The Skinny on Lean: Use It or Lose It – GE Appliances and the Lean Process

What does it take to make a 100-year-old manufacturer globally competitive? That’s the question GE Appliances’ leaders asked themselves when they began applying Lean to eliminate waste during manufacturing. The vision of what Lean means to the transformation of GE Appliances has grown. From 2012 to 2014, GE is completely revitalizing  its product lines using the Lean process–a process that will cut cost and improve GE’s competitiveness. That competitiveness means more Americans at work with the creation of more than 3,000 new U.S. jobs.

Crunching numbers using Lean

GE Bottom-Freezer Refrigerators and Lean
Using Lean, the Bottom-freezer team found ways to save material and labor costs at the same time they improved quality. From operators eliminating screws with snap-together parts to using a cross-functional team to brainstorm ways to simplify assembly, GE has saved millions of dollars.

1/2: The length of the assembly line was reduced by 50 percent.
20: Lean eliminated 20 parts from just one assembly area, the vegetable pan. GE estimates they’ve eliminated more than 100 parts in the average refrigerator compared to previous models.
 The new bottom-freezer refrigerator line achieved the ENERGY STAR® rating that is 20 percent better than current guidelines for refrigerators, meeting 2014 requirements.
25%: Using Lean’s cross-functional team approach, the team brought the product to the shelf in 25 percent less time, since steps could be done concurrently rather than consecutively.
1 out of 2: Even though the new refrigerators will have more features than the previous model, the Lean team removed 50 percent of the wiring.

GE GeoSpring™ Hybrid Water Heater and Lean
From product development to production, the GeoSpring hybrid water heater is the first product GE Appliances will introduce using the Lean principles. The proof of Lean’s success within this product launch can be found in the numbers.

20%: GE eliminated one of every five parts first included in GeoSpring assembly.
25%: Lean helped reduce GeoSpring material costs by 25 percent.
30%: GE reduced equipment investment by 30 percent.
50%: The GE GeoSpring team cut its program cycle time in half.
50%: GE reduced resources to build the GeoSpring by over 50 percent.
$325: The GE team maintained the original $325 annual consumer savings on utility bills, and retaining the original 2.35 energy factor rating determined by the U.S. Department of Energy, while lowering product cost by $200.*
$8 Million: GE has saved over $8 million during GeoSpring development and production.

GE Dishwashers and Lean
In 2009, GE experimented with Lean on a dishwasher assembly line – resulting in great savings:

30%: Labor efficiency improved by 30 percent after employing Lean principles.
60%: GE reduced dishwasher inventory by 60 percent.
68%: The Dishwasher team reduced production time by 68 percent.
80%: The dishwasher production line now requires just a fifth of the space compared to pre-Lean production.

Facility Facelift: GE Appliance Park’s Transformation with Lean
As Appliance Park transforms itself to a Lean and modern manufacturing facility, the large production buildings are getting a facelift. So far, the amount of steel recycled as a result of the demolition is equal to roughly the amount of structural steel to build or equal:

  • 4 KFC Yum! Centers
  • 24 fully loaded Boeing 747s
  • 2,600 Asian elephants

Bare Bones:  Lean Background
Lean determines what customers want and are willing to pay for – then utilizes the most efficient way to create that product. In a manufacturing environment, Lean:

  • Creates efficiencies during the initial design and manufacturing processes
  • Reduces ergonomic issues for operators
  • Simplifies the entire production process
  • Continually refines product and manufacturing processes to add value for the customer
  • Eliminates waste, whether it’s time, resources or parts, during production
  • Produces better quality products
  • Reduces the need for product repairs after production
  • Saves money for manufacturer and consumer

Lean was adopted from processes developed by Henry Ford, as well as Kiichiro Toyoda, Taiichi Ohno, and others at Toyota. Visit www.lean.org/WhatsLean/ for a full history. 

The Lean Team Packs a 1-2-3 Punch

Every skill needed to build a new product is in the same room from the first day through product launch. 

  1. Co-location of the core team is key. For each product launch, there is one space dedicated to each product to include engineers, quality employees, hourly and salaried production workers, and sourcing teams.
  2. The cross-functional approach cuts product development time and involves all team members in the entire process – from design through production.
  3. Lean promotes a “One-Team” approach to problem solving.

The Basic Steps of Lean:

  1. Specify the value from the customers’ perspective.
  2. Identify all steps required to deliver the product or service to the customer.
  3. Eliminate steps that don’t create value.
  4. Create a process that flows smoothly.
  5. When it isn’t possible to flow, create a system that pulls from the upstream process.
  6. Repeat until no waste exists.

* Based on DOE test procedure and comparison of a 50-gallon standard electric tank water heater using 4879 kWh every year vs. the GeoSpring™ hybrid water heater using 1830 kWh every year.