B&D hires executive for quality control GE's Liebert to head effort to improve products, cut costs

Manufacturing

October 17, 1998|By William Patalon III | William Patalon III,SUN STAFF

Black & Decker Corp. has tapped a General Electric Co. executive to head a corporate effort to improve product quality and save money by slashing waste.

Towson-based Black & Decker said yesterday that GE's Carl C. Liebert has been named to the newly created position of vice president/Six Sigma. He will join the company Nov. 1 and will report directly to Nolan D. Archibald, chairman and chief executive officer of Black & Decker.

Liebert, who has been at GE for 25 years, was most recently

general manager of the conglomerate's super-abrasives business.

"Carl Liebert is an exceptionally talented manufacturing executive," Archibald said in a statement. "He has achieved remarkable cost and quality improvements at General Electric."

In other developments yesterday, the company said its board of directors had authorized the buyback of an additional 1 million shares of its stock and declared a regular quarterly dividend of 12 cents per share, payable Dec. 28 to shareholders of record at the close of business Dec. 14.

Black & Decker shares jumped $3.0625 to close at $53.0625 yesterday.

Liebert's appointment is noteworthy for two reasons, said Janet C. Barnard, associate professor of management at the Rochester Institute of Technology's College of Business. First, she said, it shows that Black & Decker is making a companywide commitment to boost the quality of its products even as it seeks to reduce waste. And second, Liebert comes from GE, the company that is perhaps the best breeding ground for corporate managers.

"GE has always been a well-managed company," Barnard said. "GE has always been one of the great teaching experiences, learning experiences, for the kind of managers who want to move up the ladder at other corporations."

The new executive's charge will be to inculcate "Six Sigma," a quality initiative that relies heavily on measureable, statistical objectives and controls, throughout the company. Six Sigma is essentially a target that means being 99.9997 percent perfect. It relies heavily on the testing and measurement of hundreds of variables in the tasks a company conducts to make a product or provide a service.

Six Sigma is one of the latest management tools, joining total quality management, benchmarking and re-engineering as some of the methods U.S. companies are using to boost performance and cut costs as global competition intensifies.

Six Sigma proponents say it significantly improves the quality of the product or service a company is selling. Critics contend that it costs too much and keeps workers from doing their jobs because they are too busy being trained or collecting the voluminous data needed to calculate how well the company is doing.

But the results can speak volumes. To reach Six Sigma, a company can make only 3.4 errors per million opportunities. At the lower level of between Three and Four Sigma -- which equates to 99 percent perfection -- the error rate skyrockets.

For instance, according to a study done by USA Today, Three to Four Sigma would translate to 20,000 lost pieces of mail per hour, 5,000 incorrect surgical procedures a week, no electricity for seven hours per month and two short or long landings per day at each major airport.

Black & Decker's major businesses include power tools and accessories, fasteners, plumbing products and security hardware. The $3 billion-a-year power tools business has the beginnings of a Six Sigma program in effect and should see savings of $8 million this year, said corporate spokeswoman Barbara Lucas.

The fasteners business has a focused-quality program, though it's not labeled Six Sigma, she said.

Liebert's job will be to create a united front so that all of the company's businesses are using the same quality program. His position -- reporting directly to the chairman -- should give him the authority to do so, Barnard said.

As a "Six Sigma quality champion" at GE, Liebert played a leading role in increasing return on investment fourfold in that business and reducing its overhead costs by 50 percent over a three-year period, Black & Decker said.

Liebert previously held key manufacturing and plant-operations positions in the GE major appliance business.

Lucas said the stock buyback is in addition to a previously announced plan to repurchase 9.5 million shares over two years. In that bigger buyback, the company said it had repurchased 8.1 million shares at the end of the third quarter and thinks it will complete it by year's end.

The buyback announced yesterday is being conducted to offset shares being issued through stock options awarded to top executives as part of their compensation. It should take about a year to complete, the company said.

Pub Date: 10/17/98

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