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Six Sigma Concepts

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									     Six Sigma




Process Improvement
   Methodology TM




        1
                     Purpose




   Provide An Overview of Six Sigma
   Layout the Process Improvement MethodologyTM




                        2
                Code of Conduct


   Please listen as an ally…
   If you have a question at any time, ask!
   Use name tents
   Please be prompt in returning from breaks
   Turn off the mobile/pager system while in
    training




                         3
                   Expectations


   You will have a better understanding of Six Sigma

   What are your expectations for this session?




                          4
                  !!!!!Quality!!!!!

   Conformance to dimensions, fit, form,
    requirements, use, Customer Satisfaction.
   Problem solving

    • Condition of output
    • Changing gaps between good & bad.

      • Solutions are engineered well with statistical
        guidance to Engineering.
      • Who created problems in the first place could not
        be used to solve it


                              5
              Pursuit of Quality




          Inspect for Quality

                                Statistical
                                 Process
                                 Control          Process
                                (Deming)          Modeling
                                                  (Taguchi)

                                    Design for
                                    Six Sigma

1930   1940   1950     1960     1970       1980   1990    2000



                           6
             !!!!!What’s new!!!!!

   Active Leadership
   Integration with strategy
   Quality net income
   Special Matrics
   Special roles
   Project Management
   Facts decide not judgement.
   Alignmenet of drivers & behaviour
   System Approach
   Remuneration linkage with six-sigma initiatives.

                          7
                     Six Sigma



   Sigma Breakthrough Technologies has a proven
    track record
   Methodology that is unique, systematic, proven,
    simple, lasting




                         8
                 Objectives


*   What Is 6 Sigma ?


*   Why Are We Doing 6 Sigma ?


*   How Are We Deploying 6 Sigma ?




                        9
                 Objectives


*   What Is 6 Sigma ?


*   Why Are We Doing 6 Sigma ?


*   How Are We Deploying 6 Sigma ?




                        10
                   What is Six Sigma?
   An approach to sustainable breakthrough
    improvement that:
       Fosters a common language and cross-functional
        cooperation within and between divisions
       Strengthens our productivity efforts
       Develops our process improvement core competency
       Uses statistical tools for significant variability reduction
       Helps
          Develop expert personnel and future leaders

          Increase capacity with minimal capital

          Meet productivity goals

          Improve customer service




                                11
             Six Sigma Focus

 Improving performance by flawless execution
  Achieving rapid breakthrough improvement
Applying advanced breakthrough tools that work
  Making a positive and deep cultural change


      Getting Real Financial Results


Passion + Execution = Fast and Lasting Results


                     12
                       Overall Perspective

                Process
               Capabilities                             Safety


                                                        Rolled
                                                      Throughput
               Technology                                Yield
               Capabilities

  Customer                              Predictable                   Customer
                              Robust                   COPQ, 4
Requirements                              Flexible                   Satisfaction
                              Designs                  Wall Cost
                                         Factories
                Materials
               Capabilities                            Capacity
                                                      Productivity


                                                       Materials
               Organization                           Mangmnt &
               Capabilities                            Inventory




                                  13
                           Six Sigma Systems

                               Materials    Six Sigma Data
                              Management       Systems


                                              Reliability
                                Process     Centered Maint.
              Six Sigma                                        Customer
New Product   Leadership       Operation                      Satisfaction
Development                   and Control
               Systems                                        Assessment
                                             Measurement
                                               Control


                               Problem      Human Resource
                               Solving        Involvement




                                   14
                   What is Six Sigma?
   Simple:
       Eliminate variation and defects
       Eliminate the opportunity for variation and defects
   Complex
       Vision
       Metric (Standard of measurement)
       Benchmark
       Philosophy
       Method
       Tool for:
              Customer focus

              Breakthrough improvement

              Continuous improvement

              People Involvement

       Aggressive Goals
                               15
     A Measurement

Sigma            PPM

 2             308,537
 3              66,807
 4               6,210
 5                 233
 6                  3.4


          16
Another Look . . .

s            % Non-Defective

 2           69.1%
 3           93.32%
 4           99.379%
 5           99.9767%
 6           99.99966%


