Case 6: Implementing Six Sigma at GE Fauna Statement of the problem: * How was Gee’s corporate-level vision of Six Sigma put into practice at the GE Fauna manufacturing site? * What is the difference between direct labor savings and labor cost avoidance savings from a managerial perspective? We come up of different problems regarding the use of testing: They consume much in electricity They have expensive maintenance cost per oven They are paying high labor cost Objectives Create a practice for Gee’s corporate-level vision Differentiate direct labor saving with labor cost avoidance savings from a managerial respective.
To use the six sigma effectively To provide alternative course of action to lower the cost and eliminate SEES Areas for Consideration: Strength I Weaknesses I Opportunities I Threats I Implementing Six sigma I Employees might find it difficult to adjust I Cost reduction I Other companies can try to mimic their process I Failure setback to improve I I Lessening the percentage of having failures I I I High labor, maintenance and other cost I continuous improvement I costs of the company may still increase | $700 million annual sales I I Lot of improvements can be recess I Alternative Courses of Action: For Problem 1: .
They could use equipment to lower/lessen the consume of electricity Reduce the quantity of the equipment that uses. 2. They can eliminate testing and SEES. 3. 1 . Purchasing high quality ovens can help to lessen the cost of the company 2. Training for employees to use the equipment effectively and properly 3. They could eliminate testing and SEES for Problem 3 1. They could lower the salary of the employees 2. They could reduce/terminate the number of employees 3. They could eliminate testing and SEES. Conclusion:
The Gee’s corporate-level vision of Six Sigma for GE Fauna manufacturing site has been in improved all the way. For example they had concentrated on eliminating Environmental Stress Screen (SEES) to test on circuit boards and also eliminate premature failure in the boards. The field-control product line that has been analyzed and had collected data for them to determine if the final test was effective to the SEES with these data they can identify if there are false failures or dead on arrivals. The result was there was only 1 board that failed during the SEES that indicates that the final test is an effective screen.
Difference between direct labor savings and labor cost avoidance savings is that when we talk about “Direct labor savings”, it meaner receiving reduced current labor costs and as for “Labor cost avoidance savings” is savings that comes from expected increase in expenses. This increase could be due to opportunities driven from decisions and management, though additional expenses might not have been budgeted for directly and with the help of six sigma the company have a positive improvement. The company have a decreasing cost, because of test that results to 99. 99% success rate of production.
Recommendation: We recommend to fully use the six sigma program for the company. Errors and other cost will be reduced and results to high profit with a minimum cost company. High quality products will also be assured by the company. With high quality products, it may result to a high customer satisfaction and will lead to higher sales. If a problem arises, we must begin with a detailed assessment and analysis. Using the Six Sigma approach, we must first identify the root cause of the problem. Then, we must decide on what to do using some criteria for Judging different alternative