GE Aviation:

2013 Bundle Case Competition GROUP 5 Sevana Melikian Alex Caruso Sanjana Kishore Yin Jin Levi Lundgreen Nicholas Born

December 10th, 2013

P R E S E N TAT I O N O V E R V I E W

0 1 Aerospace Industry Landscape 0 2 The Challenge 0 3 Our Approach 0 4 Our Proposed Solution:

The Knowledge Concierge 0 5 Q&A

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G R O W T H Global Aerospace & defense market valued at $910 billion, grew at 6.8% in 2012. Defence sector shrinking, while commercial segment continues to grow

G L O B A L I Z A T I O N Greater focus on international markets like Asia & Middle East as US revenues decline

T A L E N T Steady loss of experienced personnel and need to attract highly skilled talent

I N N O V A T I O N Biggest business priority being cost, efficiency, reliability & safety

R E G U L A T O R Y Strict governmental guidelines for security & compliance will continue

AEROSPACE INDUSTRY LANDSCAPE

A T A G L A N C E :

Source: Air Transport Action Group (2012)

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THE CHALLENGE

W h o h a s t h e k n o w l e d g e w i t h i n G E A v i a t i o n ? W h o n e e d s t h e k n o w l e d g e ? H o w d o w e t r a n s f e r t h e k n o w l e d g e ?

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OUR APPROACH

§  Catering to Millennials •  Information on demand •  Technology •  Ease of Use & Accessibility

§  Avoiding duplication of effort •  Using information already in

existence §  Measurable & Cost Effective §  Ensure NPI commitments are met §  Create a method to share both explicit

and tacit knowledge

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OUR PROPOSED SOLUTION

The Kn wledge Concierge

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HOW IT WORKS…

   Hmm…This is not something I learning in my training. Who would know about how to approach this problem?

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HOW IT WORKS… I found my

solution!

Connect to the Web Portal

Connect to the Knowledge Concierge

Person-to-Person Connection (Who has the knowledge &

who needs it)

Specific Solution on the Web Portal

0 X 0 7

Identify the Critical Knowledge Through: •  Informational Interviews •  Design Practices Reviews •  Job Shadowing

HOW IT WORKS…

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The Traditional Engineer – Manager or Mentor Relationship

Junior Engineer

Manager or Mentor

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Junior Engineer

Knowledge Concierge

Collective Knowledge of GE Aviation

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W E B P O R TA L

SINGLE SIGN-ON LIVE CONCIERGE CONNECT CONTACT US

1 0

3-D Model Video

Blue Print

The Knowledge Concierge Web Portal Features:

•  Senior Engineer Profiles •  Design Practices

•  Currently hard to find, difficult to search, difficult to read through

•  Blogs/Discussion Boards

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T E A M S T R U C T U R E

*Headcount for pilot project in Cincinnati, OH

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PHASE I: Find Knowledge

PHASE II: Share Knowledge

PHASE III: Evaluate

PHASE IV: Begin Expansion

•  Hire staff •  Engage senior

leaders and build credibility

•  Start work on virtual portal

•  Timing: Pre-launch (3-6 months)

•  Soft launch of the KC •  Test with subset of

population •  Make changes/edits

as necessary •  Timing: At 6-month

mark •  Official launch of

Knowledge Concierge

•  Marketing and communications

•  Timing: At Year 1 mark

I M P L E N TAT I O N T I M E L I N E

•  Measure ROI (reduction in rework, reduction training, reduction in errors)

•  Revise model as necessary

•  Regular surveys •  Make changes as

necessary •  Timing: Every 6 months

for 2 years

•  Launch satellite offices (domestic and international)

•  Establish Cincinnati as official hub

•  Timing: Years 2 through 5

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Knowledge Concierge Pilot Site: Cincinnati, OH

G E A v i a t i o n E n g i n e e r i n g

PHASE I: Find Knowledge

PHASE II: Share Knowledge

PHASE III: Evaluate

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Knowledge Concierge Hub: Cincinnati, OH

Mexico

UK

Poland

Turkey

India

China

G E A v i a t i o n E n g i n e e r i n g

PHASE I: Find Knowledge

PHASE II: Share Knowledge

PHASE III: Evaluate

PHASE IV: Begin Expansion

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Leadership •  Authentic support from leadership

throughout the entire process •  Early adoption of new operating

procedures •  Relate improvement to culture

Communication •  Start as soon as possible •  Create a sense of openness around

procedures •  Define the why? •  Sincerely engage all levels in shaping

communication plan

Redefine Operating Norms •  Incorporating knowledge to G&O’s •  Reward behaviors at first •  Monitor Progress •  Empower employees

CHANGE MANAGEMENT NECESSARY

The Change Acceleration Process

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NPV Analysis

Calculated IRR = 51% >

GE’s WACC = 6.35%

FINANCIAL ANALYSIS

Year 1 Year 2 Year 3 Year 4 Year 5 Labor Costs $(1,485,000) $(1,485,000) $(1,485,000) $(2,565,000) $(2,565,000) Tech Costs $(60,000) $(60,000) $(60,000) $(60,000) $(60,000) Admin & Misc. Costs $(140,000) $(140,000) $(140,000) $(140,000) $(140,000) Benefits (Senior Employees) $(600,000) $- $600,000 $600,000 $600,000 Benefits (Junior Employees) $- $2,400,000 $3,600,000 $3,600,000 $3,600,000 Net Benefits $(2,285,000) $715,000 $2,515,000 $1,435,000 $1,435,000 NPV $(2,148,566) $(1,516,400) $574,462 $1,696,228 $2,751,014

NPV > 0 by Year 3

NPV

($)

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The Knowledge Concierge: Overview

T h e K n o w l e d g e H i e r a r c h y ( D I K W )

EFFECTIVE KNOWLEDGE

MANAGEMENT

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Thank You! Q&A

Extra Special Thank You To:

Heather Porzuczek

Larry Caruso

Scott Blosser

Jay Ramachandran

Ravi Ravikumar