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![Page 1: Oral Presentation on the outsourcing topic in Supply Chain Management module. Presented by: Andre Bina Possatto Professor: Alexa Kirkaldy IN.](https://reader035.fdocuments.us/reader035/viewer/2022062806/5697bf991a28abf838c91969/html5/thumbnails/1.jpg)
Outsourcing in GE AppliancesOral Presentation on the outsourcing topic in Supply Chain Management module.Presented by: Andre Bina PossattoProfessor: Alexa Kirkaldy
IN
![Page 2: Oral Presentation on the outsourcing topic in Supply Chain Management module. Presented by: Andre Bina Possatto Professor: Alexa Kirkaldy IN.](https://reader035.fdocuments.us/reader035/viewer/2022062806/5697bf991a28abf838c91969/html5/thumbnails/2.jpg)
GE and GE Appliances
GE GE Appliances
Created in 1892 by a merging[1]. Manufactures a big range of
different kinds of electric products[2].
8th in Fortune’s 500 list of biggest American companies[3].
Started manufacturing in other countries around 30 years ago trying to make the business more profitable. Used both joint ventures and outsourcing to emerging markets[4].
Grew due to demand for appliance products in the economic expansion of the 1950’s[5].
Based on Appliance Park, Kentucky. Decline of the site after numerous
outsourcings, leaving many of the assembly lines unused for years[4, 5].
Considered selling the business in 2008[4, 5].
Now a symbol of America’s manufacturing renaissance and insourcing. But how?
![Page 3: Oral Presentation on the outsourcing topic in Supply Chain Management module. Presented by: Andre Bina Possatto Professor: Alexa Kirkaldy IN.](https://reader035.fdocuments.us/reader035/viewer/2022062806/5697bf991a28abf838c91969/html5/thumbnails/3.jpg)
Recent movement that consists in taking outsourced parts of the supply chain back to the company’s ownership.
“The reversal of outsourcing, transfers jobs from a domestic or foreign contractor or supplier to the internal operations of a business”[6].
Different from reshoring: “Viewed as the reversal of outsourcing and includes transferring operations from a foreign location (a company’s resident global operations or a third-party contractor) back to the country of origin”[6]. But…
In a lot of the cases insourcing and reshoring come together, attaching both of then to the same trend.
Introduction to Insourcing
![Page 4: Oral Presentation on the outsourcing topic in Supply Chain Management module. Presented by: Andre Bina Possatto Professor: Alexa Kirkaldy IN.](https://reader035.fdocuments.us/reader035/viewer/2022062806/5697bf991a28abf838c91969/html5/thumbnails/4.jpg)
Wages and oil prices Basically all the risks of outsourcing in the literature. Difficult to inovate in process and products when design
and manufacturing are oceans apart[4]. Hidden costs[12].
Main Drivers to insourcing
![Page 5: Oral Presentation on the outsourcing topic in Supply Chain Management module. Presented by: Andre Bina Possatto Professor: Alexa Kirkaldy IN.](https://reader035.fdocuments.us/reader035/viewer/2022062806/5697bf991a28abf838c91969/html5/thumbnails/5.jpg)
From an attempt of selling to $1 billion in investment ($800 million in Appliances Park). Why?
Insourcing at GE Appliances: Why
Strenghts:-Investment capacity-Innovation tradition
Weakness:-The size makes it slow-Work force was not skilled at that time
Opportunities:-Vacant facilities-State incentives in the US-American Universities and skilled work force avaliable
Threats:-Old suppliers-High costs in Asia-Trend shifts
SWOT of GE Appliances
![Page 6: Oral Presentation on the outsourcing topic in Supply Chain Management module. Presented by: Andre Bina Possatto Professor: Alexa Kirkaldy IN.](https://reader035.fdocuments.us/reader035/viewer/2022062806/5697bf991a28abf838c91969/html5/thumbnails/6.jpg)
60% less inventory[4]. 68% reduction in production
lead-time[4]. Labor efficiency improved by
30%[4]. Redesign of all appliance
products[14]. Total cost of ownership smaller
than in China[14].
Insourcing at GE Appliances: How and results
Uses more technology.
Lean approach to
manufacturing.
Few well trained
employees can work
better and innovate.
Team mentality
and ownership
Colaboration with unions.
![Page 7: Oral Presentation on the outsourcing topic in Supply Chain Management module. Presented by: Andre Bina Possatto Professor: Alexa Kirkaldy IN.](https://reader035.fdocuments.us/reader035/viewer/2022062806/5697bf991a28abf838c91969/html5/thumbnails/7.jpg)
[1] http://www.ge.com/about-us/history/1878-1904 acessed in 18/11/2013 at 17:30.
