Growth Through NPS & Lean Six Sigma

Gary ReinerJuly 26, 2006

GE

“This document contains "forward-looking statements" - that is, statements related to future, not past, events. In this context, forward-looking statements often address our expected future business and financial performance, and often contain words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," or "will." Forward-looking statements by their nature address matters that are, to different degrees, uncertain. For us, particular uncertainties which could adversely or positively affect our future results include: the behavior of financial markets, including fluctuations in interest rates and commodity prices; strategic actions, including dispositions; future integration of acquired businesses; future financial performance of major industries which we serve, including, without limitation, the air and rail transportation, energy generation, media, real estate and healthcare industries; unanticipated loss development in our insurance businesses; and numerous other matters of national, regional and global scale, including those of a political, economic, business, competitive and regulatory nature. These uncertainties may cause our actual future results to be materially different than those expressed in our forward-looking statements. We do not undertake to update our forward-looking statements.”

2

GE process customer success

Design forSix Sigma

(DFSS)

Net PromoterScore

(NPS)

+ +

+ Applied to New Product Introduction

+ Improves design tolerance quality, reliability, durability

+ Intent to repurchase/recommend

+ Customer feedback centers on responsiveness

Integrated approach to customer success

LeanWorkouts

+ Customer facing processes

+ Cross-functional+ Reduce cycle

time/improve responsiveness

1996 2004 2004

3

0

9

12

Dash 9’94

AC 4400’94

AC 6000’96

DC EVO’05

AC EVO’05

Locomotive failures(Per locomotive, first six months, annualized)

6

3

Vascular service eventsPer installed system, 90-day rolling average

Aviation CFM-56(Warranty & concession costs ($ MM))

Appliances service call rate(Per 100 installations, first year)

DFSS continues to improve product quality

0

3

6

9

12

'96 '98 '00 '02 '04 '06

80%reduction

55%reduction

62%reduction

57%reduction

‘01 ‘02 ‘03 ‘04 ‘05 ‘06

60

45

30

15

0‘03 ‘04 ‘05 ‘06

4

2

0

6

8

10

4

NPS driving even further customer focus

(NPS)

% promoters

% detractors

0-6Detractors

7-8Passively satisfied

9-10Promoters

10

9

8

7

6

5

4

3

2

1

“On a scale of 0-10, how likely are you to recommend GE to a friend or colleague?”

• Simple• Prioritizes improvement actions• Responsiveness single biggest factor

Why We Like NPS

World Class 50%+

Typical10% to 30%

0

=Net

Promoter Score

5

The Lean Work-Out approach

• Business team identifies a key customer facing process —fulfill, innovate, or sell — to compress end-to-end cycle time

• Cross-functional team draws end-to-end value stream map … “as is”

• Leverage CAP, Lean, and 6 Sigma tools as appropriate to establish “to be”

• Include customers and suppliers as appropriate

• Make most changes during the Lean Work-Out

• Business leader drives multi functional efforts to drive remaining action items

Lean showcase

1. Small commercial construction

2. Energy Servicesglobal parts

3. AviationComponent Repair

4. MagneticResonance

5. HealthcareServices

6. Plastics GlobalColor Express

7. EquipmentFinance (Europe)

8. RE specialized industries

9. Energy WindInstallations

10.Corporate Lending

Leverage our process capabilities …to grow in the marketplace

Revenue growth >$50MMper Lean showcase

“Lean workout” focused on– New product introduction– Inquiry to order– Order to remittance

30 Lean showcases in place today

Current Lean showcases11. Retail Sales

Finance12. Money Australia

Branches13. O&G Global

Services14. HC Financial

Services15. Nuclear Parts

& Services16. Security Digital

Video17. Water Custom

Equipment18. Aviation Engine

Overhaul19. Energy Financial

Services20. Silicones NPI

21. C&I Built inCooking Product

22. NBCU Televisiondistribution

23. US EquipmentFinancing

24. Retail ConsumerFinance

25. CommercialDistr. Finance

26. Corporate Payment Sys.

27. Transportation –Loco

28. Energy outageservices

29. Water Comm.Operations

30. Clinical Systems

7

Lean workouts on:1. EVO standardization2. PSI process simplification3. Engine4. Loco final assembly5. Radiator CAB assembly

Lean Showcase - 10 day locomotive

31 days

Major Components Paint Test

10days

Assembly

Driven by

Cycle~200 Lean Workouts in ’06 …

100+/year going forward

Impact

Creating value for customers and GE

Customer:• On-time delivery• Reliability

GE:• 50% ↑ Capacity• 50% ↓ Inventory• 5% ↑ OM

8

What you’ll see today

NPS feedback

Lean six sigma … cycle time reduction

Creates customer value

Creates GE value …growth & margins

• Time to yes• Higher sales• Lower costs

• Higher close rate• Increased capacity• More price & lower cost

Growth through NPS and Lean 6 Sigma

Commercial FinanceMike Pilot

Consumer FinanceMark Begor

HealthcareDee Mellor

InfrastructureDave Tucker

Growth & Margin Expansion

Analyst MeetingJuly 26, 2006