Successes and Challenges of Industrial R

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Successes and Challenges of Industrial RD in
China
Xiangli Chen GE Healthcare Oct. 16, 2006
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RD Investment in China

• RD Spending as Percent of GDP
• Developed Countries 3
• China about 1 at present
• 2.5 by 2020
• 750 MNC RD Centers in China
• Spend about 2B/Year
• 11 of total RD Spending in China
• Important in Chinas Innovation eco-system

3
Patents Issued in China, US and Japan
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RD Key to China Business Strategy
Focused on Capability Capacity Self-Sufficient
Local Feeling
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GE in China 12,000 Employees, 2B
Investments 5B/Yr Revenue

Beijing Wuxi - GE Healthcare RD
Harbin
RD Presence
Chang Chun
Hu He Hao Te
Urumuqi
Shenyang
Urumqi
Tian Jin
Beijing
Dalian
Shi Jia Zhuang
Tai Yuan
Qing Dao
Ji Nan
Shanghai China Tech Center - Global Research
(corp. lab) - Business RD Teams (except GE
Healthcare)
Zheng Zhou
Lanzhou
Wu Xi
Xian
Shanghai
Nanjing
He Fei
Su Zhou
Chongqing
Wuhan
Ning Bo
Hangzhou
Chengdu
Nan Chang
Changsha
Fu Zhou
Gui Yang
Xiamen
Taiwan
Nan Ning
Kun Ming
Guangzhou
Shenzhen
Hong Kong
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RD Skills Development Process
Install Base Ownership
Acquisition JV Greenfield
Global System Level New Product Introduction
Minor design Modification
Product Enhancement
Growth Path
Production transfer
New Sub-systems
Components Localization
Platforms Advanced Apps Service Technology
Product structure Internal tools Manufacturing Pro
cesses
Product definition Cost Reduction Supplier
Development Program Execution
System Performance Mechanical Electrical SW
design Field Roll-out Product Quality
Customer features System Design NPI process New
Tech Introduction
Engineering Competency Focus
Year 5
Year 2-3
Year 3-5
Year 1-2
Time to Maturity (Years)
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Example GEs CT Development in China
Y2005/2006
RT 4/16 BrightSpeed 4/8/16
CT/e Optimization
Y2004
CT/Be-2 LS China
Y2003
CT/Be-1 CT/e Twin Linux
Y2000
CT/e CT/e Twin
gt800 units
510 units
Key achievements

• High Tech at Affordable Cost
• Significant Cost Down while Improving
  Performance
• Best-selling Value CT in the World
• Grow NPI Competency with Program Success
• Win more Opportunities Performance Premium

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RD Driving Growth
GE Healthcare China RD
Manufacturing/Sourcing
gt700M
gt350
Sourcing
Engineering Headcount
MFG/Sourcing Output
MFG
lt30
lt25M
'95
'00
'05
'95
'00
'05

• Multiple Technologies CT, X-ray, MRI,
  Ultrasound, Healthcare Information Tech
• Product Leadership Value Performance segments

• Sustainable Productivity Growth.
• Comprehensive Product Coverage for Global Supply
  Chain

Rapidly Developing Ability to Win in China and
Globally
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Managing RD Growth in China

• Grow RD Competency One Step at a Time
• Production Transfer
• Localize and Develop Supplier Base
• Value Engineering / Re-design
• Sub-system Ownership
• System-level New Product Introduction Global COE
• Start Local Develop into Global
• In China for China In China for the World

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Building Effective RD Organization

• Plan Strategically, and Stay the Course
• Set up realistic expectations, and meet / exceed
  them
• Start with expatriate leaders strong ties with
  HQ, act as role models and bring corporate
  culture
• Be culturally sensitive organization, career
  path, and retention
• Invest in People
• Hire only the best, and fully leverage
  returnees
• Bridge assignments send org. leaders overseas,
  and bring tech experts to China
• Training soft skills, project management, design
  processes, IP protection...
• Provide challenging opportunities, build for long
  term success.

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Thank You!??!