According to GE sustainability is defined as process of aligning the business strategies to meet wide range of societal needs, reducing environmental impact and aid society developments. As of 2016, GE was investing ana average of $1 billion worldwide for employee development. It was also voted for 11th times as one of the world’s ethical companies (GE, n.d.). It had also carried about 26500 supplier assessment top ensure they deliver quality products (GE, n.d.). in 2016 alone the company invested about $4.9 billion in green research and development programs (GE, n.d.). Despite good sustainability initiative GE has suffered several challenges, but they are responding to them adequately to keep sustainability drive alive.
In 2019, GE recalled some of its turbofan engines designed to power 777X jets (HEMMERDINGER, 2019). The reason for recall was to address compressor issues. Sustainability includes factors such as durability so that the product does not end up being environmental hazard quickly. Durability also helps to reduce pollution since, in case of failed engines, other environmental challenges such as fires are imminent (Business, n.d.). other challenges that the company has faced include being scraped from elite Dow Jones index. The main reason, as described for removal, includes unexpected future risks from industrial company as its stock continued to drop (Shell, 2018). Another challenge experienced in the last 5 years is increasing in tariffs as a result of trade war. GE sources about $2.9 billion worth of goods from China annually, and it is estimated due to trader war, the company is likely to experience about $400 million cost surge (Scott, 2019). The company also has experienced loss of sell due to ripple effect of grounding Boeing MAX planes due to manufacturing error (Sheetz, 2019). It is estimated that the company has lost $1.4 billion (Sheetz, 2019). Therefore, in the last 5 years the company has had challenges regarding quality control, procurement due to trade war, and sales du to grounding of Boeing MAX planes. Regarding ripple effecting of grounding MAX planes, GE together with Boeing are practicing waiting game for regulators to approve the jet for business again (Al Root, 2019). The company has also recalled its engines for 777x, and they are redesigning them to ensure they meet the quality standards expected (HEMMERDINGER, 2019). To control the tariff the company has gone ahead with plan to diversify its suppliers' location (GE, n.d.). according to Hill (2017) logistic strategy has five components, including outsourcing, logistic system, competitors' transportation, and strategy review. GE uses mostly road and sea transportation to move its goods in different locations across the globe. The transport method used uses modern tracking technology to ensure the good reach intended destination on time and in right shape (GE, n.d.). GE is one of the pioneer companies in outsourcing ad mostly. They outsourced their IT segment to India. However in 2017, the company began to reduce its outsourcing budget with the aim of improving intellectual property and reduce the budget from $1.1 billion to $113 million dollars (Ryan, 2019). In 2018, the company introduced port optimizer technology. The technology was fostered to improve visibility and response. It was also found that port optimizer will aid planning and make supply chain reliable (Campanelli, 2018). Having a good outsourcing strategy, a better logistic system, and well-coordinated transport system has always been a competitive advantage for GE evident from their ever-developing logistic systems and strategies.
GE makes a wide range of products. some of the sustainability issues concerning GE include production of efficient products such as engines that are efficient in terms of fuel consumption and emission of greenhouse gases (GE, n.d.). now government is setting up regulations with the aim of cutting down waste. Among major waste include emission of greenhouses gases, which is a result of using fossil fuel (Eltayeb and Zailani, 2014). Therefore, in future GE products are most likely to be subjected to rigorous restriction which will set minimum limit for what they can use what level of waste they can produce. It is now evident with car industry were electric cars are being incentive and diesel cars being faced out (Rahim, 2019). The next step will be jets.
GE businesses have always focused on sustainability. The company logistics uses the most recent technologies to ensure the good meets its intended purpose. GE also spend millions of dollars every year to ensure their employee continue to learn and also to ensure their products receive a green touch. Some of the challenges that company faced that made them find it difficult to meet sustainability goals include USA-China trade war, MAX plane grounding, and quality issues.
References
Al Root. (2019). GE Raises Hope on Boeing’s Grounded Jet at Paris Air Show. Retrieved 16 November 2019, from https://www.barrons.com/articles/ge-raises-hope-on-boeing-737-max-grounded-jet-51560871895
Business. Designing sustainable products. Retrieved 16 November 2019, from https://www.business.vic.gov.au/marketing-and-sales/sustainable-business/designing-sustainable-products
Campanelli, D. (2018). GE Transportation Port Optimizer Technology Pilot Project Demonstrates Efficiency Improvements at Port of Long Beach | GETransportation. Retrieved 16 November 2019, from http://www.getransportation.com/ge-transportation-port-optimizer-technology-pilot-project-demonstrates-efficiency-improvements-port
Eltayeb, T., & Zailani, S. (2014). Going Green through Green Supply Chain Initiatives Toward Environmental Sustainability. Operations And Supply Chain Management: An International Journal, 93. doi: 10.31387/oscm040019
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HEMMERDINGER, J. (2019). GE recalls 777X turbofans to address compressor issue amid scramble to minimise 777X delays. Retrieved 16 November 2019, from https://www.flightglobal.com/news/articles/ge-recalls-777x-turbofans-to-address-compressor-issu-460379/
Hill, K. (2017). Building an Effective Logistics Strategy - Global Trade Magazine. Retrieved 16 November 2019, from https://www.globaltrademag.com/building-effective-logistics-strategy/
Rahim, Z. (2019). City could become first in UK to completely ban diesel cars. Retrieved 16 November 2019, from https://www.independent.co.uk/environment/bristol-diesel-car-ban-city-council-emissions-clean-air-zone-a9175966.html
Ryan, G. (2019). GE makes major overhaul to $1B IT outsourcing program. Retrieved 16 November 2019, from https://www.bizjournals.com/boston/news/2017/08/23/ge-makes-major-overhaul-to-1b-it-outsourcing.html
Ryan, G. (2019). GE makes major overhaul to $1B IT outsourcing program. Retrieved 16 November 2019, from https://www.bizjournals.com/boston/news/2017/08/23/ge-makes-major-overhaul-to-1b-it-outsourcing.html
Scott, A. (2019). GE CEO says China tariffs' 'gross cost' could be $400 million. Retrieved 16 November 2019, from https://www.reuters.com/article/us-ge-results-ceo/ge-ceo-says-china-tariffs-gross-cost-could-be-400-million-idUSKBN1KA1YH
Sheetz, M. (2019). GE to lose $1.4 billion this year from Boeing 737 Max grounding but expects jet's return. Retrieved 16 November 2019, from https://www.cnbc.com/2019/10/30/ge-boeing-737-max-is-big-headwind-but-banking-on-jets-return-2020.html
Shell, A. (2018). GE, original member of Dow, booted from index; replaced with Walgreens Boots Alliance. Retrieved 16 November 2019, from https://www.usatoday.com/story/money/2018/06/19/ge-removed-dow-jones-industrial-average/715985002/
