24 November 2004 6 Sigma at GE
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Transcript of 24 November 2004 6 Sigma at GE
24 November 2004
6 Sigma at GE
GE PROPRIETARY
2 / 6 Sigma Overview24 November 2004
We are 11 businesses that growin any market cycle.
HealthcareInfrastructure NBC UniversalTransportation
Energy Commercial Finance Consumer Finance
Advanced Materials Consumer& Industrial Equipment Services Insurance
GE PROPRIETARY
3 / 6 Sigma Overview24 November 2004
•Value to Our Customers
•Strategy for Running a Business
•Tool to Eliminate Variation
•Vision of Product & Service Excellence
•Metric of World Class Companies
•Goal for Competitive Strength
Why Six Sigma?
GE PROPRIETARY
4 / 6 Sigma Overview24 November 2004
Our process rigor and ability to deliver can create growth capacity.
Invest inGrowth
ProcessRigor
Productivity& Cash
Capital efficiencySimplificationSix SigmaDigitization
GE PROPRIETARY
5 / 6 Sigma Overview24 November 2004
What Is Six Sigma? Measure of Quality
Process For Continuous Improvement
Enabler for Culture Change
GE PROPRIETARY
6 / 6 Sigma Overview24 November 2004
Hospital 5000 incorrect 2 incorrect Surgery procedures per week procedures per week
Measure of Quality
Mail 20,000 lost articles 7 lost articles Delivery of mail per hour of mail per hour
Drinking Unsafe drinking water Unsafe drinking water Water for 15 mins per day for 2 mins per year
Process Capability needs to be Better than you think !
Activity Defects @ 99% Defects @ 99.9997%
( 3.8 Sigma ) ( 6 Sigma )
Air 2 abnormal landings 1 abnormal landing Travel at most airports each day every 5 years
GE PROPRIETARY
7 / 6 Sigma Overview24 November 2004
1) Improved ControlDDMMAAIICCProcess for Improvement
On Average the Process is great - the Issues lie with the Variation
DefineDefine MeasureMeasure AnalyzeAnalyze ImproveImprove ControlControl
GE PROPRIETARY
8 / 6 Sigma Overview24 November 2004
DefineDefine
DDMeasureMeasure
MMAnalyzeAnalyze
AAre-Designre-Design
DDVerifyVerify
VV2) Process Redesign
Process for Improvement
The Average needs to Improve - Structural Problem with the Process
GE PROPRIETARY
9 / 6 Sigma Overview24 November 2004
Design For Six SigmaDesign For Six Sigma
DDFFSSSS3) New Process
Process for Improvement
New Process Development -Creating 6 Sigma Process Capability
GE PROPRIETARY
10 / 6 Sigma Overview24 November 2004
Enabler for Change
1) Inspect the product2) Pareto the symptoms perceived as being the cause of out of spec material3) Initiate action to mitigate / eliminate the symptoms
1) Measure the process output & analyze the data2) Discover quantitative relationships between the output & in-process variables3) Develop & implement control plan
Tough to achieve long-term sustainable improvement
Sustainable via In-process Control - no Product Inspection
Before6 Sigma :
With6 Sigma :
Fundamentally Different Approach
GE PROPRIETARY
11 / 6 Sigma Overview24 November 2004
Champions (Part-Time) All Business Leaders
Master Black Belts (MBB) 500
Black Belts (BB) 5,000
Green Belts (GB) 100,000
Six Sigma Associates 100%
Six Sigma Functions Resource Deployment @ GE ( # employees )
Enabler for Change
Huge Resource shift - Only the Best chosen It’s like an MBA - Vital to Career!
GE PROPRIETARY
12 / 6 Sigma Overview24 November 2004
Significantly Higher Net Income
Simpler Processes - Speed everywhere
True Focus on What the Customer Wants
Improved Employee Satisfaction
What is 6 Sigma
It’s all about Getting Results
So What’s it Done for GE?
