What is six sigma Approach?

Six Sigma is a set of techniques and tools for process improvement. It was
developed by Motorola in 1986. Jack Welch made it central to his business strategy at General
Electric in 1995. Today, it is used in many industrial sectors.
Six Sigma seeks to improve the quality output of process by identifying and
removing the causes of defects (errors) and minimizing variability in manufacturing and business
processes. It uses a set of quality management methods, mainly empirical, statistical methods,
and creates a special infrastructure of people within the organization who are experts in these
methods. Each Six Sigma project carried out within an organization follows a defined sequence
of steps and has quantified value targets, for example: reduce process cycle time, reduce
pollution, reduce costs, increase customer satisfaction, and increase profits. Six Sigma at many
organizations simply means a measure of quality that strives for near perfection. Six Sigma is a
disciplined, data-driven approach for eliminating defects in any process from manufacturing to
transactional and from product to service. The fundamental objective of the Six Sigma
methodology is the implementation of a measurement-based strategy that focuses on process
improvement and variation reduction through the application of Six Sigma improvement
projects. This is accomplished through the use of two Six Sigma sub-methodologies: DMAIC
and DMADV. The Six Sigma DMAIC process (define, measure, analyze, improve, control) is
an improvement system for existing processes falling below specification and looking for
incremental improvement. The Six Sigma DMADV process (define, measure, analyze, design,
verify) is an improvement system used to develop new processes or products at Six Sigma
quality levels. It can also be employed if a current process requires more than just incremental
improvement.

Why was six sigma quality initiative was taken in GE?

Welch (GE) asked Gary Reiner, vice president for Business Development to
lead a quality initiative for GE. Reiner undertook a detailed study of the impact of six sigma at
companies like Motorola and AlliedSignal. His study concluded that GE was operating at error
rate ten thousand times the six sigma quality levels of 3.4 defects per million operations.
Furthermore his studies estimated that this gap of errors was costing the company between 8 to
12 million a year in inefficiencies and lost productivity

How much successful it was?

Six Sigma participation was not optional, and Welch tied 40% of bonus to an individuals
Six Sigma objectives. To provide managers the skills, Reiner designed a massive training of
thousands of managers At the April 1999 Annual Meeting, Welch announced that in the first two
years of Six Sigma, GE had invested $500 million to train the entire professional workforce of
85,000. In addition, 5,000 managers had been appointed to work on the program full-time as
Black Belts and Master Black Belts, leading Welch to claim they have begun to change the
DNA of GE to one whose central strand is quality. Returns of $750 million over the investment
exceeded expectations, and the company was forecasting additional returns of $1.5 billion in
1999 . Clearly delighted by the program, Welch stated, In nearly four decades with GE, I have
never seen a company initiative move so willingly and so rapidly in pursuit of a big idea.