        17
                           Practical Meaning

    99% Good                               99.99966% Good


Postal System
20,000 Lost Articles Of Mail / Hr         7 Lost Articles / Hr


Airline System
Two Short/Long Landings / Day             1 Short / Long Per 5 Years


Medical Profession
200,000 Wrong Drug Prescriptions / Year   68 Wrong Drug Prescriptions



                                    18
What Does 6 Sigma Mean In Your Daily Life?


 PPM
                     Prescription Writing
             Tax Advice
                               Restaurant Bills
 1,000,000                               Payroll Processing
  100,000
   10,000                                              Baggage Handling

    1,000                                    Best in
     100                                     Class
       10
                                                                     Airline
       1                                                           Safety Rate

             1      2       3       4          5        6      7



                                Sigma Level

                                    19
                        Business Metrics
                             USA Today
                           Medical Article
                         September 22, 1997


    Number of antibiotic prescriptions issued in 1996:
                      282,631,000

JAMA reported that 21% of all antibiotic prescriptions written were to
        treat colds, bronchitis, and respiratory infections...




                                20
                        Business Metrics
                             USA Today
                           Medical Article
                         September 22, 1997


    Number of antibiotics prescriptions issued in 1996:
                      282,631,000

JAMA reported that 21% of all antibiotic prescriptions written were to
        treat colds, bronchitis, and respiratory infections...
   even though more than 90% of such infections are caused by
             viruses, which are immune to antibiotics.

              53,000,000 defective prescriptions = 2.4 s



                                21
                                 Business Metrics

             Tranquilizers / Anti-Anxiety Medications:
                             76,370,000

                           Sleeping Pills / Sedatives:
                                  23,681,000

                                Anti-Obesity Drugs:
                                    23,596,000


Sources: IMS America, Plymouth Meeting, PA.




                                              22
                     Business Metrics


Instructor’s Note:

Despite being less than 3 sigma, we are “happy” to report
Doctors are operating with very profitable returns.

This only proves . . .
You don’t have to be 6 Sigma to make money.




                           23
               Reality of Escaping Defects

                                Escaping Defects

           Escaping Defects




                              Total Defects/Unit


 No matter how good your inspection and test processes are, the
more defects you create, the more defects escape to the customer

                                       24
Premise for Six Sigma Methods



Sources of variation can be
     Identified
     Quantified and prioritized
     Eliminated by control or prevention




                  25
                   3 Sigma Process

L o w e r Sp e c                         Uppe r Spe c




             s      s   s        s   s     s




                            26
                 6 Sigma Process
Lower Spec                                 Upper Spec




      s s    s    s s   s    s s   s   s   s s




                        27
      Dissecting Process Capability
               Inadequate
              Measurement         Supplier
                Capability        Variation

Inadequate                                    Inadequate
  Process                                       Design
 Capability     LSL               USL           Margin



                                               Defects




                   Process Capability
                             28
      Dissecting Process Capability
                             1000     100




                                            Percent
                                      80




                          Count
                                      60
                              500
                                      40
                                      20
                                  0   0
                      Defect

LSL          USL




Process Capability
                     29
           Business Impacts of Variability

   Prevention Costs                           Internal Failure
       Education and training                     Scrap
       Quality planning                           Supplier caused losses
       Product design qualification               Rework
        tests
                                                   Retest / Re-inspection
       Supplier qualification
                                                   Unplanned downtime
       Customer interface
                                                   Trouble shooting
       Controlling processes
                                                   Engineering change notices
   Appraisal Costs
                                               External Failures
       Incoming inspection
                                                   Processing customer
       Maintenance and calibration
                                                    inquiries
        of equipment
                                                   Maintaining customer field
       Setup inspection and tests
                                                    service
       Field testing
                                                   Retro fit costs
       Process audits
                                                   Incurring penalties/claims
                                                   Product warranty
                                                   Lost sales

                                       30
                      Exercise


   Go through the list on the previous slide and
    indicate which costs are EASILY accessed
    through your current finance systems.
   Count the selected elements




                          31
Sigma Level
     6             3s Cost of Failure : 20-25% of Sales

     5


     4


     3



    2

              5%   10%   15%    20%    25%        30%

                   Cost of Failure (% of Sales)

         What’s Your Cost Reduction Opportunity?

