GE touts job redomestication through Lean Manufacturing practices

Recent debate about employment in the U.S. has been focused in large part on how to bring back jobs that have been outsourced to cheaper markets. This is a particular concern in the manufacturing sector, as companies have looked to Asia and South America for more cost-efficient workforces.

While rising labor costs in many of these markets has incited some companies to bring jobs back home to the U.S., another, less obvious strategy has also contributed to the trend: Lean manufacturing.

General Electric is a prime example of a company that has been able to either retain American jobs or bring them home because of process improvement strategies and Lean practices. Chop Blankenship, GE’s chief executive of appliances, told the Financial Times this week that its various operational improvements have not only helped retain jobs but has improved performance and bottom line returns as well.

“We have torn down functional silos and replaced them with a 'one team' mentality,” GE CEO Jeffrey Immelt told the Harvard Business Review last year. “Designers, engineers and assembly line workers together determine the best way to meet their goals; they own their own metrics. They take pride in this ownership, and the results speak for themselves.”

In 2008, GE redesigned its 25-year-old dishwasher line according to a series of Lean and Six Sigma practices. The result was a 30 percent improvement in labor efficiency, a 60 percent reduction in inventory, 68 percent less time needed to produce and 80 percent less space required, according to Technorati.

One of the core processes that contributed to these improvements was the company’s move to locate all functions related to manufacturing at the same plant. 

“This means design, quality control, engineering, production and product development are all on the same site, which makes spotting opportunities for process improvement much easier,” reports Adi Gaskell for Technorati. “When manufacturing is outsourced across the globe this closeness is much harder to achieve.”

GE’s continuous improvement efforts reflect a continuation of many of the Lean practice and Kaizen initiatives championed and advanced by Toyota in the 1980s. More importantly, as policymakers and labor advocates continue to demand the return of manufacturing jobs to the U.S., companies are likely to consider Lean Manufacturing as one of their leading options.