Page 66 - The Handbook for Quality Management a Complete Guide to Operational Excellence

52 B u s i n e s s - I n t e g r a t e d Q u a l i t y S y s t e m s A p p r o a c h e s t o Q u a l i t y 53

capacity could not satisfy customer demand. The Six Sigma methodol-
ogy was employed to increase the production rate by 30 percent, with
little to no additional costs. Mike Bonsignore, Honeywell CEO, pointed
to the successful merger and integration of Allied Signal and Honeywell
(viewed as a best practice benchmark by merger experts) as yet another
example of a process improved by the application of Six Sigma tools.
General Electric, under Jack Welch’s leadership, began their Six Sigma
journey in the fall of 1995 after learning of Allied Signal’s successes from
Larry Bossidy, a former GE Vice Chairman and friend of Welch’s. Their
successes are perhaps the best documented:
• GE reported capacity improvements of 12–18 percent, a rise in
operating margin to 16.7 percent, and $750 million in savings.
(General Electric 1998 Annual Report to Shareholders)
• GE Plastics Singapore team, starting in July 1996, reduced color
variation in plastic products. The team raised quality from 2 sigma
to 4.9 sigma over 4 months, saving $400,000 a year for one plant.
(Slater, 1999)
• In 1996, their first year of Six Sigma deployment, GE Plastics
achieved benefits of $20 million. This is quite impressive given that
the first year training costs substantially exceed subsequent year
costs.
• A Six Sigma team at GE Capital Mortgage Insurance used Six
Sigma methodology to cut defects 96 percent. Claim payments
were reduced by $8 million, while borrowers were offered alterna-
tives to foreclosure. (General Electric 1997 Annual Report to Share-
holders) Overall, GE Capital reported a 160 percent increase in
new transactions.
• GE Aircraft Engines in Canada reduced custom charges, and cut
delays at the border by 50 percent, using Six Sigma tools to reduce
defects in the paperwork needed when parts are imported into
Canada. (General Electric 1997 Annual Report to Shareholders)
• GE Medical Systems developed a new ultrasound technology that
allows medical personnel to more clearly diagnose risk factors
contributing to stroke. This technology became available two years
earlier than otherwise possible, due to GE’s Design for Six Sigma
deployment.
This list of companies benefiting from Six Sigma deployment is far
from complete. Many other companies have implemented Six Sigma tech-
niques, including industry leaders IBM, Bombadier, Asea Brown Boveri,
DuPont, Compaq, and Texas Instruments. As with GE, Motorola, and
Allied Signal, these companies have benefited from Six Sigma deployment
across their operations, in both service and manufacturing applications.

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