[2] http://www.ge.com/products/ acessed in 18/11/2013 at 17:34. [3]http://money.cnn.com/magazines/fortune/fortune500/?
iid=F500_sp_toprr acessed in 15/11/2013 at 02:42. [4]Immelt, J. R., The CEO of General Electric on sparking an
American manufacturing renewal, Harvard Business Review, 43-46, March 2012.
[5]Power, Brad, Insourcing at GE: The real history, Harvard Business Review Blog Network, 2013. Avaliable in: http://blogs.hbr.org/2013/07/insourcing-at-ge-the-real-stor/ acessed in 15/11/2013 at 3:42.
References
![Page 8: Oral Presentation on the outsourcing topic in Supply Chain Management module. Presented by: Andre Bina Possatto Professor: Alexa Kirkaldy IN.](https://reader035.fdocuments.us/reader035/viewer/2022062806/5697bf991a28abf838c91969/html5/thumbnails/8.jpg)
[6]Burton, T. T., Outsourcing revisited, Industrial engineer, 34-39 May 2013.
[7]http://www.clb.org.hk/en/content/wages-china acessed in 15/11/2013 at 03:12.
[8]http://www.forbes.com/sites/billconerly/2013/05/01/oil-price-forecast-for-2013-2014-falling-prices/
[9]http://www.china.org.cn/opinion/2012-02/13/content_24624457.htm acessed in 15/11/2013 at 02 53.
[10] http://rupabose.com/2010/10/25/asia-upward-wage-pressure/ acessed in 15/11/2013 at 04:21.
References
![Page 9: Oral Presentation on the outsourcing topic in Supply Chain Management module. Presented by: Andre Bina Possatto Professor: Alexa Kirkaldy IN.](https://reader035.fdocuments.us/reader035/viewer/2022062806/5697bf991a28abf838c91969/html5/thumbnails/9.jpg)
[11]Goel, A. K., Moussavi, N., Srivastsan, V. N., Time to rethink offshoring?, McKinsey Quaterly, 4, 108-111, 2008.
[12]Porter, M. E. and Rivkin, J. W., Choosing the United States, Harvard Business Review, 80-93, March 2012.
[13]Vitasek, K., Ledyard, M. and Manrodt, K., Vested outsourcing: five rules that will transform outsourcing, 1st
edition Palgrave Macmillan, New York, 2010. [14]Moser, H., Manufacturing, Economic Development journal,
12, 5-12, 2013. [15]Alini, Erica, Assembly Line Renaissance, Maclean's, Vol.
124 Issue 29/30, 54-54, 8/8/2011.
References
![Page 10: Oral Presentation on the outsourcing topic in Supply Chain Management module. Presented by: Andre Bina Possatto Professor: Alexa Kirkaldy IN.](https://reader035.fdocuments.us/reader035/viewer/2022062806/5697bf991a28abf838c91969/html5/thumbnails/10.jpg)
[16] http://www.bloomberg.com/news/2013-05-14/ge-s-last-consumer-stand-gets-1-billion-plus-new-chief.html acessed in 19/11/2013 at 10:04.
References
![Page 11: Oral Presentation on the outsourcing topic in Supply Chain Management module. Presented by: Andre Bina Possatto Professor: Alexa Kirkaldy IN.](https://reader035.fdocuments.us/reader035/viewer/2022062806/5697bf991a28abf838c91969/html5/thumbnails/11.jpg)
Thank you for the Attention! Questions?
![Page 12: Oral Presentation on the outsourcing topic in Supply Chain Management module. Presented by: Andre Bina Possatto Professor: Alexa Kirkaldy IN.](https://reader035.fdocuments.us/reader035/viewer/2022062806/5697bf991a28abf838c91969/html5/thumbnails/12.jpg)
EXTRA! Profit Appliances: 316 million$ Revenue: 8b$ (4% profit margin) Last link tot he consumer. Brand equity.
![Page 13: Oral Presentation on the outsourcing topic in Supply Chain Management module. Presented by: Andre Bina Possatto Professor: Alexa Kirkaldy IN.](https://reader035.fdocuments.us/reader035/viewer/2022062806/5697bf991a28abf838c91969/html5/thumbnails/13.jpg)
GE and GE Appliances
GE GE Appliances
Created in 1892 by a merging[1]. Manufactures a big range of
different kinds of electric products[2].
8th in Fortune’s 500 list of biggest American companies[3].
Started manufacturing in other countries around 30 years ago trying to make the business more profitable. Used both joint ventures and outsourcing to emerging markets[4].
Grew due to demand for appliance products in the economic expansion of the 1950’s[5].
