Six Sigma at GE

Six Sigma is a well-structured, data-driven methodology for eliminating defects, waste, or quality control problems in all kinds of business activities. It is based on a combination of well-established statistical quality control techniques, simple and advanced data analysis methods and the systematic training of all personnel at every level in the organization involved in the targeted activity or process. It is based on the statistical concept that the output of most of the physical processes follows a normal distribution,² with the processes centered at the mean (Refer Exhibit II). Theoretically, any process would have a natural spread of 3 Sigma (standard deviation) from the normal distribution mean on either side of the center.

Six Sigma is a sophisticated quality program that is designed to reduce defects to 3.4 per million opportunities. The program focuses on streamlining all the processes in the organization to improve productivity and reduce capital outlays while increasing the quality, speed and efficiency of the operations. The concept was pioneered by Motorola in the early 1980s. Motorola's initiative stemmed from its belief that improving quality would reduce costs and that the highest-quality producer should be the lowest-cost producer. Six Sigma enabled Motorola to achieve defect-free performance in its manufacturing, designing, engineering, and business processes. Six Sigma was originally developed to be used for 'physical process' - those performed in manufacturing and easy to observe, record, analyze and measure.