Operations Management in General Electric: Supply Chain, Process Design, and Challenges

This article discusses the operations management in General Electric, a transnational corporation that focuses on digital industrial products. It covers the type of operations in General Electric, supply chain management, process design, and challenges faced by the company. The article also provides solutions to the supply chain management problems.

Running head: OPERATIONS MANAGEMENT 1
Operations Management
Name
Academic Institution

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Operations Management
Every single company has strategies and modalities on how its activities are run and how
they can be used in achieving the set company objectives (Piercy, 2012). Usually, the business
process involves developing and controlling the entire operations process. Operations
management is a subject that is charged with ensuring the design and administration of business
processes are efficient and effective (Harvey, Heineke & Lewis, 2016). The main aim of
operations management is to minimize on the resources used and at the same time ensuring the
needs of the consumers are met.
General Electric (GE) is a transnational corporation that was founded in 1982 and focuses
on digital industrial products. The company’s headquarter is in Boston New York and houses
numerous operational segments which include: oil and gas, healthcare, renewable energy,
transportation, aviation, power, and energy connections and lighting ("GE | Imagination at
Work", 2018). All the mentioned segments under General Electric Company are independent and
therefore function as constituent businesses. In addition, the company treats honesty and
compliance as priority and core values in its operations ("GE | Imagination at Work", 2018).
General Electric has been in existence for a very long time and therefore has a formidable
reputation in the business world.
Type of Operations in General Electric
The operational nature of General Electric is primarily a manufacturing kind of business
since the company converts various inputs into finished products. For instance in the aviation
industry which is a sub-businesses in GE, the company specializes in the manufacture of aircraft
engines and their spare parts. The division which is named GE Aviation produces engine
supplies for commercial airplanes ("GE | Imagination at Work", 2018). Another important

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division in the corporation is the GE Healthcare which specializes in the manufacture of imaging
devices. Healthcare facilities need such equipment when conducting various diagnosis and tests.
GE Healthcare leads in manufacturing radiopharmaceuticals that assist in the patient imaging
process.
The other major division is the General Electric renewable energy division. This business
operations segment focuses on the various sources of renewable energy such as wind, water, and
the sun. The company actively supplies these forms of energy to interested consumers. The
division’s headquarter is based in Paris, France and is managed by an executive officer. GE
Capital is the other division that subscribes to General Electric ("GE | Imagination at Work",
2018). This subsidiary’s principal aim is to provide various financial services through lending
and leasing of funds and resources.
Supply Chain Management
A chain symbolizes a connection and flow of materials and so is supply chain
management which works on the flow of goods or services ("Understanding operations
management", 2018). Essentially, Supply chain management (SCM) focuses on the direct
movement of the finished products from the point of manufacture to the consumption area
(Andriotis, 2018). Also, the inventory of these end products is critically kept and followed
through the entire process of supply chain management.
Supply chain management is a very integral part of the General Electric Company which
is one of the senior companies globally. Since GE is a multinational company and has various
divisions and subsidiary operations the supply chain management in the company is quite
complex. GE’s supply chain management is multiplex in the context that the subsidiaries
function independently and yet the profits earned have to be channeled towards one direction.

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Currently, General Electric has streamlined operations management which includes the
supply chain management process. The company’s SCE is designed to increase the revenues and
minimize the input costs. Furthermore, the corporation has reduced paperwork in the inventory
and records keeping department. The inventory is reduced to make operations more clear and
seamless for those in charge (Theme, 2018). Presently, the additive industry is being given more
attention as the company has faith that this particular product holds the future of the
manufacturing industry.
The supply chain management structure of General Electric is in a top-down type of
management style. This traditional management structure means that the upper-level
management plays a significant role in the success of GE’s supply chain management (Reimann
& Ketchen, 2017). The top-down structure not only enhances clarity but is also a strategy for
reducing the inventory. The supply chain management of the General Electric Company is
immaculate due to the precision and the organization of the entire operations structure.
Process Design
In a company, a process is an act of translating raw products into useful end products and
services ("Special Issue of Production and Operations Management on Marketing and Operations
Management Interfaces and Coordination", 2013). The design, on the other hand, is the art of
developing the product and planning how useful it will be to the consumers and how much the
good is likely to bring back to the company. Products and processes are interconnected, and the
nature of the process is entirely determined by the details and elements of a product (Forza,
Salvador & Rungtusanatham, 2015). Likewise, General Electric’s process design widely relies
on the goods produced. GE is a manufacturing business operation, and so a lot of emphases is
placed on the design of the products. Customers need products that are of good quality, reliable,

