Executive summary
The report will look at the general electric quality management as well as the history of the company and how it has successfully implemented its quality management methodology. First will be the history of the company so as to understand the business operations of general electric company. The report will also look at quality management in general by researching on the theory as well as research on the application in businesses. It will elaborate on the structure of the company and how it has enabled the company to achieve the success it has in quality management. A description of the quality management methodologies that have been used by the company will also be discussed in depth and how these methods have improved the quality of the corporation products and services. An analysis of the quality management methodology used by general electric will also be included including both the positive points and the negative points. Last but not least the report will provide recommendation that the company should adopt to improve the delivery of the services as well as the quality of the goods sold to both the local and the international consumers.
Introduction
General Electric is a multinational or as it has been referred, a global digital industrial company that was incorporated in 1982. Its origin can be traced back to 1889, and it is during this time there was a Thomas Edison, and he was known to have business interests in a lot of electricity-related companies in the United States of America at the time. Some of the companies were Edison machine works which were a manufacturer of the major electric motors and dynamos, the Edison lamp company that manufactured lamps, an electric lighting fixture, sockets and other electrical lighting devices manufacturing company known as Bergman and company among others. It was in this year 1889, that a company by the name Drexel, Morgan and company that financed and helped merge all the companies into one company known as Edison General Electric Company. The new corporation also acquired another company by the name Sprague electric railway and motor company.
The company was one of the first organizations to be listed in Dow Jones industrial average, and it is said that it is the only first firm that is still listed in the Dow index even though this has not happened continuously. General Electric did a first in many areas such as the formation of Radio Corporation of America which it used as its retail arm for radio sales. It was also the first to make the first demonstration of television broadcasts. The segments that can be found operating within the company are oil and gas, energy connection and lighting, power and renewable energy as well as health and aviation.
Customers
Up until 2016, general electric was estimated to be serving clients in over 180 countries around the world in different capacities such as power generation, health care, transportation and in others sectors such as aviation. The company has been able to expand its business globally even though it has faced some challenges as different countries have different macro environments. Political systems in countries that general electric does businesses have been a mixture of good and bad as some countries present a favorable environment for international companies while in other nations the case is different. Political systems such as elections, government structures are some of the challenges that general electric faces when dealing with international clientele.
Structure
The corporation’s structure according to research shows that the firm is a divisional company compared to horizontal structures in other enterprises hence its operations are more decentralized. This means that each division has its senior management that is charged with the operations of that division alone. A look at the general electric’s organizational chart, it will show that a division has its president and chief executive officer hence the company can contain a service or a product structure with that division. The company has been able to hire exception professionals who can continue with the company’s culture of integrity. In today’s business world that demands high standards, the company has been able to employ professionals who are committed to the company’s culture which is to provide high-quality goods and services across the world. The professionals are backed with a dedicated board that strives to embrace communication, comprehensive processes, policies and training to ensure all products are of top quality and surpasses the customers’ expectations. The Corporation has also adopted a development-focused culture as General Electric is a global leader in infrastructure, finance as well as in media for the last over one hundred and thirty years.
The company has also utilized technology to maintain the high-quality products that it is known for as other businesses follow. The use of advanced technology as well as the innovation of high-quality new products has helped the company lead in different fields that it is associated with. The high quality of goods has been achieved by ensuring that the firm’s technologies are up to date even when a new technology is introduced in the market. The company prides itself in turning creative ideas into products that solve the world’s most challenging problems by offering goods and services to its customers that are of high quality.
Objectives of the Project
The primary purpose of this report will be to evaluate and understand general electric’s quality management and how the company has been able to maintain such high quality for its products for such a long time. The report will also look at the history of the enterprise and how it has evolved over the years to become one of the largest companies in the world. It will discuss the culture that has been adopted by the business to achieve its quality management objectives.
Data will be collected by conducting interviews and researching the company and its operations. This will assist in getting both the theory of the quality management that is used by the corporation as well as getting first-hand information from professionals that work at the company. The report will also look at the past experiences of the enterprise that have to enable it to reach such a high-quality management index all over the world. The data will be collected using questionnaires as well as a face to face interview with top management of the company. The report will be organized to provide an overview on the company, its structure, customers, products, markets for the goods and services produced by the company as well as a description of how data used in the report was collected. The report is also organized in a way that different quality management methods have been used by the company as well as the analysis of these quality management methods.