                         32
                 Objectives


*   What Is 6 Sigma ?


*   Why Are We Doing 6 Sigma ?


*   How Are We Deploying 6 Sigma ?




                        33
                    Six Sigma
    INITIATIVE                   METHODS & TOOLS
   Improvement                 Process Thinking
   Breakthrough                Process Variation
   Focused Approach            Facts, Figures, Data
   Right Projects              DMAIC
   Right People                8 Key Tools
   Project Reviews             Statistical Tools
   Sustain the Gains           Minitab
   Results ($$)                Critical Few Variables




                        34
                          Process Excellence: The Right Metrics
                      Defects per 1000                                    Scrap
                7                                             0.21
                                                              0.20
                                                              0.19




                                                       COPQ
                                                              0.18
    RTY




                65
                                                              0.17
                                                              0.16
                                                              0.15

                55                                            0.14
                      0       5           10                         0     5        10
                              Month                                        Month




                                                                         Baseline
                              Rate
                                                                          Goal
Units per Day




                                                                          Actual
                400


                                                     How is this process
                350
                          0       5
                                  Month
                                           10              doing?

                                                35
        Actual Metrics Example




Scrap                             Downtime




                                 Defects/Unit

                  36
      Using Pareto’s to Select Projects
                                                                 Pareto Chart for Cause

                                         1800
                                                                                                            100
                                         1600
                                         1400                                                               80
                                         1200




                                                                                                                  Percent
                               Count
                                         1000                                                               60
                                         800
                                                                                                            40
                                         600
                                         400                                                                20
                                         200
                                           0                                                                0

                               Defect
                                  Count            1328              198           164              34
                                 Percent           77.0             11.5           9.5             2.0
                                  u
                                 C m%              77.0             88.5          98.0           100.0



                               Process Related Scrap is the
                                        Highest
                                                          Major Part Failure due to Process
  Knife Assembly and Inner
                                         600                                                                100
  Gasket are the two major               500                                                                80

   process scrap drivers




                                                                                                                  Percent
                                 Count
                                         400
                                                                                                            60
                                         300
                                                                                                            40
                                         200
                                                                                                            20
Two Potential Projects:                  100

                                           0                                                                0

      - Knife Assembly         Defect
                                  Count          148       128       75      74      72     69         50
      - Inner Gasket             Percent
                                  u
                                 C m%
                                                24.0
                                                24.0
                                                          20.8
                                                          44.8
                                                                   12.2
                                                                   57.0
                                                                           12.0
                                                                           69.0
                                                                                   11.7
                                                                                   80.7
                                                                                          11.2
                                                                                          91.9
                                                                                                      8.1
                                                                                                    100.0




                          37
              Six Sigma Everywhere
              SERVICE               DESIGN




ADMIN.                                              PURCH.
                        Six Sigma
                        Methods



         QA                                  MFG.




                         MAINT.


                            38
The Process Improvement MethodologyTM

            Process Definition




           Process Measurement



             Process Analysis



           Process Improvement




             Process Control

                   39
       The Process Improvement MethodologyTM
Phase 0: Define       Phase I: Process Measurement
                      • Map process and Identify Inputs and Outputs
•Scope and
                      • Cause and Effects Matrix
Boundary
                      • Establish Measurement System Capability
•Define Defects       • Establish Process Capability Baseline
•Team Charter and
Sponsor
                            Phase II: Process Analysis
•Estimated $ Impact         • Complete FMEA
•Leadership                 • Perform Multi-vari Analysis
approval                    • Identity Potential Critical Inputs
                            • Develop Plan for Next Phase


                             Phase III: Process Improvement
                             • Verify Critical Inputs
                             • Optimize Critical Inputs


                            Phase IV: Process Control
                            • Implement Control Plan
                            • Verify Long Term Capability
                            • Continuously Improve Process

                            40

								
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