GE to Use Lean for New Product Line

Company is shifting strategy to one that starts with the most efficient way to manufacture, changing the whole strategy of product development

GE Appliances & Lighting will invest $600 million over the next year four years at its manufacturing facilities at Louisville's Appliance Park to set up two major product platforms -- the GeoSpring Hybrid Water Heater and a new frontload laundry pair.

The first completely new product line to be manufactured at GE's Appliance Park in more than 50 years will be developed and manufactured using the Shingijutsu philosophy or Lean production system. GE's engineers, quality, production (hourly and salaried) and sourcing teams have abandoned the traditional tools of their trade, left their work spaces, and co-located in one work area, under the instruction of senseis, to execute the (3P) strategy - production, preparation and process, the company explained.

"This is a radical departure from our normal engineering and manufacturing processes, which utilize high-tech equipment, involve massive manufacturing equipment and hand-offs from team to team. The Lean process is a hands-on, one team approach," said Dirk Bowman, GE Appliances manufacturing leader. "Now, the Lean process instructs the teams to learn by doing and to leverage the power of collaboration. No more sending engineering drawings or strings of emails from building to building. They work as a co-located team, which allows them to make adjustments in real-time."

The company said it chose to re-energize its domestic manufacturing capabilities in part due to the availability of job-creation incentives from state and federal governments, as well as competitive labor costs as a result of the 2009 Competitive Wage Agreement between GE and IUE-CWA Local 761.

In addition, the business is shifting the overall investment strategy to one that starts with the most efficient way to manufacture the product as possible, eliminating waste from the start -- changing the whole strategy of product development.

"The journey will take several years to fully implement," said Bowman. "But the changes point to a promising future for appliances in Louisville and will strengthen our competitiveness globally. The new investments represent a major commitment by the Company to our Appliances business and to our Louisville workforce."

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