Quality Management
It is through quality control that a corporation can ensure that its products and services are consistent with the customers required. With the four elements, a company will be able to plan on the quality that it wants the products and the services offered to the customer should be as well as put measures that will achieve the set quality standards for the goods and services. The company should also be able to control the set quality for an extended period so as to ensure consistency with the products and services that are being offered to customers as this leads to customer loyalty. With competition and the changes in technology that are being witnessed in today’s world, it is imperative that a company works towards improving the quality of products and services that are being offered to the customer. This will ensure the corporations stays ahead of the competition and attracts more customers (JAIN 2001 p. 4).
Total Quality Management
Having a total quality management system is crucial as it provides a set of policies, processes, and procedures that the firm will use in planning and execute its operations so as to produce quality goods and services. A total quality management approach will ensure that all department and in this case all the general electric segments are on the same page when it comes to quality management. The principles of quality management system are customer focus. The main aim of quality management is to meet the customers’ expectations as well as surpass them. Management can use customers’ expectation to improve the quality of the products and services that it is offering. The rationale to this is that a company should be able to understand its customers. For a company to be the success, it should be able to attract and retain customers’ confidence as all of the customers’ interaction with the company is an opportunity for the company to create more value for the consumer. A corporation should focus on the understanding that current and the future needs of its customers as this will enable the firm to improve the quality of the products and services hence customer loyalty (JAIN 2001 p. 6).
The leadership at General Electric created a unit of purpose and direction as well as had conditions within the organization that enabled employees to engage in attaining the company’s quality goals. This allowed the firm to come up with policies, strategies, processes and resources to achieve the set-out quality objectives. Engagement with the employees happened at all levels or segments hence it created empowerment, competent and engaged individuals who were essential to creating and delivering value in products that the company was producing. Processes were meant to interrelate with one another enabling the business to optimize the quality management system. For a company to be as successful as general electric, it focused on continuous improvement of the quality of products and services.
The production of superior goods and service was guaranteed in General Electric by having a total quality management mechanism in place. For a product to be of superior quality the firm looked at its durability, reliability, and performance hence it set the company’s products above its competitors and this was essential in achieving the desired consumer satisfaction to ensure customer loyalty for the firm’s products and services. Successful businesses do not only rely on the new customer but also the old ones who have trust in the products and service because of the quality. A satisfied customer is more likely to return for the company’s products since he or she was happy with the product or the service offered.
For a corporation like General Electric to design and create products which consumers want and desire, having an elaborate quality management method will be crucial for any company. The company was able to deliver products they had promised their customers ensuring that they were durable and according to the specifications given by the consumers. Quality management increased revenues and higher productivity for the corporation as operations were running effectively. General Electric also looked at employees’ satisfaction by ensuring that salaries were paid on time. Satisfied employees will be motivated to put all their efforts in producing goods and services that are of high quality as well as ensure customer satisfaction. Last but not least, total quality management at General Electric reduced waste in processes in the organization. This was achieved through coordination between employees in a different department in the organization.
Six Sigma
This is a data driven method that is used in most companies to eliminate defects on products and services that will be sold to the consumer (TENNANT 2001, p. 3). The primary goal of the six sigma is to improve the quality of the output of a process, and this is achieved through the identification and elimination of the causes of defects that may occur in a product as well as minimization of variables that may occur during manufacturing and in the business processes. This strategy has quality management strategies, both empirical and quantitive and uses a specific set of steps to achieve the main objectives. The six sigma can achieve definite value targets.
Some of the goals that can be achieved through six sigma strategy varies in terms of outputs, processing time, reduced time and costs as well as increased customer satisfaction. The purpose of Six Sigma is to produce products that are free of a defect (3.4 defective features per million opportunities). Anything that is outside a customer’s specifications is considered a six sigma defect as the primary objective of the six sigma is to implement a measurement-based strategy that will be able to focus on process improvement so as to achieve the consumer’s specific requirements.
Some of the advantages of the six sigma methodology are that it is customer driven as a company that employs the methodology will be able to produce a defect free product for the consumer. A company that has implemented the six sigma methodology in its operations is bound to increase profitability and reduce costs hence the improvement that is associated with six sigma will lead to financial benefits for the company. The strategy can also be implemented in every aspect of the GE such as the stock value growth and ROI. This is a progressive methodology compared to other quality management methods since its main objective is the prevention of defects and not rectifying them. This lean management has been adopted by many other organizations. It also aims at improving the process in a company rather than the outcome (TENNANT 2001, p. 14).