GE PROPRIETARY
13 / 6 Sigma Overview24 November 2004
Six Sigma - Evolution in GE
Six Sigma - Results & Examples in GE
Six Sigma - Enabling GE e-Business
What Does Six Sigma Do For GE?
GE PROPRIETARY
14 / 6 Sigma Overview24 November 2004
7Evolution in GE
Six Sigma Evolution
1995 PRODUCTIVITY
1996 1997 1998 1999 2000 2001 2001+
1995Timeline
GE Launches Six SigmaThroughout Company
Focus :Core Activities
Objective :Productivity & Asset
Utilization
GE PROPRIETARY
15 / 6 Sigma Overview24 November 2004
7GE Turns to Six SigmaGE Turns to Six SigmaFor New ProductsFor New Products
Focus :Focus :New Product DesignNew Product Design
Objective :Objective :World Class CapabilityWorld Class Capability
in the Market Placein the Market Place
1995 PRODUCTIVITY1995 PRODUCTIVITY
1997 PRODUCT DESIGN1997 PRODUCT DESIGN
1995 1996 1998 1999 2000 2001 2001+
Timeline
1997
Evolution in GE
Six Sigma Evolution
GE PROPRIETARY
16 / 6 Sigma Overview24 November 2004
Abdomen: liver, spine, kidney
Head: skull, brain
Image Speeds
HEAD
SPINE
CHESTABDOMEN
PELVIS
LIVER
1 minute 19 seconds9 million
2 minutes 15 seconds1 million
3 minutes 17 seconds4 million
20 seconds 06 seconds6 million
Exam TimeBefore
Exam TimeAfter
Proceduresper Year
Products from 6 Sigma GE Healthcare GE Healthcare
LightSpeed CT ScannerLightSpeed CT Scanner
Before After
1995 PRODUCTIVITY1995 PRODUCTIVITY
1997 1997 PRODUCT DESIGNPRODUCT DESIGN
1998 @ THE CUSTOMER1998 @ THE CUSTOMER
1999 FULFILLMENT1999 FULFILLMENT
2000 DIGITIZATION2000 DIGITIZATION
Six Sigma Evolution
2001 CERTIFICATION2001 CERTIFICATION
Unparalleled Resolution in a Fraction of the Time
GE PROPRIETARY
17 / 6 Sigma Overview24 November 2004
From the most powerful Aircraft Engine ever built—the GE90-115B…
GE PROPRIETARY
18 / 6 Sigma Overview24 November 2004
To diagnostic imaging at the molecular level…
GE PROPRIETARY
19 / 6 Sigma Overview24 November 2004
To the first all-digital heart hospital…
GE PROPRIETARY
20 / 6 Sigma Overview24 November 2004
7GE Turns Six SigmaGE Turns Six SigmaLoose at the CustomerLoose at the Customer
Focus :Focus :Customer ProductivityCustomer Productivity& Value Add Services& Value Add Services
Objective :Objective :Revenue GrowthRevenue Growth
& Share Shift& Share Shift
1995 PRODUCTIVITY1995 PRODUCTIVITY
1997 PRODUCT DESIGN1997 PRODUCT DESIGN
1998 @ THE CUSTOMER1998 @ THE CUSTOMER
1995 1996 1997 1999 2000 2001 2001+
Timeline
1998
Evolution in GE
Six Sigma Evolution
GE PROPRIETARY
21 / 6 Sigma Overview24 November 2004
Customer Results GE Results
Output from 450 è 800 Units/DayWIP ê 85%
$1MM Cost Out
Floor Care Floor Care ManufacturerManufacturer
– Plastics
Airlines– Engines
Builders– AppliancesHospitals
– Medical
Retailers– Lighting– Appliances
OEMs– Vendor– CEF
Utilities– Power Sys.– Industrial Sys..
