Vivian Zhao

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Vivian Zhao eBusiness Director, GE
China September 24, 2001
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GE History

• GE traces its beginnings to Thomas A. Edison,
  who established the Edison Electric Light Company
  in 1878.
• In 1892, a merger of the Edison General Electric
  Company and the Thomson-Houston Electric Company
  created the General Electric Company.

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Dow Jones Industrial Average GE Was There, and
Still Is
Now Companies in Todays Dow Jones Industrial
Average
Then Companies in the Original Dow Jones
Industrial Average1896
American Cotton Oil American Sugar American
Tobacco Chicago Gas Distilling
Cattlefeeding General Electric Laclede
Gas National Lead North America Tennessee Coal
Iron U.S. Leather U.S. Rubber
Alcoa Intl Business Machines American
Express Intel AT T J.P. Morgan Chase Boeing
Johnson Johnson Caterpillar McDonalds Citigro
up Merk Coca Cola Microsoft DuPont Minnesota
Mining Eastman Kodak Manufacturing Exxon
Mobil Philip Morris General Electric Procter
Gamble General Motor SBC Communications Hewlett-P
ackard United Technologie HomeDepot
Wal-Mart Honeywell Walt Disney
GE was the Only Company on Both Lists When Dow
Jones Celebrated 100th Anniversary
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GE Overview
11 Operating Businesses
Aircraft Engines
Capital Services
Lighting
Industrial Systems
Power Systems
Plastics
Transportation
NBC
Medical Systems
Appliances
Global Exchange Systems
Multi-Products and Services with 130B Revenue
and 12.7B Net Income
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GE Stock Performance 1980-1997
GE ???? -1980-1997
GE Surpass DJIA and SP 500
GE ?? DJIA and SP 500

GE 3,315
GE 3,315
DJIA 1,555
DJIA 1,555
SP 500 1,300
SP 500 1,300
1980 1997
What a Shareholder can get from 100 Investment
Revised 5/98
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GE Expanding Growth Opportunity
130B
GE Revenues
12-13
70B
7
50B
6
26B
New GE Playing in a Multi-Trillion Dollar Market
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GE Growth --How Do We Accelerate It?
Driven by Operating System
Globalization
Markets Sourcing Intellect
Services
OEM Third Party High Tech
Six Sigma
Productivity Market Share Way of
Life
e-Business
E-Business Critical to Delivering in 2001 and
Beyond
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The Evolution of GE e-Business
1Q99 2Q99 3Q99 4Q99 1Q00
2Q00 3Q00

• Added e-Business as the 4th GE Initiative
• Establish New e-Business Team at Each Business
• Objective Destroy Your Business.com
• - Understand the New World
• - Benchmark Competitor Online Capabilities
• - Proactively Attack Your Own Business

1Q99 2Q99 3Q99 4Q99 1Q00
2Q00 3Q00

• Grow Your Business.com
• - Internet an Opportunity, Not Just a
  Threat
• Develop World-Class e-Channel (CWC)
• - Simple/Easy/Sticky
• - Competitive Benchmarking
• Leverage GE Brand/Capabilities
• - We Have More than Clicks , We Have
  Bricks and Fulfillment
• Make Strategic Equity Investments

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The Evolution of GE e-Business
1Q99 2Q99 3Q99 4Q99 1Q00
2Q00 3Q00

• Weekly e-Metric Tracking
• - Buy/Make/Sell
• e-Business Takeover
• - e-Biz Leaders C.O.O.
• e-Mentoring for Top Execs

1Q99 2Q99 3Q99 4Q99 1Q00
2Q00 3Q00

• Digitization
• - Huge Cost-Out Opportunity
• - Competitive Benchmarking
• Sourcing Deflation
• - e-Auctions
• Customer Migration

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GE e-Business Approach

• Web-enable processes
• Intranet/ Collaboration Tools
• Internal Wizards

e-Make
E-Metrics

• SourceBid (e-Auctions)
• Supplier Extranet (Direct)
• e-Procurement (Indirect)

• Transactions
• Value Added Services (or External Wizards)

• E-Business Suppliers
• Strategic Plays

Prioritize OpportunitiesFocus On The Objectives
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eBuy
Buy
Make
Sell
E-Auctions (40B Total Buy)
Transaction Costs (3.5 Million Transactions)
6B
Non e-Enabled
50/TX
200MM
e-Enabled
5/TX
Savings 20 12-15
Savings Potential
6B
150MM
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eBuy
Buy
Make
Sell
How to work with Suppliers-Example of GEPS
INTERNET
INTRANET
EXTRANET
GE Web-Site
Yahoo.com
GE.com
Sourcing
Customers and Suppliers with Secure Access to
GEPS Intranet via Internet
gepower.com
Project Tracking
Application Database Servers
GEPS Application Database Servers
Internet Subscriber
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Online Application
eBuy
Buy
Make
Sell
Electronic Invoicing
On-line Auctions
Supplier Scorecards
Milestone Tracking
DART Engineering Documents
E-Logistics
E-Packing List
E-Marketplace
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eBuy
E-Auction
Buy
Make
Sell
A Web Based Utility that Allows Suppliers to
Prepare and Submit Online Bids for Request for
Proposals (RFQs)

