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.|
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