General Electric has adopted the six sigma methodology as the tool that company uses in its quest to achieve high-quality management index for its products and services. It was adopted in the 1990s by the then-CEO Jack Welch who believed in the infinite capacity to improve everything. According to Welch, the company needed to improve the quality of its products and services as well as prepare for future profitability even though at the time the company was still leading and making profits. This has led to its share being the most highly valued in the world at the time and currently. The three most important target areas for general electric were to reduce defects, reduce cycle time and improve customer satisfaction. On the corporation’s website, the company states that the way consumers used to do business has changed due to globalization and technology hence consumers nowadays have access to information and little room for error.
The six sigma just means that the company is able to investigate the defects and implement its strategic plans aimed at improving the quality and minimizing the number of reported cases as a way to improve efficiency. After adopting the six sigma strategy, the company was able to gain seven hundred million in corporate benefit within the first two years. General Electric applied the six sigma methodology in four ways, which are; Training whereby employees at general electric were trained about the six sigma program and asked to complete a project implementing those methods. Mentoring whereby general electric hired black belt six sigma professional that are required to train and mentor employees whose positions are crucial to fundamental processes. After the training, the employees became black belt six sigma professional and would go around implementing different six sigma projects within the company. Leadership was the other way that general electric implemented the six sigma strategy as both the management and workforce was required to commit to the program and promotion would be done based on the improvement of quality.
Analysis
Quality management has been there since time immemorial as it has evolved over time to total quality management and the six sigma strategies that are being used by different companies around the world. It is imperative to note that quality management in most cases is to the benefit of the customer even though companies end up being the larger beneficiaries as they increase their profits. General electric company has been a leader in quality management as its six sigma application has been successful as the company is able to offer products and services to the customers that are of high quality compared to companies that use other quality management methods such as total quality management. According to the company’s president, since the adoption of the six sigma to the corporations operations, quality management has improved making the company more successful. The tremendous success has been attributed to the company’s employees who due to the relentless efforts in their respective segments that the company uses to divide its operations, each employees has been taught about six sigma and its application hence the application of six sigma in the firm’s operations comes naturally for the employees.
At first just like many other companies in the late 80s and early 90s, general electric used total quality management to ensure that the products and services offered to its customers were of high quality. After motorolla introduced six sigma in its operation so as to minimize the defects in its products, the then CEO of general electric quickly realized the potential of six sigma in ensuring quality standards were as high as possible for the company’s products and services and in minimizing defects in products. Black belt six sigma professional were hired to train the company’s employees about six sigma. The employees would then go on to teach their colleagues hence the culture of six sigma quality management would be associated with the company as it became better in producing quality products and service for its customers worldwide.
The international society has set up standards of quality that different products and services should achieve as they are being sold to the consumers. For companies that have adopted different strategies in quality management, it is important to note that it is through quality management that the organizations have been able to retain loyal customers and build reputable brands. General electric’s quality management tool, the six sigma has propelled the company to greater heights even there has been some criticism of the methodology. It has been critiqued for its continuous requirement of a skilled workforce; it has been seen to waste time in processes that are not profitable, while others have argued against its emphasis on the rigidity of production process which would hinder creativity and innovation that is expected from manufacturing companies.
Conclusion and Recommendations
Recommendations for any company would be to train employees on quality management method that the company has adopted so as to ensure products and services offered to customers are of high quality. The quality management methodology that any company adopts should be focused on the customers and his or her needs as this will ensure customer satisfaction as well as loyal customers who trust the company’s products and services. The management should provide an enabling environment that will also advocate for innovations even when the quality management system is too rigid for creativity as this will put the company ahead of its competitors.
It is imperative for companies to adopt quality management mechanism that will work for the business as seen in the case of general electric. Quality management will enable the company to increase its revenues while on the other hand reducing costs. It is by the provision of quality products that a company will be able to retain customers and attract new ones as well as build a reputable brand. Offering quality products and service should be the primary focus for any management at any company, and this can be achieved by having a quality management system that is customer oriented as this will lead to customer satisfaction. Recommendations would be to train employees on the importance of quality management and how to improve processes in the organization.
References
Eckes, George. The Six Sigma revolution: How General Electric and others turned process into profits. John Wiley & Sons, 2002.
Henderson, K.M. and Evans, J.R., 2000. Successful implementation of six sigma: benchmarking General Electric Company. Benchmarking: An International Journal, 7(4), pp.260-282.
JAIN, P. L. (2001). Quality control and total quality management. New Delhi, Tata McGraw-Hill.
Kwak, Y.H. and Anbari, F.T., 2006. Benefits, obstacles, and future of six sigma approach. Technovation, 26(5), pp.708-715.
TENNANT, G. (2001). Six sigma: SPC and TQM in manufacturing and services. Aldershot [u.a.], Gower.
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