Based on Appliance Park, Kentucky. Decline of the site after numerous
outsourcings, leaving many of the assembly lines unused for years[4, 5].
Considered selling the business in 2008[4, 5].
Now a symbol of America’s manufactruing renaissance and insourcing. But why?
![Page 14: Oral Presentation on the outsourcing topic in Supply Chain Management module. Presented by: Andre Bina Possatto Professor: Alexa Kirkaldy IN.](https://reader035.fdocuments.us/reader035/viewer/2022062806/5697bf991a28abf838c91969/html5/thumbnails/14.jpg)
Recent movement that consists in taking outsourced parts of the supply chain back to the companies ownership.
“The reversal of outsourcing, transfers jobs from a domestic or foreign contractor or supplier to the internal operations of a business”[6].
Different from reshoring: “Viewed as the reversal of outsourcing and includes transferring operations from a foreign location (a company’s resident global operations or a third-party contractor) back to the country of origin”[6]. But…
In a lot of the cases insourcing and reshoring come together, attaching both of then to the same trend.
Introduction to Insourcing
![Page 15: Oral Presentation on the outsourcing topic in Supply Chain Management module. Presented by: Andre Bina Possatto Professor: Alexa Kirkaldy IN.](https://reader035.fdocuments.us/reader035/viewer/2022062806/5697bf991a28abf838c91969/html5/thumbnails/15.jpg)
Main Drivers to insourcing (1)
Wages[7] Oil Prices[8]
![Page 16: Oral Presentation on the outsourcing topic in Supply Chain Management module. Presented by: Andre Bina Possatto Professor: Alexa Kirkaldy IN.](https://reader035.fdocuments.us/reader035/viewer/2022062806/5697bf991a28abf838c91969/html5/thumbnails/16.jpg)
Basically all the risks of outsourcing already discussed in the literature.
Difficult to inovate in process and products when design and manufacturing are oceans apart[4].
Hidden costs[12].
Main Drivers to insourcing (2)
![Page 17: Oral Presentation on the outsourcing topic in Supply Chain Management module. Presented by: Andre Bina Possatto Professor: Alexa Kirkaldy IN.](https://reader035.fdocuments.us/reader035/viewer/2022062806/5697bf991a28abf838c91969/html5/thumbnails/17.jpg)
Hidden Costs
![Page 18: Oral Presentation on the outsourcing topic in Supply Chain Management module. Presented by: Andre Bina Possatto Professor: Alexa Kirkaldy IN.](https://reader035.fdocuments.us/reader035/viewer/2022062806/5697bf991a28abf838c91969/html5/thumbnails/18.jpg)
Other companies: Catterpillar, Apple, Ford, New Call Tellecon[14, 15]...
Companies
![Page 19: Oral Presentation on the outsourcing topic in Supply Chain Management module. Presented by: Andre Bina Possatto Professor: Alexa Kirkaldy IN.](https://reader035.fdocuments.us/reader035/viewer/2022062806/5697bf991a28abf838c91969/html5/thumbnails/19.jpg)
Created in 1892 by the merging of Edison General Electric Company and the Thomson-Houston Company [1].
Manufactures a lot of different kinds of electrical product, from lamps to turbines[2].
8th in Fortune’s 500 list of biggest American companies with a gross revenue of 146, 9 bU$ and profit of 13,641 bU$[3].
Started manufacturing in other countries around 30 years ago trying to make the business more profitable. Used both joint ventures and outsourcing to emerging markets[4].
GE: history and outsourcing
![Page 20: Oral Presentation on the outsourcing topic in Supply Chain Management module. Presented by: Andre Bina Possatto Professor: Alexa Kirkaldy IN.](https://reader035.fdocuments.us/reader035/viewer/2022062806/5697bf991a28abf838c91969/html5/thumbnails/20.jpg)
Demand for appliance products in the economic expansion after World War II[5].
Used to be based on Appliance Park, Kentucky. The site had peaked with more than 20.000 employees in early 1970’s[5].
Decline of the site after numerous outsourcings, leaving many of the assembly lines unused for years[4, 5].
Considered selling the business in 2008[5]. Now a symbol of America’s manufactruing renaissance and
insourcing. But why?
GE Appliances
![Page 21: Oral Presentation on the outsourcing topic in Supply Chain Management module. Presented by: Andre Bina Possatto Professor: Alexa Kirkaldy IN.](https://reader035.fdocuments.us/reader035/viewer/2022062806/5697bf991a28abf838c91969/html5/thumbnails/21.jpg)
GE and GE Appliances Insourcing Main drivers to insourcing Insourcing at General Electric References Questions and answers
Contents