Case of the Rotary Compressor
Elevator Pitch: Every good case tells one good story. The simple story told in this case is how one of the most financially and well-managed companies in the history of the world, GE, decided to rush to market with a new refrigerator compressor (they thought was exactly like one used for air conditioners), without sufficient testing and it failed, miserably in the field. Several early warnings during development were ignored, and negative information was discounted because it would slow the project down (9 months introduction versus approx. 2 years). Doubtless, people were afraid of the “shoot the messenger” syndrome in most large companies on a deadline. This is a simple case of “speed kills.” When you have radical new product technology it is inconsistent with making a narrow launch date. Toyota has never missed a launch deadline because the company only uses tested, incremental technology. But is that the answer? And the ultimate question, what did the GE Appliance division and the corporation learn from this experience? (Take-aways: 1) even great companies are challenged by technology (sometimes even more than other; 2) Don’t try to schedule a Breakthrough, technology obeys its own rules; 3) Shooting the messenger—in this case the consultant—doesn’t help, it only hurts.)
1. What factors in the product development process causes this disaster? What individuals were responsible? Several factors: while concentrating on reducing noise levels and meeting a project deadline, other factors were forgotten. Tight tolerances, especially the first time out ona new product, contributed significantly as well. Negative information, including a consultant’s report suggesting a JV with a Japanese partner, was ignored. Finally, insufficient testing, and breaking with proven company tradition of extensive field testing, was the cardinal sin. Who is to blame? The quality system is to blame, the responsibility of...
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