At the core of GE's pursuit of excellence is a statistics-heavy quality technique discovered close to 3 decades back. Only, the company uses it as a business-focused management tool. Say hello to Six Sigma Ver. GE.

By R. Sukumar

The young engineer scratches his week-old stubble as he, almost gleefully, narrates what happened when the Enterprise Resource Planning (ERP) package at the global headquarters of GE Medical Systems at Milwaukee (US) went live. ''Their entire system crashed,'' ends the man who has had very little sleep for the past week, and whose business-card reads Black Belt. At GE, a Black Belt is a person who works full-time on Six-Sigma Projects, and a Green Belt, one who works part-time on them. And there's a reason behind the engineer's obsession with ERP: he's part of the team that is implementing ERP at the Pune-based GE Medical Systems X-Ray (South Asia). But with a few hours remaining for the system to go live, he isn't showing any signs of nervousness. His team has used the DFSS (Design For Six Sigma) methodology to ensure that they get things right the first time.

Six Sigma, which derives its name from Sigma, the statistical measure of standard deviation, is, essentially, a variance-reduction technique that ensures a defect-free level of 99.99966. Expressed otherwise, if there are 4 critical characteristics (taking the right fairway shot, teeing, chipping, and putting) that are involved in 'parring' a hole, a 3 Sigma golfer (defect-free level: 93.31 per cent), has a 0.7 per cent chance of achieving a par-score in a 18-hole course; a 6 Sigma golfer, a 99.97 per cent chance.

To the rest of the world, Six Sigma may be a quality tool. To GE it is much more: it is a management technique that can be used to achieve almost any business-objective. Thus, K.V. Ramaswami, a 31-year-old code-jock turned Master Black Belt, who is the MBB (Distribution & Staff Functions) at Wipro-GE Medical Systems' software unit in Bangalore, was part of a team that used Six Sigma to acquire a Capability Maturity Model (CMM) Level-5 certification-the highest recognition of software quality. G. Ramesh, 39, Vice-President (Europe Relationships) GE Capital International Services, turned to a DFSS project during his stint with GE Capital's subsidiary, Countrywide Consumer Financial Services, when it wished to increase its reach from 33 to 67 branches, and then to 100-in a mere 6 months.

And Vikas Bhalla, a 28-year-old Black Belt, who, along with 5 others, was hired by General Electric International Operations Co. Inc., the centre of GE's operations in India, to implement Six Sigma projects across businesses, used Six Sigma to reengineer GE Plastic's OTR (Order To Remittance) cycle-the sequence of operations from the time a customer's order reached the company, to the time, the customer receives the product, and sends in the payment to the company.

If there is one thing that stands out in GE's use of Six Sigma it is the ability to integrate the technique with its existing management practices like Work Out, where the company brings teams together to brainstorm, arrive at decisions, and try to find easier and better ways of doing things. ''It was just a natural for Six Sigma,'' exclaims Scott Bayman, 52, CEO, GE International Operations Inc.. ''We think that's one of the reasons why we have been able to take this concept beyond what Motorola and AlliedSignal have done. In applying it to not just product quality but to quality in everything we do.'' Indeed, there are 4 unique aspects to Six Sigma @ GE: processes; organisation; customer-focus; and leadership. The first, process-focus, is the pre-eminent factor behind the company's success, but the others have a role to play too. And it is this quadra-centric focus that makes Harry's brainchild work for Welch's company like it does for no other.

6 sigma processes

Everything, the various GE businesses believe, is a process-either an existing process that has to be reviewed and made more efficient; or a new one that needs to be created to accomplish a business objective. If it is the first, GE uses the DMAIC methodology: Defining the project CTQs (Critical To Quality factors) and a detailed map of the process; Measuring the desired Ys (outcomes); Analysing the critical Xs (the variables affecting the Ys); Improving the Xs; and Controlling the process. If it is the second, GE uses the DMADV methodology: Defining the business objective; Measuring and prioritising customer needs; Analysing process-design options; Designing the new process; and Verifying the functionality of the design. The DMADV template is also referred to as DFSS.

Not convinced? Gaurav Chhabra, a 28-year-old Assistant Vice-President (Operations) at Countrywide, who has since relocated to Stamford to be part of GE Capital's global e-commerce team, was part of a team that worked on a DFSS project on customer retention. Claims Chhabra: ''We had in-depth focus groups of customers, found out what they wanted, and delivered to them exactly what they wanted.'' The result: a 35 per cent retention rate. The focus on processes isn't without reason. As every manager knows, businesses revolve around processes.

Sounds easy, doesn't it? But the process of implementing a Six Sigma project, especially a DFSS one, isn't as simple as it sounds. For the OTR project at GE Plastics, Bhalla started off by defining the scope of the project and drew up a detailed multi-divisional process plan. The company formed a team of the best people it had in finance, sales, manufacturing, and demand planning to work full time on the OTR project.

The Measure phase of a DFSS project does not measure process efficiency; instead, it measures what customers (both internal and external) expect from the process. In the Analyse stage, the team developed an alternative design. Three inputs went into this: knowledge of the existing process, an alignment of the new process with the ERP, and details of both supply side and demand side transactions. The rest, designing the process and verifying that it did indeed achieve what it set out to, was relatively easy. Explains Lex Hoekstra, 53, CEO, GE Plastics: ''BPR gives you a theory or an ideology along which you should restructure your processes; DFSS gives you that, and a structure.'' Last word: 6s@GE works better because the company uses it not just to make processes efficient but to create efficient processes. And organisations: the GECIS (GE Capital International Services) facility in Gurgaon (near Delhi), which serves as a call centre and a financial services processing hub for GE Capital's businesses across the world, was built as a 5s Beta site (the highest possible) using DFSS.

The 6 sigma organisation

In brown slacks and a white polo shirt emblazoned with the GE and the 6s logo, V. Padmanabhan looks every inch the executive on a week-end outing. Only, it isn't the week-end, and Padmanabhan is in Pune at the GE Medical Systems X-Ray facility, helping crack a knotty operational issue. But 'Paddy,' as almost everyone in the office calls him, does not work there; he is General Manager (Operations) at Wipro-GE Medical Systems' Bangalore facility. ''Didn't I tell you? We're truly a boundary-less organisation,'' grins the 45-year old Padmanabhan.

Companies are, typically, structured around functions, businesses, and geographies. Add to the complexity of a multi-company, multi-business organisation like GE, the extra dimension of the organisational-template required for 6s processes, and the result could be sheer chaos. At GE, it isn't. And the boundarylessness of the company, something Jack Welch was speaking about long before he got GE to embark on its 6s journey, is what makes it so.

Within the businesses themselves, the responsibility for the 6s projects is vested with the people who matter: the business heads. Explains D.A. Prasanna, 51, CEO, Wipro-GE: ''Initially, we started with a departmental type of approach to 6s. But now, the ownership of 6s has moved to every business leader. Thus, we do not have a large 6s department. But there are large 6s engagements.'' Last word: 6s @ GE works better because it is practised by the people who work on business processes, not 'corporate-quality.'

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