How General Electric Company Challenges Conventional Wisdom and Wins

Because GE doesn’t subscribe to conventional wisdom, it's now in a position to gain a considerable competitive advantage in the coming years.

Jun 28, 2014 at 12:00PM

"3-D printing will never replace traditional manufacturing."
--Conventional wisdom

General Electric (NYSE:GE) apparently never got the memo on 3-D printing's supposed shortcomings, because the company has been busy proving that 3-D printing is an extremely capable technology, well suited for mission-critical and highly complex manufacturing applications. By challenging the conventional wisdom that 3-D printing is primarily a prototyping process, GE has put itself many years ahead of its closest competitors in terms of 3-D printing manufacturing expertise. And because 3-D printing has the ability to create fundamentally better products, GE has the potential to gain a considerable competitive advantage in the coming years.

When two great stories come together
Nearly a decade ago, General Electric began looking for ways to bring products to market faster and turned to Morris Technologies, a leading 3-D-printing manufacturing company in terms of expertise, to better understand how 3-D printing could be used to iterate products more quickly and cost effectively. Around the same time, a group of GE Aviation engineers was designing a next-generation jet engine fuel nozzle and realized that 3-D metal printing isn't just great for iterating designs more quickly -- it's also capable of creating products that conventional manufacturing simply couldn't. The following video outlines 3-D printing at General Electric and the essential role it played in creating the world's first 3-D metal printed jet engine fuel nozzle that's expected to take to the skies in 2017.

Source: GE Aviation.

On a high level, 3-D printing is a layer-by-layer additive manufacturing process, meaning parts are literally built up one layer at a time. Because 3-D printing requires no tooling, it's more cost effective than traditional mold making and invites an entirely new design freedom and level of complexity than conventional manufacturing could ever offer. To illustrate the power of 3-D printing, General Electric consolidated a conventionally manufactured jet engine fuel nozzle from 18 parts into one 3-D printed part. Not only is the 3-D printed fuel nozzle more efficient to manufacture from a resource standpoint, but it's also five times more durable and 25% lighter than its predecessor. In other words, 3-D printing is delivering on its promise to make fundamentally better products than conventional manufacturing.

As these benefits became increasingly apparent, General Electric acquired Morris Technologies in 2012, and the company now has plans to 3-D metal print 45,000 leap fuel nozzles a year by 2020, marking the largest scale, mission-critical manufacturing run in the history of 3-D printing.

The view from 35,000 feet
Today, General Electric is pioneering the use of 3-D printing for real-world, mission-critical manufacturing applications. It has a substantial lead over the competitors, which haven't put nearly as many resources behind 3-D printing. This competitive gap will soon be realized in the coming years, when roughly a decade of work will show the world that 3-D printing is no longer just suited for prototyping, but also the next great leap in manufacturing advancements.

Twenty years from now, General Electric intends on having 50% of its products "touch" 3-D printing in some way -- whether it's the product itself, the prototype that becomes the product, or the tool that makes the product. No matter how you cut it, 3-D printing is poised to become an increasingly important technology in end-use manufacturing, and General Electric is the company currently enacting this fundamental change to the manufacturing industry and the world at large.

As we investors know, anchoring on past conventions is dangerous, largely because investing is a forward-looking mechanism, and the world has never experienced any great achievement without challenging conventional wisdom -- and winning.

Warren Buffett: This new technology is a "real threat"
Warren Buffett just called this emerging technology a "real threat" to his biggest cash cow. While Buffett shakes in his billionaire boots, only a few investors are embracing this new market, which experts say will be worth over $2 trillion. It won't be long before everyone on Wall Street wises up, and that's why The Motley Fool is releasing this timely investor alert. Click here to learn more about what's keeping Buffett up at night and the one public company we're calling the brains behind the technology.

Steve Heller has no position in any stocks mentioned. The Motley Fool owns shares of General Electric. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of fool.com.

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to www.fool.com/beginners, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at www.fool.com/podcasts.

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.


Compare Brokers