How GE Healthcare Boosted Free Cash Flow by $1.3 Billion

GE Healthcare — a global leader in medical technology and digital solutions — takes a data-driven approach to innovation and efficiency. The company is using Celonis as a tool to streamline its day-to-day operations and unlock working capital within a competitive market. 

And it’s clearly working. 

During the course of just one year, GE Healthcare increased free cash flow by $1.3 billion. But how did they pull it off? 

During Celosphere 2021, Celonis CEO Alex Rinke interviewed Treasurer Chinmay Trivedi to find out how the enterprise used the Celonis Execution Management System (EMS) to drive better outcomes — and how others can do the same. Here are some of Trivedi’s insights.  

#1 - Change happens from the bottom up

GE Healthcare has customers across the world and a distributed supply chain, making maximizing performance challenging — especially when it comes to connecting the dots across multiple transactional systems. Trivedi was quick to describe the growth process as one that requires continuous improvement at all levels. 

But how does a global enterprise approach a goal like continuous improvement across the board? Trivedi’s answer: small, targeted changes and incremental growth. 

“Organic changes work better than top-down mandates,” he added. 

Adopting this strategy meant that many of the adjustments GE Healthcare made with Celonis — like implementing weekly reviews of finance estimates versus actuals in disbursement — might seem slight. But seemingly small adjustments can lead to major breakthroughs. And in this case, they did. 

Weekly reviews led to better forecasting accuracy, and the company estimates that they prevent about one thousand incorrect payments in Accounts Payable every single week. 

The upshot? For a company like GE Healthcare, the daily management of business execution powers process excellence. 

“Small, incremental changes can lead to big outcomes,” Trivedi said. 

#2 - Establish crystal clear goals

Trivedi also advised starting your process excellence journey with intentional goal-setting. 

“Be crystal clear about the outcomes you’re trying to drive,” he said. 

Clearly defining desired outputs fosters collective engagement across every department and division. This strategy also serves as a means of baking agency into work at every level, and avoids the dangers of top-down mandates. 

GE Healthcare leaders knew they wanted to improve cash flow and drive a culture of cash excellence at the outset of their process excellence journey — and this focus guided the way they used Celonis, and led to their outstanding cash flow results. 

#3 - Don’t think of it as a one-off improvement initiative

GE Healthcare’s story shows us that the corporate approach to identifying and eliminating inefficiency should be two-fold. 

Focusing on output is a critical step on the path to top performer status, but companies also need to ensure the quality of the operational drivers powering execution management. 

“You can measure the outcomes all you want, but if you’re not changing the input behavior it’s very difficult to get the output you want,” Trivedi said. 

He added that organizations should move away from thinking about data-driven changes as one-off initiatives. At GE Healthcare, evaluating and implementing the objective insights and improvement opportunities generated by Celonis is now built into day-to-day work. 

Putting the action in ‘actionable insights’

Organizations looking to eliminate inefficiencies within their value chains can definitely learn from GE Healthcare and its success. 

Identifying inefficiencies is key — but what matters most is how companies use that information to streamline core processes and drive better outcomes. To get tangible results, you need to translate data into action through daily execution management —  something that Celonis does automatically and in real time.

To learn more about how GE Healthcare uses Celonis to transform their day-to-day operations and drive cash flow — and how you can do the same — check out the Celosphere 2021 interview with Celonis CEO Alex Rinke.

Celonis

Author

Celonis believes that every company can unlock its full execution capacity. Powered by its market-leading process mining core, the Celonis Execution Management System provides a set of instruments and applications, the Celonis Studio as well as platform capabilities for business executives and users. The Celonis EMS offerings help companies manage every facet of execution management from analytics to strategy and planning, management, actions and automation.