Six Sigma at GE

Before beginning the implementation, studies revealed that GE's operations were carried out between 3-4 sigma, i.e., about 35,000 defects per million opportunities. According to company estimates, avoidable expenditure of $7-10 billion was being incurred in the form of scrap, reworking of parts, correction of transactional errors, inefficiencies, and lost productivity.

According to analysts, the groundwork for the implementation of Six Sigma at GE had begun in 1988 in the form of an initiative known as the 'WorkOut' program. The company realized that employees were an important source of intellectual power for new and creative ideas.

Analysts felt that the implementation of Six Sigma enabled Welch to transform an old-economy industrial giant into a competitive and growing company. No other corporation seemed to have integrated Six Sigma in to its operations as widely as GE. Within five years of its implementation of Six Sigma at GE produced annual benefits of more than $2.5 billion for GE worldwide. Analysts remarked that Six Sigma was an indisputable success at GE whether in terms of customer satisfaction, improvement in internal performance, or in the improvement of shareowner value...