Why Did No One Notice that GE Was Not Known For High Quality Manufacturing?

Executive Summary

• With the decline of GE, the question is how Six Sigma proponents react.
• One question that surfaces is why if GE was so quality-focused, was GE not known for high-quality items?

Introduction

There was an enormous amount of build-up around how GE used Six Sigma to improves its businesses. However, as soon as one checks the evidence, there is little to support the idea that GE had higher quality than competing manufacturers.

Responding to Criticism of Six Sigma

In the article How Will the Decline of GE Impact Six Sigma?, I was asked the following question.

Where’s Ken Crozier when you need a thorough response, Shaun, Or maybe Frank Dichoza will respond? – Jeff Beaudin

I simply assumed that they would not want to respond. Six Sigma devotees will look for people that are not skeptics and work on them instead. There are still a ton of people who are open to listening to the Six Sigma pitch.

The Inaccurate Evidence for Six Sigma

This comes back to a central problem. Not checking the evidence.

If the evidence had been checked, Six Sigma would never have grown to what it became. There is also a deception algorithm at work.

1. If you question the statistical validity, you get pointed to the case study of GE.
2. If you question whether GE ever attained Six Sigma, or it benefited from Six Sigma, you get pointed to the Japanese quality principles.
3. If you question whether the Japanese ever implemented anything like Six Sigma, you get pointed back to the fact that it is based on “scientific” statistical principles. 

This is expressed as follows by Dr. Tony Burns.

There never was any evidence Shaun.  It was just Harry with his laughable articles that no one ever bothered to check. 

An Inconvenient Truth for Six Sigma

One question to answer — why is GE not known for improving its industrial operations and manufacturing under Six Sigma? GE continued to make things after Welsh was hired, but it’s not at all clear that these items were known for higher quality than competing options. And in some cases, they were known for lower quality. Let us take several lines of business.

• GE Jet Engines: While GE does not appear to have problems with quality, the quality leader in jet engines is usually considered to be Rolls Royce, not GE.
• GE Appliances: GE Appliances was known for making great products that lasted a long time. But this was in the 1950s and 1960s and 1970s. That is before Jack Welsh appeared. How did those pre-Six Sigma nincompoops make such great appliances?
• GE Lighting:  GE’s lightbulbs are not higher quality than competing bulbs. And light bulbs and fluorescent tubes are repetitive manufacturing — and are not that difficult to make well. But even here, as I will discuss in a moment, GE is below average versus competitors. 
• GE Captial: Not a manufacturer, but it should be noted that GE Capital has been routinely accused of and caught perpetrating financial fraud, indicating that they are a very low-quality provider.

Consumer Reports rates lightbulbs. So I checked the ratings of GE lightbulbs versus other lightbulbs. As you can see here, their top-rated bulb in the 60-watt category is FEIT. 

GE Lightbulbs Lag Competitors According to Consumer Reports

Overall I found that GE not only did not produce a top lightbulb in the Consumer Reports rankings, but its lightbulbs were rated below average. If we have heard so much about GE’s quality levels, why have we also not heard about FEIT Electic or Sylvania or Philips or other lightbulb manufacturers that scored better than GE? (at least according to Consumer Reports).

GE Lightbulbs Lag Competitors According to Amazon Reviews

GE Lightbulbs also did not score as well on Amazon in their reviews as competitors.

This is not as rigorous of a way to determine product quality, but again, GE lightbulbs are not the top-performing lightbulbs in user reviews on Amazon. Philips, a company that scores above average on Consumer Reports, also does very well on Amazon ratings. GE lightbulbs are generally lower-rated that several other competing brands. 

FEIT was the top-rated bulb on Consumer Reports, and when we check Amazon, they again tend to have highly rated bulbs. 

Does FEIT Electric Engage in Six Sigma Practices to Attain Their Quality?

We checked online for any references to FEIT and Six Sigma.

There aren’t any.

Companies that engage in Six Sigma usually advertise this fact, and it is easy to pick up articles about their Six Sigma programs.

Is it possible that FEIT is achieving quality levels that GE cannot attain with their bulbs — and doing so without Six Sigma?

Confusing Quality Input With Quality Output

Increasingly it appears that the entire obsession around GE and quality was never measured in terms of the output. However, the output is an important feature, not the input. An evidence-based approach does not fall in love with the input and the method, and then determine that the technique must be good without first looking at the output.

A far, more effective approach is to simply observe which companies produce the highest quality items. They may not be the companies that are making the most noise or trying to position themselves for Wall Street (as was GE). This requires no knowledge of either manufacturing or statistics. The only thing necessary is the interest in observing the quality of the output from each of the entities.

As the evidence is presented for their quality output, and if the quality is significantly higher than their competitors, then at this point, it makes sense to evaluate the method that they used to arrive at that quality output.

Rating GE’s Quality Evidence by Their Major Companies or Divisions

That is, there is little doubt that GE implemented Six Sigma — in fact, people were fired from GE if they did not support Six Sigma. However, there is no evidence that this leads GE to produce higher quality products than competing entities.

Let us review the rating of some of the primary GE businesses again to provide an evaluation in terms of how the general quality level compared to competitors.

So here is the score.

1. GE Jet Engines: GE is worse than RR, but I don’t know if they are average or worse than average — but they are not the best.  (3 out of 5)
2. GE Appliances: GE appliance was not poor quality, but the GE Appliance brand significantly declined under Six Sigma (3 out of 5)
3. GE Lightbulbs: GE is worse than average. (If we just take the CR rating.) (3 out of 5)
4. GE Capital: GE is far worse than average. (1 out of 5)

Now let us tabulate. 3 + 3+ 3 + 1 = 10. 10/4 = 2.5. GE has lower quality than average versus competitors averaging across these divisions.

Remember the claims of Six Sigma. Enormous improvements in quality that dropped directly to the bottom line. This required immediate and unquestioning alignment with Six Sigma? Should anyone go to Six Sigma training for a 2.5 out of 5?

Measuring the Quality of Output of Other GE’s Businesses

GE owned other businesses, including oil and gas businesses, that is a bit difficult to measure in terms of quality, NBC, which again, is more a question of taste rather than measurable quality. However, there appears to be no evidence of superior quality in the output of GE, and there is evidence that GE was actually below the quality of competitors.

Conclusion

The question that should be asked is, “why was this topic never brought up in the media or Six Sigma coverage?”

When someone discussed Japanese quality, the output is evident. For people that have owned Toyotas and Hondas (but not necessarily Mazdas or Nissans), the quality is apparent in both general usages and independent ratings of quality, such as with Consumer Reports.

However, when has GE been known for the quality of its output?

How can decades go by, with the proposal being that everyone needs to apply a quality method called Six Sigma, the leading proponent of which has no quality advantage in output, and a quality disadvantage versus competitors? When Six Sigma proponents presented the fact that GE implemented Six Sigma in all of their divisions, the correct answer should have been.

“Yes, they did, but there is no evidence that it actually lead to higher quality output, and under GE’s Jack Welsh/Six Sigma reign, the evidence is just the opposite that quality went down.”

References

https://www.consumerreports.org/cro/lightbulbs.htm

https://www.linkedin.com/pulse/six-sigma-psychology-part-2-tony-burns/