• Price Negotiation Cycle Time Reduced
  Significantly
• Simplifies Supplier Approval Process by Quickly
  Eliminating Non-competitive Suppliers
• Reduced PO Placement Cycle Time
• Standardize and Streamline the RFQ Process...
  Simplifies Proposal Evaluation - Price, Quality,
  Delivery

E-Enables the Traditional Sourcing Process
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E-Auctions Example
eBuy
Buy
Make
Sell
Fastener Auction (12/99)

• Suppliers Identified / Contacted 23
• Active Bidding (Participants) 15 Suppliers
• of Parts 20
• Total Bids 265
• Duration 33 Hours
• Savings Greater Than 80 (gt1.2 million)

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eBuy
E-Invoice
Buy
Make
Sell
An Internet-based Invoice Inquiry and Invoice
Creation and Submission Tool

• Self Service Inquiry Allows Suppliers to View
  Invoice Information and Payment Status On-line
• Web Invoices Will Have to Match the PO up Front,
  Removing 50 of the Matching Problems That Hold
  up Payment
• Invoice Will Not Have to Wait for Mailing Time
  to Arrive at Accounts Payable
• No Manual Data Entry at Accounts Payable Less
  Possibility of Error

Replacing Paper-Based Processes
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eBuy
E-Logistics
Buy
Make
Sell
Internet-based Tools Used to Request
Transportation Instructions and View Shipment
Tracking Information

• Advanced Data Input Capabilities Allows Rapid
  Input of Requests Via Web
• Freight Tracking On-line Regardless of Carrier
  Being Utilized
• Reduces Errors gt Data Feeds Directly Into
  Database
• GEPS Personnel Able to View Shipment Status
  Reports On-line Thereby Reducing GEPS Requests
  for Information
• Ensures Timely Delivery of Goods to GEPS
  Internal/external Customers

www.gepsrouting.com
Replacing Paper-Based Processes
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Scorecards
eBuy
Buy
Make
Sell
The Scorecard is GEPSs Primary Vehicle for
Supplier Measurement by Providing a Summary of
Cost Reduction, Quality, Delivery, and Supplier
Integration.

• Real-time access to GEPS supplier evaluation
• Provides supplier the ability to understand
  evaluation criteria, current evaluation status,
  and areas for improvement
• Sets benchmark for new suppliers
• Allows supplier to focus on strategic cost
  reduction methods - not just price

Supplier XYZ Company ABC


Buyer ABC Phone
555-555-5555 SQE ABC
Phone [phone]

Our Tool For Evaluating Our Suppliers Performance
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DART
eBuy
Buy
Make
Sell
Document Archive Retrieve Tool--Allows the
Supplier to Retrieve and Print Drawings and
Specifications Associated with Open Purchase
Orders

• Internet Access to GEPS Drawings
• Reduced Cycle Time to Attain Drawings and
  Complete a Project
• Reduced Costs - Delivery, Printing, Etc.
• Increased Specification Accuracy

Drawings Immediately Available On Open Purchase
Orders
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Buy
Make
Sell
eSell

• eSell generates revenue for GE through
• Online transactions
• Adding value to what currently offers
  customers
• Forcing GE to change its behavior and become
  more competitive, based on customer use of the
  Internet
• The Internet becomes a critical source of
  real-time customer / GE interaction and
  relationship management
• The Internet allow GE to build on its image of
  provider-friendly, stable partner, 24x7.

1 Billion Online Sales in 1999 and 7 Billion in
2000
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eSell
Buy
Make
Sell

• GE Plastics--Polymerland
• Online sales data portal for the plastics
  industry
• Strong design, research and order status
  capabilities
• Current order rate of 15M per week

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Buy
Make
Sell
eSell

• GE Plastics--Polymerland
• Customer may make a particular color for a
  certain material
• Online order the color sample sheet
• Delivery within 48 hours which used to be in
  several weeks

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Buy
Make
Sell
eSell

• GE Power Systems
• Leading online transaction site for the utilities
  industry
• Product service comparisons
• Warranty, repair installation
• Wizard used to guide customer to find out the
  potential problem

gepower.com
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eMake
Buy
Make
Sell

• Eliminate Manual Activities
• Improve and Simplify the Workflow Process
• Paperless Work Environment
• Unnecessary Touch Point Reduction or Elimination
• Better, Faster Information
• Reduce Support Resources
• Digitize EVERYTHING

40-50 Savings on Make Costs at 1.5 Billion in
2000
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Buy
Make
Sell
eMake
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Keys to Success

• Leadership and Top-down Support
• Involve Customers Through the Effort
• Get Business User Buy-in and Participation
• Six Sigma as the Enabler
• Dont Wait Until Everything is Perfect. Just
  Begin
• Boundaryless Learning Environment
• Follow up with Customers After Launch

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