Running head: AN ANALYSIS OF GENERAL ELECTRIC’S QUALITY PRACTICES
An Analysis of General Electric’s Quality Practices
by
Brian Abbott
Michael Baker
Leshawn Boyd
Todd Camp
Nathaniel Greenwood
Robert Guthrie
Embry-Riddle Aeronautical University
Management 532
AN ANALYSIS OF GENERAL ELECTRIC’S QUALITY PRACTICES
Abstract
This paper analyzes the history and modern state of Lean Six Sigma and Quality Initiatives at
General Electric (GE). Through a brief history of the company, we can see how GE arrived at its
current state as a leader in the Quality Improvement arena. We discovered that GE pioneered the
Lean Six Sigma process, primarily driven by former CEO Jack Welch. Initially investing
millions of dollars and thousands of employees, GE saw this investment returned in a very short
period of time. Implementation of Quality Improvement processes led to major gains in multiple
sectors of GE’s market. This is illustrated by GE’s performance compared to industry averages.
Showing their willingness to go further than required, GE’s Military and Aerospace group
incorporates at least 9 various industrial quality standards into its manufacturing. Our research
discovered that GE has also revamped its corporate structure, embedding Lean Six Sigma trained
personnel in all levels of the company and weaving process improvement methodologies into the
very fiber of GE itself. Based on our findings, their willingness to go above and beyond and
invest in quality has allowed GE to remain at the forefront of its market and if history is any
indication, it will remain there for the foreseeable future.
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AN ANALYSIS OF GENERAL ELECTRIC’S QUALITY PRACTICES
Table of Contents
Lists of Tables…………………………………………………………………………………………………………………………… 4
List of Figures………………………………………………………………………………………………………...……..……..…. 4
Introduction……………………………………………………………………………………………………………………………… 5
Description of research setting and the quality initiative..……………………………………………...7
Research Setting………………………………………………………………………………………………………………………………. 7
Jack Welch and the Quality Initiative……………………………………………………………………………………….. 7
Analysis……………………………………………………………………………………………………………………..……..…….... 9
Investing in people…………………………………………………………………………………………………………………………… 9
Leading by Example…………………………………………………………………………………………………………………….... 10
Outlining Findings…………………………………………………………………………………………………………....….. 13
Summary and Recommendations……………………………………………………………………………...……... 14
References……………………………………………………………………………………………………………...……..…….... 16
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AN ANALYSIS OF GENERAL ELECTRIC’S QUALITY PRACTICES
Lists of Tables
Table 1: GE vs Industry Average ROA, ROI and ROE………………………………..…….……..12
List of Figures
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AN ANALYSIS OF GENERAL ELECTRIC’S QUALITY PRACTICES
Introduction
Since 1878, General Electric (GE) has made itself a dominant figure and company by creating
products that draw the attention of consumers. GE has been introducing some of the most
innovative products in numerous markets for centuries. From electrical equipment and
accessories to aircraft engines to magnetic resonance imaging (MRI) equipment this company
has proven itself to be one of the leaders in innovation.
General Electric Early Years (1878-1945)
General Electric started off, as a simple electrical company that created simple life
changing appliances, such toasters, and power needs, such as the first practical incandescent light
bulb, to their consumers. GE furthered its company’s growth by looking into the markets that
needed key pieces of equipment to further their growth and product development. With the
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