Six Sigma at General Electric - Essay Example

of the of the Six Sigma at General Electric Introduction The aim of Six Sigma is to controlall processes at the outset well before they get to the customer (Murdoch, 1998). This is done in a variety of ways by different firms. The following approaches represent some of the philosophical underpinnings: Six Sigma at GE At GE the process measures how products are made and how customers are serviced. Its goal is to ensure that there are no problems with any product or service that GE provides. This is done through quarterly customer surveys and daily manufacturing checks by internal engineers (Cohen, 1997). There are certain management mantras that will forever be associated with GE's CEO Jack Welch: being number one or number two in your field; preaching the "boundaryless" sharing of ideas enabling information flow up and down the organization structure; and now Six Sigma (Conlin, 1998). Since the 1980s, GE has sought improvement in business-performance and profitability through various programs (Hendericks and Kelbaugh, 1998). However, in 1995, Welch decided that those programs were not enough and directed the company to undertake Six Sigma as a corporate initiative. He said that it "is the only initiative he will introduce, but it will be introduced everywhere" (Murdoch, 1998). The introduction of Six Sigma within GE was a dramatic culture change requiring impetus from the very top. Welch's personal leadership and direction was necessary and instrumental in the rollout of Six Sigma. When the employees tried to dismiss Six Sigma as the program of the month, Welch changed the business structure at a corporate level to underscore the importance of the goal. He implemented two notable strategic changes: (1) a full 13 days of training for every employee; and (2) promotional consideration dependent on the completion of Green Belt training (Hendericks and Kelbaugh, 1998). Welch has directed that every exempt employee at GE be trained in Six Sigma methodologies by the end of 1998. The concept of Six Sigma at GE deals with measuring and improving how close the company comes in delivering on what it planned to do. Six Sigma provides a way for improving processes so that the company can more efficiently and predictably produce world-class products and services. There is a five-phased methodology applied by a Six Sigma team to tackle specific problems to reach Six Sigma levels (Paul, 1999). (We note that when Six Sigma was first launched at GE Aircraft Engines, a four-step methodology (MIAC) was followed. Recently, the Define phase has been added to recognize the importance of having a well-scoped project and to be in line with the current practices across GE): (1) Phase 1 - define (D). Who are the customers and what are their priorities A Six Sigma project team identifies a project suitable for Six Sigma efforts based on business objectives as well as customer needs and feedback. As part of the definition phase, the team identifies those attributes, called CTQs (critical to quality characteristics), that the customer considers to have the most impact on quality. (2) Phase 2 - measure (M). How is the process measured and how is it performing The team identifies the key internal processes that influence CTQs and measures the defects currently generated relative to those processes. (3) Phase 3 - analyze (A). What are the most important causes of defects The team discovers why defects are generated by identifying the key variables that are most likely to create process variation. (4) Phase 4 - improve (I). How do we remove the causes of the defects The team confirms the key variables and quantifies their effects on the CTQs. It also identifies the maximum acceptable ranges of the key variables and validates a system for measuring deviations of the variables. The team modifies the process to stay within the acceptable range. (5) Phase 5 - control (C). How can we maintain the improvements Tools are put in place to ensure that under the modified process the key variables remain within the maximum acceptable ranges over time. A critical step at GE is identifying and bounding Six Sigma projects. Projects include "dashboards" headed up by Customer Business Teams and those projects managed and worked by all employees. At GE Aircraft Engines, there are currently 80+ dashboard projects, targeted to collect, report, track, and improve customer satisfaction through focusing on requirements identified as vital to key customers. Dashboards are negotiated with individual customers to identify what is most important about GE products and services to the customer. Other projects are selected based on their ability to impact either customer satisfaction or business priorities. In addition, projects may be selected to leverage successfully completed projects to other processes, sites, or product lines. Different approaches to applying Six Sigma include achieving "entitlement" and implementing "stable operations". Entitlement is the level of performance a process, product, factory, or business should be able to achieve without substantial investment and/or reengineering. Stable operations entails stabilizing a process, product, or service by identifying the causes (process input or "Xs") of the defective outliers (defective outputs "Y"), eliminating the occurrences of the outliers, and eventually improving the process. Conclusion As both philosophy and measurement, six sigma at GE focuses on gaining full-process understanding, including thorough analysis of how the key process inputs affect the process output. Data about output alone is not the defining parameter, but rather that information is analyzed together with the input data to confirm the "root cause". Once the key inputs are identified, assuring sustainability of any process, improvement is simplified by linking the control plan to controlling the input rather than controlling the output. Works Cited Bolze, S (1998), "A Six Sigma approach to competitiveness", Transmission & Distribution World, . Conlin, M (1998), "Revealed at last: the secret of Jack Welch's success", Forbes, Vol. 161 No.2, . Fortenot, G, Behara, R, Gresham, A (1994), "Six Sigma in customer satisfaction", Quality Progress, . Hendericks, C, Kelbaugh, R (1998), "Implementing Six Sigma at GE", The Journal for Quality and Participation, . Hoerl, R (1998), "Six Sigma and the future of the quality profession", Quality Progress, Vol. 31 No.6, pp.35. Kane, L (1998), "The quest for Six Sigma", Hydrocarbom Processing (International Edition), Vol. 77 No.2, . 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