Product Services

The precursor to our Product Services initiative was a GE where new product development was primarily “where the action was” for our huge corps of engineers and scientists. The best and brightest of these wanted to work on the highest-thrust jet engine, the fastest medical scan or the leading-edge electrical turbine design. Product services consisted of less-exciting maintenance of our high-value machines — turbines, engines, medical devices and the like.

Making the numbers at GE gets you into the game. Living the values and leveraging the operating system is the road to promotions and greater personal rewards.

As recently as 1995, when this initiative was launched, GE derived $8 billion a year in revenues from product services. In 2000, this number will be $17 billion.

The premise for the Product Services initiative was the collective realization that while GE cannot win, and shouldn’t play, in the “wrench-turning” game, it could find enormous growth in the high-technology, customer-productivity game — where there are few, if any, who can do the things we can do for that customer.

The human resources focus in the operating system made services the new “place to be” for the best and brightest. Big, exciting, high-technology jobs in services were created. And the GE values system — increasingly tied to customer focus — reinforced the shift.

But the most important key to the long-range success of our services initiative is the understanding that leading-edge technology can only be derived from creating great products. By driving this leading-edge technology back into the installed base of older equipment, we can increase our customers’ productivity and, in turn, make them more competitive — with significantly lower investment on their part. We want being a product services customer of GE to be analogous to bringing your car in for a 50,000-mile check and driving out with 100 more horsepower, better gas mileage and lower emissions.

For example, the technology in the world’s most advanced, highest-thrust jet engine — the GE90 — is now being migrated into yesterday’s installed base, refreshing 20-year-old customer engines, improving their thrust, fuel efficiency and time on-wing.

“H” gas turbine technology, the world’s most advanced, is now improving the efficiency and heat rate of customers’ 20- and 30-year-old power plants. Twenty-first century AC locomotive technology is making 1980s’ locomotives more reliable; and 1990s’ CT machines are producing better scans because of infusions of technology from Six Sigma-designed twenty-first century platforms.

We understand that to be a great services company, we must be a great leading-edge product technology company — they go hand in hand. Using tomorrow’s technology to upgrade yesterday’s hardware will make our customers more successful and create for GE a rapidly expanding services business for decades to come.

Six Sigma Quality

The Six Sigma initiative is in its fifth year — its fifth trip through the operating system. From a standing start in 1996, with no financial benefit to the Company, it has flourished to the point where it produced more than $2 billion in benefits in 1999, with much more to come this decade.

We want being a product services customer of GE to be analogous to bringing your car in for a 50,000-mile check and driving out with 100 more horsepower, better gas mileage and lower emissions.

In the initial stages of Six Sigma, our effort consisted of training more than 100,000 people in its science and methodology and focusing thousands of “projects” on improving efficiency and reducing variance in our internal operations — from industrial factories to financial services back rooms. From there, our operating system steered the initiative into design engineering to prepare future generations of “Design for Six Sigma” products — and drove it rapidly across the customer-interactive processes of the financial services businesses. Medical Systems used it to open up a commanding technology lead in several diagnostic platforms and has achieved dramatic sales increases and customer satisfaction improvements. Every GE product business and financial service activity is using Six Sigma in its product design and fulfillment processes.

Today, Six Sigma is focused squarely where it must be — on helping our customers win. A growing proportion of Six Sigma projects now under way are done on customer processes, many on customer premises.

The objective is not to deliver flawless products and services that we think the customer wants when we promise them — but rather what customers really want when they want them.

One thing that the truly great companies of the world have in common, regardless of the diversity of their industries, is a total business focus on servicing customers. With Six Sigma as the enabler, we intend to meet that standard.