What is Six Sigma?
Sigma is defined as "a statistical unit of measurement that describes the distribution about the mean of any process or procedure" [Motorola, 1998]. As the sigma value is raised, the variation around the mean value decreases, eventually approaching zero variation, mythically known as "zero defects". Theoretically, Six Sigma equates to a variation about the mean of no more than .002 dpmo (defects per million opportunities) outside allowable standards. However, in industry terms, achieving Six Sigma Quality means that the defects in a given process or procedure do not exceed 3.4 dpmo. Most of today's successful businesses, including GE, operate at a 3.5 sigma level. This produces approximately 33,000 dpmo.
The Six Sigma process was introduced by Motorola on their way to winning the 1988 Malcolm Baldridge National Quality Award. The process is more than a quality definition applied to statistical tools -- it is an identifiable and achievable means to reach the allusive goal of continuous improvement in all business areas. Six Sigma quality is important to world-class organizations such as GE and Motorola because quality and customer satisfaction are assumed to be proportionate.
Six Sigma at General Electric
Jack Welch, Chief Executive Officer of GE, has set a company-wide goal to have all processes reach Six Sigma Quality by the year 2000. Welch and GE realize that attaining Six Sigma Quality will require retraining their entire workforce to think and act like engineers -- an enormous feat with remarkable benefits. To understand the needs of customers, GE stresses five "CTQ's" -- Critical to Quality measures: get the customers what they want, when they want it, on time, undamaged, and working [Trotter, 1997].
The GE Six Sigma program has identified and defined the phases used to optimize processes to ensure a resultant product or service is defect free. These phases, known by the acronym DMAIC, are explicitly followed, and with that, successful results are noticed. The DMAIC process steps include: Define, Measure, Analyze, Improve, and Control. In order to optimize any and all processes within GE, a thorough and rigorous analysis of the applicable data is processed using Minitab, an extremely powerful statistical data analysis program.
The training program currently underway within GE is broad and encompasses
all of the salary exempt employees as well as a significant percentage of the
non-exempt employees. The training GE employees receive is an intense two
part program. The first part is an introduction to DMAIC and Six Sigma
concepts, while the second part is a follow-up training to further reinforce
newly acquired skills. To accomplish the Six Sigma Goal, GE established
three levels of trainers/project leaders, called "Master Black Belts" (mentors,
coordinators, and drivers of GE's entire Six Sigma program), "Black Belts"
(primarily focused on training and guiding all Green Belts under their
jurisdiction to complete their requirements) and "Green Belts" (part-time
project leaders). To date, there are 4,000 full-time Master Black Belts and Black Belts and 60,000 Green Belts.
Jack Welch has provided the single most important ingredient to a continuous quality improvement implementation: Leadership. The training program at GE is the result of nothing less than full dedication from the entire leadership structure, starting at the top. Welch has committed the necessary financial resources to the project, and is tying quality improvement to management promotion, forcing a change in corporate culture towards quality improvement. In addition, forty percent of each bonus given to top management is tied to the attainment of Six Sigma goals.
The complexity of a Six Sigma quality program would be impossible to initiate and sustain without dedicated leadership and a thorough approach to training the entire workforce to think customer satisfaction through quality at all times. The training required to attempt a program such as GE's Six Sigma Quality is enormous - it involves retraining an entire workforce to think and act like engineers. GE has spent hundreds of millions of dollars since 1995 to mold a workforce that lives customer satisfaction through quality. Thus far, the realized productivity and service improvements of this training effort have more than paid for the time and assets allocated to the training - and the successes are a significant part of the fuel that is keeping GE's quality juggernaut in motion.
Likewise, Jack Welch has provided GE the steadfast leadership that total quality pioneers, such as Deming and Juran, preach as a primary requirement to the success of a true and lasting quality initiative. The training program is the result of nothing less than full dedication from the entire leadership structure, starting at the top. By constantly preaching Six Sigma, practicing the processes, and providing the necessary assets to approach sufficient training levels, Welch and GE have shown they are fully committed to quality and customer satisfaction.
GE, as well as several other companies, have taken the Six Sigma challenge and are proving that higher quality increases operating margins.
Motorola Inc. (1998). Six Sigma: Driving towards zero
defects. [On-line], Available http://www.mot.com/Employment/motlife/6sigma.htm
Trotter, L. (1998, April). Six Sigma: Driving customer satisfaction in all we do. [On-line], Available: http://www.ge.com/edc/dcsixsig.htm
General Electric’s Six Sigma Quality Program: A Statistical Methodology Requiring Training and Leadership. Full Report. http://www.geocities.com/SiliconValley/Pines/7842/sigmafull.html
General Electric’s Six Sigma Quality Program: A Statistical Methodology Requiring Training and Leadership. Power Point Version. http://www.surfline.ne.jp/saljoy/SixSigma/
This report composed by Group 1 for TMAN 632, University of Maryland, University College, Summer 1998. Group members include: