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


•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


Our process rigor and ability to deliver can create growth capacity.

Invest inGrowth

ProcessRigor

Productivity& Cash

Capital efficiencySimplificationSix SigmaDigitization

GE PROPRIETARY


What Is Six Sigma? Measure of Quality

Process For Continuous Improvement

Enabler for Culture Change

GE PROPRIETARY


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


1) Improved ControlDDMMAAIICCProcess for Improvement

On Average the Process is great - the Issues lie with the Variation

DefineDefine MeasureMeasure AnalyzeAnalyze ImproveImprove ControlControl

GE PROPRIETARY


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


Design For Six SigmaDesign For Six Sigma

DDFFSSSS3) New Process

Process for Improvement

New Process Development -Creating 6 Sigma Process Capability

GE PROPRIETARY


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


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


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


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


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


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


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


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


From the most powerful Aircraft Engine ever built—the GE90-115B…

GE PROPRIETARY


To diagnostic imaging at the molecular level…

GE PROPRIETARY


To the first all-digital heart hospital…

GE PROPRIETARY


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 1996 1997 1999 2000 2001 2001+

Timeline

1998

Evolution in GE

Six Sigma Evolution

GE PROPRIETARY


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






Six Sigma Evolution


Customers Gain Productivity….GE Rewarded with Share

GE PROPRIETARY


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 1996 1997 1998 2000 2001 2001+

Timeline

1999

Evolution in GE

Six Sigma Evolution

GE PROPRIETARY


On TimeOn Time

6 Sigma Fulfillment






Six Sigma Evolution


Delivery to Customer want date

And how late?

But how early ?

GE PROPRIETARY


On TimeOn Time

h




19991999 FULFILLMENT FULFILLMENT


Six Sigma Evolution


Reducing Variation to Meet Customer Request

6 Sigma Fulfillment

GE PROPRIETARY


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





Six Sigma Evolution


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


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






Six Sigma Evolution


6 Sigma Fulfillment

GE PROPRIETARY


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






Six Sigma Evolution


Evolution in GE

GE PROPRIETARY


• 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






Six Sigma Evolution


GE PROPRIETARY


$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


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






Six Sigma Evolution


GE PROPRIETARY


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

@

24 November 2004 6 Sigma at GE

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