HANOI: The US industrial and manufacturing giant General Electric Co (GE) suggests that innovation and digitalisation may be the only key to large corporations’ survival and relevance moving forward.
The 130-year-old company, which has reinvented itself since establishment, warns that large companies would risk losing competitiveness and becoming obsolete if they stick to traditional business processes or products.
GE Asia Pacific president and chief executive officer Wouter Van Wersch said without innovation, less agile businesses will be pushed off to the back burner.
“Innovation is a must. If you don’t stay on top of the competition, you are going to struggle.
“We are basically in every country, so we can’t grow any longer. Innovation is the key. Without it, one would lose competitiveness,” he told a group of Asean journalists invited to visit its Brilliant Factory in Vietnam’s Hai Phong recently.
“That is what GE is doing (by way of innovation and digitalisation) as we want to be one step ahead of the competition,” he added.
The warning, general and indirect, came at the right time especially for Malaysian business giants as competition and updated regulatory requirements now have shown to be more profound in disrupting traditional business processes.
Malaysia heading towards new regulatory change in the power sector as well as cheaper and high speed broadband, for example, have affected the country’s long-established companies in doing business. This is evident with their profit margins impacted by the changes.
Wouter said the factory in Hai Phong, which exports around the world primarily wind-turbine generators and electrical-control-systems components for renewable energy sector, serves as a good example of the firm’s innovations.
“It is one of GE’s five factories in the world to be tagged as a Brilliant Factory, showcasing advance manufacturing technology and digital efficiency.
“By optimising the manufacturing processes, the Hai Phong Brilliant Factory will save up to 50 per cent of the product lead time and reduce inventory by about 20 per cent while the productivity will be boosted by up to 20 per cent,” he said.
After almost 10 years of operations, Wouter said Hai Phong multimodal factory has produced and exported more than 6,000 units of generator system to date and reached more than US$1 billion annual exports.
“The site counts about 1,000 employees and is expanding its local and well-trained workforce to more than 1,500 employees in response to the growing global demand for renewable energies globally,” he added.
In Asia Pacific, GE has presence in 15 countries with a total 16,000 employees, and 23 manufacturing sites, two of which are Brilliant Factories. Other than Hai Phong, another Brilliant Factory is located in Hino, Japan focusing on healthcare.
GE’s long history of innovation started in the 1800s with the creation of the first electric light bulb. Over the years, GE continued to innovate in many fields, such as inventing the first US jet engine for commercial aviation in 1946 – developed the axial flow compressor, which is being used in every modern jet engine and gas turbine today.
Then in 1976, GE made a breakthrough in healthcare technology as the invention of a “rotate-only” CT scanner was introduced, making it the world’s first.
In recent times, GE made significant developments in technology, such as Vscan, a pocket-sized ultrasound designed for primary healthcare workers in low-resource regions; Predix, the first-ever operating platform for industrial data and analytics; and the highly-efficient HA Gas turbines, which recently won a Guinness World Record for efficiency.
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