GE Global Sourcing : The Human Factor: Removing Costs from Global Business


  • 5
  • November 15, 2013
  • David Lapin

Case Study Details

The Company: GE Global Sourcing

In his inimitable way, Jack Welch would often shoot directives to his executives designed to innovatively drive down the costs of doing business. One such directive was so dichotomous that it kept senior GE executives awake at night: In an effort to reduce the costs of raw materials, Welch instructed his global sourcing to substantially increase its purchasing of raw materials from developing countries. The challenge to the executives was to do this without compromising GE's relentless focus on quality and speed. With difficulties regarding communication and standards of quality and efficiency, Global Sourcing found that the price-saving was not justifying the indirect costs of doing business with developing countries. They called in Lapin International (formerly SBE).

Lapin International shared its proprietary Three Culture ModelTM in workshops with GE Global Sourcing Leaders at Head Office and with Pacific Rim Sourcing Leaders in China. These workshops were designed to help leaders build trust and improve communication across cultures in the hope that this would significantly impact costs. Leaders learned new ways of negotiating, contracting, communicating, and setting standards and objectives across global cultural boundaries. Areas of fractured trust between the operations in various countries were identified and repaired.

The result was considerable cost saving and efficiency gains in GE's Global Sourcing.