The Future of Manufacturing at GE Appliances

With its microfactory strategy, the appliance leader is thinking small to get big

Subscriber: Log Out

Every now and then, you come across something that makes you look at the world a little differently. FirstBuild, GE Appliances’ microfactory strategy, is a concept that could make you think differently about how new products are created and brought to market, as well as whether mass production and economies of scale are the only way to manufacture.

Economies of scale, as we all know, hold that if you mass produce a product you can spread the cost of production across millions of units. That lowers the price you charge consumers. Unless you’re playing in the luxury market, where a select few will pay big for exclusivity, mass production is the way to take market share. The downside of that approach is that it’s difficult to introduce new products into the market that don’t appeal to a broad spectrum of the population to get scale.

With FirstBuild, GE Appliances, a Haier company, is turning economies of scale on its head. Founded in 2014 as a wholly owned subsidiary, FirstBuild is described as “a destination for makers who are fueled by a relentless drive to create what’s next through co-creation with its community…Its microfactory, open makerspace, online community, and go-to-market approaches lead to innovative products people love.”

Creating the home of the future

André Zdanow, the president of FirstBuild and the executive director of small appliances and COCREATE Stamford for GE Appliances, puts it this way: “We are tasked with inventing the home of the future. To do that, we are trying to get closer to the consumer and to separate ourselves from the bureaucracy that exists in a large manufacturing company. We took ideas from the startup world, like consumer-led innovation and doing small batch manufacturing. It’s a grassroots approach from ‘wouldn’t it be cool’ to a prototype.”

He adds, “We brought the quality, safety, and rigor from GE Appliances and jettisoned everything else.”

A few things set FirstBuild apart. The first is the size of the microfactory. The FirstBuild microfactory in Louisville is just 35,000 square feet in a former warehouse on the campus of the University of Louisville. A second space is going up in Stamford, Connecticut.

The Louisville microfactory is divided into four sections: They include an open community space for brainstorming and production demonstration; a makerspace for prototyping and building; a shop to fabricate components; and a microfactory where products are assembled.

The microfactory is optimized for small-batch product production. There’s not a lot of automation or injection molding in the shop. Rather, it includes hand tools, 3D printers, a CNC machine, a laser, and water jets. At the microfactory stage, the emphasis is on how a product works rather than what it looks like. Local innovators and inventors who get certified on equipment can work in the shop on their own projects.

Kickstarting ideas

A second characteristic is that the facility “innovates through co-creation.” FirstBuild’s philosophy is that not every new product needs to be developed in-house; rather, there are a lot of innovative ideas out there among consumers if FirstBuild can just tap into them. They’re doing that in a number of ways: “We’ve worked with kickstarters and we’ve done crowdfunds,” Zdanow notes. “We start a conversation on our website, on social media, and in person.” One example is that FirstBuild posts videos on YouTube as products progress, which allows feedback on whether they’re on the right track.

Last, FirstBuild has a fail-fast mentality. “We allow a product to get killed at any point in the iterative process,” Zdanow says. You can do that when you’re working on batches of one.


GE Appliance’s FirstBuild microfactory approach is giving life to innovative ideas that may ultimately make people’s lives easier. (Photo: GE Appliances)

It’s easy to think of the microfactory as a science project, without the need to turn a profit. And, in the early years that was true. Today, however, FirstBuild does have an operational business model and aims to turn a profit. It is tasked with launching 12 new products a year and “graduating” one by transferring it to GEA or launching it into the market on its own. As an example, the microfactory makes some components for GEA’s Monogram brand, which is a high-end, lower-volume brand, and, during COVID the microfactory made face shields for first responders. “When GEA’s supply chain was having issues during the pandemic, we were able to step in and support the company by making components like a trim kit for microwaves,” Zdanow says.

Innovative products

Working with community feedback, Zdanow says that FirstBuild has successfully developed more than 86 new products or features since it was launched. Two of the notable products are the Opal Nugget Ice Maker and the Shabbos Keeper.

The Opal makes chewable, crunchable, flavor-saving nugget ice. It earned over $2.7 million on Indiegogo, a platform where entrepreneurs launch new, unconventional products that solve everyday problems. It’s now available from GE Profile.

The Shabbos Keeper addresses a problem for an underserved community, in this instance the Orthodox Jewish community. Those who observe the sabbath are prohibited from performing certain activities from sunset on Friday until sundown on Saturday. During that period, they can’t cook, turn off lights, or use household appliances because, for example, opening and closing a refrigerator door would activate lights or sounds such as an auto-defrost turning on and off.

The Shabbos Keeper is programmed with the entire Jewish calendar and can automatically set a refrigerator to Shabbos mode each week and every Yom Tov, and then set it back to weekday mode after the sabbath. When in Shabbos mode, it fully automates the compressor, auto-defrost, lights, sensors, and thermistors. That allows a person to open the refrigerator without turning on the light or making a sound that would violate the Sabbath. Launched at FirstBuild, it’s now available from ZMAN Technologies.

So, let’s go back to where we started: Mass production and economies of scale. Is that still the only way manufacturing makes sense or does the future look different? “It’s not an either/or,” argues Zdanow. “Large-scale manufacturing has a role, but the future of sustainable manufacturing is not always about scale. It can be enabled by a microfactory that allows you to test and learn like a startup. It allows us to look for the new rather than leave innovation to the startup world.”

SC
MR

Latest Podcast
Talking Supply Chain: Visibility and external manufacturing
Gartner Supply Chain’s Sam New joined the Talking Supply Chain podcast to talk about how business can overcome the challenges of achieving…
Listen in

About the Author

Bob Trebilcock, MMH Executive Editor and SCMR contributor
Bob Trebilcock's Bio Photo

Bob Trebilcock is the editorial director for Modern Materials Handling and an editorial advisor to Supply Chain Management Review. He has covered materials handling, technology, logistics, and supply chain topics for nearly 40 years. He is a graduate of Bowling Green State University. He lives in Chicago and can be reached at 603-852-8976.

View Bob's author profile.

Subscribe

Supply Chain Management Review delivers the best industry content.
Subscribe today and get full access to all of Supply Chain Management Review’s exclusive content, email newsletters, premium resources and in-depth, comprehensive feature articles written by the industry's top experts on the subjects that matter most to supply chain professionals.
×

Search

Search

Sourcing & Procurement

Inventory Management Risk Management Global Trade Ports & Shipping

Business Management

Supply Chain TMS WMS 3PL Government & Regulation Sustainability Finance

Software & Technology

Artificial Intelligence Automation Cloud IoT Robotics Software

The Academy

Executive Education Associations Institutions Universities & Colleges

Resources

Podcasts Webcasts Companies Visionaries White Papers Special Reports Premiums Magazine Archive

Subscribe

SCMR Magazine Newsletters Magazine Archives Customer Service

Press Releases

Press Releases Submit Press Release