General Electric (GE) Operations Management: 10 Decision Areas, Productivity

General Electric Company GE, operations management, 10 strategic decisions areas, productivity, aviation business case study analysis
A General Electric YJ-93-G-3 turbojet engine. General Electric Company’s (GE) operations management strategy for the 10 decision areas addresses productivity goals in the conglomerate’s operating segments. (Photo: Public Domain)

General Electric Company (GE) maximizes productivity in the 10 decision areas of operations management through strategic technological integration. This OM approach is appropriate, considering that the company relies on digital technologies to ensure the competitiveness of its multinational business. For example, GE uses and offers digital technologies as solutions to operational issues in the aerospace industry. In operations management, the 10 strategic decisions identify the main areas of operations and specify the operating objectives for each area. In this case, General Electric applies a variety of approaches, strategies, and tactics suitable to its various industries and markets. The company’s operations managers implement industry-specific strategies and tactics, as well as generalized organization-wide policies for OM. As a major industry influencer in the global market, GE employs operations management strategies that affect markets through technological solutions provided to client firms. Pertinent to General Electric’s mission statement and vision statement, this condition puts emphasis on the significance of operations management decisions in the business and the development of its industries.

Employees use General Electric Company’s operations management strategies and tactics as signals for adjustments in individual job performance. For example, a change in GE’s productivity targets for one of the 10 strategic decision areas of operations management may affect some or all areas of operations. Thus, employees need to adjust their job activities, accordingly. While General Electric has programs for change management, operations managers are partly responsible for aligning human resource activities with changing operational targets of the global business.

GE’s Operations Management, 10 Decision Areas

1. Design of Goods and Services. The objective in this decision area of operations management is consistency in costs and quality in producing goods and services. General Electric Company’s approach gives top priority for high quality standards, while cost considerations come second. GE also uses advanced digital technologies to facilitate consistency in operations and productivity in this strategic decision area of operations management. However, because General Electric’s corporate structure (business structure) is multidivisional, operations managers apply divisional policies specific to industry type and the design of corresponding goods and services. For example, GE has different quality and cost consistency approaches between the divisions of its aviation operations and digital industrial services. Thus, high operational efficiency is achieved while ensuring the flexibility of General Electric’s global business in addressing industry-specific challenges.

2. Quality Management. In this strategic decision area of operations management, the objective is to ensure that product quality satisfies customers’ expectations. General Electric implements market research to determine such expectations. Multiple research campaigns cover the diverse market environments of GE. For example, research on customers’ quality expectations about General Electric avionic systems inform the company’s operations managers, and research in the transportation market guides operations managers in the company’s operating quality decisions. The resulting quality management guidelines align with General Electric’s generic competitive strategy and intensive growth strategies, which emphasize high quality and advanced technological features. Such guidelines facilitate operational effectiveness in meeting quality and productivity targets in GE’s business.

3. Process and Capacity Design. The objective in this decision area is to strategically align operations management with production goals, with consideration for resources. In General Electric’s case, these resources highlight technological resources and human resources, among other resources. Technologies define much of GE’s processes and production capacities. For example, the company uses digital technologies to optimize efficiency in its operations in the avionics market. Such technological emphasis at General Electric Company requires operations managers to set productivity goals through automated tools for maximizing operational efficiency. In this way, operations management for process and capacity design imposes minimal constraints on the multinational business.

4. Location Strategy. This strategic decision area of operations management deals with the physical location of facilities. In this case, the objective is to reach General Electric Company’s operational targets through optimal strategies for supply chains and target markets. The company has multiple supply chains and sales locations because of the diversity of its business operations. For example, based on General Electric’s marketing mix or 4P, the same region may have different and coexisting locations for the firm’s operating segments. In this regard, GE’s location strategy is mainly based on industry-specific operational goals. Operations managers address the unique demands of each market or industry. This condition contributes to the company’s resilience against competitive rivalry with 3M, Siemens, and other firms assessed in the Five Forces analysis of General Electric Company. GE’s locations are strategically determined based on resource accessibility and market proximity. Productivity goals vary according to industry or market.