2MM lb. Share Shift$1.5MM Growth Program
6 Sigma @ the Customer
1995 PRODUCTIVITY1995 PRODUCTIVITY
1997 PRODUCT DESIGN1997 PRODUCT DESIGN
1998 @ THE CUSTOMER1998 @ THE CUSTOMER
1999 FULFILLMENT1999 FULFILLMENT
2000 DIGITIZATION2000 DIGITIZATION
Six Sigma Evolution
2001 CERTIFICATION2001 CERTIFICATION
Customers Gain Productivity….GE Rewarded with Share
GE PROPRIETARY
22 / 6 Sigma Overview24 November 2004
7Fulfillment ProcessesFulfillment Processesget Six Sigma Focusget Six Sigma Focus
Focus :Focus :Meeting Customer RequestMeeting Customer Request
Objective :Objective :
e-Enabling our Businesse-Enabling our BusinessTransaction ProcessesTransaction Processes
1995 PRODUCTIVITY1995 PRODUCTIVITY
1997 PRODUCT DESIGN1997 PRODUCT DESIGN
1998 @ THE CUSTOMER1998 @ THE CUSTOMER
1999 FULFILLMENT1999 FULFILLMENT
1995 1996 1997 1998 2000 2001 2001+
Timeline
1999
Evolution in GE
Six Sigma Evolution
GE PROPRIETARY
23 / 6 Sigma Overview24 November 2004
On TimeOn Time
6 Sigma Fulfillment
1995 PRODUCTIVITY1995 PRODUCTIVITY
1997 PRODUCT DESIGN1997 PRODUCT DESIGN
1998 @ THE CUSTOMER1998 @ THE CUSTOMER
1999 FULFILLMENT1999 FULFILLMENT
2000 DIGITIZATION2000 DIGITIZATION
Six Sigma Evolution
2001 CERTIFICATION2001 CERTIFICATION
Delivery to Customer want date
And how late?
But how early ?
GE PROPRIETARY
24 / 6 Sigma Overview24 November 2004
On TimeOn Time
h
1995 PRODUCTIVITY1995 PRODUCTIVITY
1997 PRODUCT DESIGN1997 PRODUCT DESIGN
1998 @ THE CUSTOMER1998 @ THE CUSTOMER
19991999 FULFILLMENT FULFILLMENT
2000 DIGITIZATION2000 DIGITIZATION
Six Sigma Evolution
2001 CERTIFICATION2001 CERTIFICATION
Reducing Variation to Meet Customer Request
6 Sigma Fulfillment
GE PROPRIETARY
25 / 6 Sigma Overview24 November 2004
Vari
atio
n fr
om R
eque
st
2/99 10/99 Today
17 Days 4 Days 2 Days
GE Advanced MaterialsGE Advanced Materials-Delivery to Request1995 PRODUCTIVITY1995 PRODUCTIVITY
1997 PRODUCT DESIGN1997 PRODUCT DESIGN
1998 @ THE CUSTOMER1998 @ THE CUSTOMER
1999 FULFILLMENT1999 FULFILLMENT
2000 DIGITIZATION2000 DIGITIZATION
Six Sigma Evolution
2001 CERTIFICATION2001 CERTIFICATION
Sales Double Digit Volume Growth
Internet Web Sales Booming
Sales Force More Time to Sell vs. Chasing Order Status
Op Margin Up 20+%
6 Sigma Fulfillment
GE PROPRIETARY
26 / 6 Sigma Overview24 November 2004
Customer Power Plant
On-Time Operation Date
'98Baseline
2Q'99 3Q'99 4Q'99 2000
On-time Reliability gives Customer 100 days more Electricity Sales
GE EnergyGE Energy - Delivery to Request
230
133
48
350Days
5 Days5 Days
302 Day Variation Reduction
302 Day Variation Reduction
1995 PRODUCTIVITY1995 PRODUCTIVITY
1997 PRODUCT DESIGN1997 PRODUCT DESIGN
1998 @ THE CUSTOMER1998 @ THE CUSTOMER
1999 FULFILLMENT1999 FULFILLMENT
2000 DIGITIZATION2000 DIGITIZATION
Six Sigma Evolution