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inexpensive and pleasing to the eyes (De Toni & Zipponi, 2011). All these ought to be factored
in during the products and process design.
The company has employed a strategy known as the Six Sigma which is meant to
produce goods of pure quality appealing to their customers. The Six Sigma design process has
six main components (What is Six Sigma?, 2018). The first component pays attention to quality
and demands that during the product and process design the specific attributes critical to the
customer are fully integrated. The second element is on the defects involved during the
designing process. This feature is meant to avoid the flaws that may arise during product
development. Thirdly, the process capability is a concept that tests what the design process can
achieve. It is also important to measure the customers’ satisfaction and therefore the variation
concept is used to calculate the progress (What is Six Sigma?, 2018). The fifth element stable
operations which ensure consistency in all the involved processes to ensure consumers are
satisfied. Finally, the design element brings together all the mentioned concepts that will
develop a viable product in the eyes of consumers.
Challenges of Supply Chain Management
The supply chain has become complicated due to numerous factors. Customers are in
need of technologically current and innovative. This overwhelming demand from the consumers
creates a challenge to multinational companies as it is hectic to strike a balance between cost-
effectiveness and responding to the demands (Berrios, 2014). Inevitably, these challenges hinder
the entire progress of a company.
Senior companies find it a challenge to cut the costs of the supply chain process (Gold,
Trautrims & Trodd, 2015). To avoid this situation, companies have opted to transfer their

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manufacturing centers to low-cost nations. However, this has made it more complicated for the
supply chain process as there are time and communication barriers between time zones.
Secondly, cost control is a serious barrier to effective supply chain management. The
energy costs and that of technology have grown stupendously making it difficult for companies
to complete the manufacturing process comfortably. Additionally, the labor rates and the
increasing number of customers have made it difficult for corporations to reduce the input costs.
Cost control is a very integral part of SCM without it the company might collapse.
The other serious problem facing supply chain management in transnational companies is
the supplier relationship management. Most multinational companies develop a partnership with
other supplier companies to minimize labor costs and transfer risks. However, this step might act
to a company’s disadvantage when the strategies of the two companies are not in line. Having
controversial methods contributes a lot of time and resource wastage.
Solutions to Supply Chain Management Problems
Every challenge has a countermeasure and the same applies to supply chain issues. One,
to avoid the problem caused by increased customer needs can be solved through extensive
research (Melnyk, Narasimhan & DeCampos, 2013). It is essential that companies collect
adequate customer needs information. The collected data and analysis of the same will aid in
identify the specific needs of customers and hence satisfying them. Technology reduces the
workload and thus increased profits. Secondly, the supplier partnership challenge can be handled
by developing an open working relationship. Both parties should be flexible, and device means
of incorporating their strategies with their respective goals. Finally, the subject of globalization
should be treated with caution. The manufacturing centers should be placed in strategic countries
and plans be made to ensure there no supply and delivery delays due to time zone difference.

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Operations management is a very critical part of a company and a crucial determining
factor in the success of the company. General Electric is a manufacturing business operation and
has well laid down structures to ensure all departments and divisions are given equal attention.
Operations include all aspects in a company from production to distribution of goods. Therefore,
efficient management of the same is equal to the success of the company’s objectives. Similarly,
supply chain management ensures the manufactured products are distributed effectively to
consumers.

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