5. Layout Design and Strategy. The strategic objective in this decision area is to apply operations management principles to optimize workflows and material flows. General Electric’s operations managers apply the principles of leanness. Lean thinking, lean manufacturing, and lean management in layout design maximize GE’s operational efficiency and productivity. For example, the company’s lean layout design in the aviation industry contributes to profit maximization through production efficiency. In addition, General Electric’s layout design and strategy support employee empowerment and innovation in the global business.

6. Job Design and Human Resources. In this decision area of operations management, the objective is to maintain an adequate and effective workforce through suitable human resource management strategies. General Electric’s organizational culture (corporate culture) plays a significant role in this area. For example, the company’s cultural support for learning and adaptation contributes to workforce capabilities for fulfilling business goals. Also, to facilitate HR development, GE has continuous improvement programs that push for productivity and innovation throughout the business organization. Operational tactics applied in this decision area affect General Electric’s corporate social responsibility strategy, which relies on human resource support through appropriate training and employee involvement.

7. Supply Chain Management. The operations management objectives in this decision area are to streamline operations for cost effectiveness and to maintain stable business partnerships with suppliers. Operating strategies applied in this area contribute to General Electric’s competitive strengths necessary for addressing competitive rivalry affecting the multinational business, as shown in the SWOT analysis of General Electric Company. To address these concerns, General Electric provides digital technologies to improve suppliers’ decision-making processes for GE’s supply chain reliability. In addition, the company’s supplier diversity program helps minimize the risk of overdependence on just one or a few suppliers. Also, operational streamlining is achieved through digital technologies that are similar to what General Electric provides to customers in the industrial services industry. In applying these strategies, operations managers consider the external trends discussed in the PESTEL/PESTLE analysis of General Electric Company. For example, based on technological trends the company’s operations management uses advanced technologies to increase its productivity.

8. Inventory Management. This strategic decision area of operations management deals with inventory control. The objective is to maintain adequate inventory for the business. General Electric Company’s operations managers use online digital tools in managing inventory. For example, the company has centralized systems for managing inventory throughout its aerospace design and manufacturing operations. These systems automate many aspects of inventory management and enable GE to increase productivity through operational efficiency. Thus, technological tools characterize General Electric’s approach in this decision area.

9. Scheduling. The objective in this strategic decision area of operations management is to achieve operating targets despite constraints on time and resources. General Electric Company has a large variety of schedules because of its operations in different markets involving the aerospace industry. Each scheduling approach considers the challenges in the corresponding operating segment of GE. For example, the scheduling policy for avionics operations addresses inventory management and productivity challenges in General Electric’s aerospace market. In addition, the company’s operations managers apply schedules based on relevant factors, like geographic characteristics and local business conditions. These variables require operational flexibility that suits the different markets, regions, and industries of General Electric’s global business.

10. Maintenance. In this strategic decision area, the objective is to maintain production quality and resource reliability. For example, operations managers are tasked with maintaining reliable technological resources that support General Electric’s multinational business. The company’s operational policies require regular monitoring and upgrades for technological resources, such as online digital systems. In addition, GE’s operations management strategy maintains productive processes through strict monitoring and control of workflows. Human resource training and product design also influence the effectiveness of the maintenance of General Electric Company’s processes.

Productivity at General Electric Company

Productivity at General Electric is evaluated using different sets of criteria or measures that represent the operating segments or divisions of the global business. For example, productivity in the digital services operating segment is measured based on the quantity and quality of services rendered to GE’s customers. General Electric’s operations management strategies in the 10 decision areas also affect the types of productivity criteria applied to support the decisions of operations managers. Considering operational variations, the following are some of the notable productivity criteria applicable in General Electric Company’s operations:

  1. Batches shipped per day (productivity of GE’s supply chain)
  2. Products delivered per day (productivity of GE distributors and sales representatives)
  3. Projects completed per quarter (productivity of General Electric’s services segments)