2001 CERTIFICATION2001 CERTIFICATION
6 Sigma Fulfillment
GE PROPRIETARY
27 / 6 Sigma Overview24 November 2004
1995 1996 1997 1998 1999 2000 2001
Timeline
7Digitization at GE needsDigitization at GE needsSix Sigma ExecutionSix Sigma Execution
Focus :Focus :Automating Business Automating Business
ProcessesProcessesObjective :Objective :
Speed & Reliability on theSpeed & Reliability on theWeb @ Far Lower CostWeb @ Far Lower Cost
2000 Headlines
1995 PRODUCTIVITY1995 PRODUCTIVITY
1997 PRODUCT DESIGN1997 PRODUCT DESIGN
1998 @ THE CUSTOMER1998 @ THE CUSTOMER
1999 FULFILLMENT1999 FULFILLMENT
2000 DIGITIZATION2000 DIGITIZATION
Six Sigma Evolution
2001 CERTIFICATION2001 CERTIFICATION
Evolution in GE
GE PROPRIETARY
28 / 6 Sigma Overview24 November 2004
• No Visibility to Business Processes
• Lots of Buffers– Salespeople, Order Service
• Cost of Poor Fulfillment – Inventory/ Expediting
Before Internet
• Internet Provides Visibility• Differentiates Those Who
Can and Those Who Can’t• Highlights Internal Waste
(Buffers)• Cost of Failure – Fatal
Sell Make Service
Order Deliver
Internet World
Transactional Business Processes
Variation Reduction Key To Success In e-World
Digitizing GE
1995 PRODUCTIVITY1995 PRODUCTIVITY
1997 PRODUCT DESIGN1997 PRODUCT DESIGN
1998 @ THE CUSTOMER1998 @ THE CUSTOMER
1999 FULFILLMENT1999 FULFILLMENT
2000 DIGITIZATION2000 DIGITIZATION
Six Sigma Evolution
2001 CERTIFICATION2001 CERTIFICATION
GE PROPRIETARY
29 / 6 Sigma Overview24 November 2004
$600$500$450$380$200
$2.5B
$1.2B
$700
$170
CostBenefit1996
CostBenefit1997
CostBenefit1998
CostBenefit1999
CostBenefit2000
6 Sigma Cost6 Sigma ProductivityDelighting Customers
Results from 6 Sigma
$3.5B$500$500
$3.0B$3.0B
$600
$2.5B$2.5B
$900$900
$3.4B
Cost Benefit
2001
$3.4 Billion in 2001 … for Customers & Shareholders
GE PROPRIETARY
30 / 6 Sigma Overview24 November 2004
Resources integrated in the Businesses Global Database & Best Practice Sharing Common Approach / Tools Training & Certification on 6 Sigma skills On-line Self Tutoring & Reference Technical & Financial Sign off on Quality All Projects Measured with the same Rigor
Institutionalized Process Delivering Quality Earnings
Six Sigma Infrastructure:
Results from 6 Sigma
1995 PRODUCTIVITY1995 PRODUCTIVITY
1997 PRODUCT DESIGN1997 PRODUCT DESIGN
1998 @ THE CUSTOMER1998 @ THE CUSTOMER
1999 FULFILLMENT1999 FULFILLMENT
2000 DIGITIZATION2000 DIGITIZATION
Six Sigma Evolution
2001 CERTIFICATION2001 CERTIFICATION
GE PROPRIETARY
31 / 6 Sigma Overview24 November 2004
What Does Six SigmaSix Sigma Do For GE?
Changing the Company DNA
Drives Customer Centricity
Improves Product/Service Capability
Reduces Costs
Improves Performance Reliability
Foundation for e-Business/Digitization
Evolution in GE
e
@