GE: A Company-Wide Push for Excellence

No company is more obsessed with quality than General Electric Co. Under the leadership of Chairman and Chief Executive Officer Jack Welch, GE has pushed relentlessly for improvements at all of its business units. It is one of the chief adherents of Six Sigma, a rigorous quality program which tolerates only the most infinitesimal rate of performance defects.

GE has taken that same aggressive philosophy to sourcing product in Mexico. Two years ago, it began searching for quality carriers that could participate in a company-wide transportation program linking Mexico with the U.S. The long-term strategy was to bring Canada into the picture as well, allowing GE to deal with a minimal number of reliable providers for all of North America.

That in itself was unusual. Beyond the customary corporate dicta about goal-setting and customer service, GE has granted its business units a high degree of autonomy, especially in the areas of logistics and supply-chain management. Indeed, given the wide disparity of products and services that emanate from those sectors-household appliances, transportation equipment, lighting products, plastics, jet engines, broadcasting, financial services-it's difficult to imagine how GE could lump everything together for purposes of transportation.

In fact, GE never intended to dictate the use of one or more carriers for all of its activities in Mexico. But it did hope to promote sourcing in that country, by developing quality suppliers that could be utilized at the discretion of the relevant business units. Chuck Jakubchak, manager of transportation sourcing, was hired at the corporate level expressly for that purpose.

The name that kept popping up in Jakubchak's research was Roadway Express, Inc. The Akron, Ohio-based carrier didn't have much of a history with GE, although the two happened to be in negotiations around the time Jakubchak was conducting his search in Mexico. He chose the carrier not long after visiting Roadway's facilities in Monterrey.

One strong factor in the selection was Roadway's willingness to participate in the Six Sigma effort in Mexico. Others, according to Jakubchak, included the carrier's North American scope, technology, website, tracking and tracing capabilities, and Border Ambassador service, by which Roadway works with brokers, carriers and customs officials to expedite the movement of freight across the U.S.-Mexico border.

Roadway subsequently won the Hammer Award, bestowed by the federal government for innovative public-private partnerships. It was cited for working with government agencies and the Association of Laredo Forwarding Agents to improve the effectiveness of U.S. Customs' Automated Export Service. Roadway acted as pilot carrier, linking up to its customers via an electronic service center operated by the forwarders' association.

Given a wide array of carriers, and the freedom to choose among them, GE's business units nevertheless found themselves gravitating to Roadway, which offered uniformly fast transit, Jakubchak says. In a number of GE's Mexican operations, some of which were allowing suppliers to arrange for transportation, transit times had been slow or maddeningly inconsistent.

	Within six months, the average number of days that GE products spent in transport went from 20 to fewer than 10.

"When we came along with a plan, people started jumping on board," he says. GE business units that make extensive use of Roadway's services include tools, motors and locomotives.

The new program quickly made a difference in GE's Mexican supply chain. Within six months, the average number of days that product spent in transport went from 20 to fewer than 10, according to Bob Carr, Roadway's vice president of international. "No doubt we can take that number down even more," he says.

GE also turned to Roadway for a host of value-added features, including electronic communication of key data. The carrier worked closely with GE's suppliers and plants throughout Mexico to coordinate movements and ensure compliance. One Roadway employee was stationed full-time at the border exclusively on behalf of GE, says Carr.

Roadway also provided an intra-Mexico service that linked plants and suppliers within the country. It works with a dedicated linehaul carrier which runs domestic trailers painted in Roadway colors between Mexico City and points such as Monterrey, Guadalajara and San Luis Potosi. The result: Roadway won GE's

"Carrier of the Year" award in its first full year of serving the company.
The honor was no guarantee of continued business. Despite GE's desire to create long-term partnerships, every choice of carrier is an economic one. "We'd like to leverage GE's volumes among all the divisions," says Jakubchak, "but Roadway has to be competitive."

Roadway conducted supplier training sessions in Monterrey on such topics as proper packing and documentation. And it offered itself as a resource for GE's suppliers to call with additional questions.

As a veteran of the U.S.-Mexico trade, Roadway continues to work at moving goods over the border with a minimum of delays. Carr says the opening of a second bridge at Laredo should ease the extreme congestion that has plagued that crossing for years. The development of Customs' Automated Export System will help by dramatically reducing paperwork; electronic filings under the program increased by 9,300 percent between 1997 and 1999.

Jakubchak expects to make greater use of Roadway beyond Mexico. "The success in Monterrey and Mexico in general has caused us to really take a look at what we're doing in the U.S.," he says. "As we get more comfortable with [Roadway], we see them growing their business with us."