a drive, it doesn't mean they're not going to go right over a cliff when they're convinced that their way is the right (and only) way...

RudHud
RudHud

"The federal government stepped in and provided assistance from the Recovery and Reinvestment Act of 2009 and ultimately gave a slew of tax breaks and incentives for GE..." Why, if not to create jobs? And by the way, how much is a slew? How much skin does GE and its investors have in this game, and how much is supplied by Uncle Sugar?

TNT
TNT

But I still long for the days when people invested in a business because it was THEIR business and would never consider it the taxpayers responsibility. If we paid less taxes maybe GE would have found investors instead of having to hit up Uncle Sam.