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What Is Six Sigma?

Six Sigma is a statistically based quality program that provides a process for continuous improvement. It enables organizations to achieve defect levels as low as 3.4 per million opportunities. With a focus on measurement, analysis, improvement, and control, Six Sigma can be applied to any business process for better quality and customer satisfaction.

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What Is Six Sigma?

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  1. e What Is Six Sigma?

  2. What Is Six Sigma? • Measureof Quality • ProcessFor Continuous Improvement • Enablerfor Culture Change

  3. What Is Six Sigma? • Measureof Quality 6 Sigma is a Statistically based Quality Program. It is a rigorous methodology to improveprocess control.

  4. Activity Defects @ 99% Defects @ 99.9997% ( 3.8 Sigma ) ( 6 Sigma ) Mail20,000 lost articles7 lost articlesDeliveryof mail per hourof mail per hour DrinkingUnsafe drinking waterUnsafe drinking waterWaterfor 15 mins per dayfor 2 mins per year Hospital5000 incorrect2 incorrectSurgeryprocedures per weekprocedures per week Air2 abnormal landings1 abnormal landing Travelat most airports each dayevery 5 years Measureof Quality Process Capability needs to be Better than you think ! Sometimes 99% is just not good enough

  5. What Is Six Sigma? • ProcessFor Continuous Improvement 6 Sigma provides a process based approach to continuous improvement. It is independent of the measurement involved & can be used to improve any business process

  6. Define Measure Analyze Improve Control Processfor Improvement Three Routes to choose from : 1)Improved Control D M A I C On Average the Process is great - the Issues lie with the Variation

  7. Define Measure Analyze re-Design Verify Processfor Improvement Three Routes to choose from : D M A D V 2) Process Redesign The Average needs to Improve - Structural Problem with the Process

  8. Design For Six Sigma Processfor Improvement Three Routes to choose from : D F S S 3)New Process New Process Development -Creating 6 Sigma Process Capability

  9. Improving an Existing Process Define Measure Analyze Improve Control DMAIC Six Sigma Project Methodology Designing and Implementing a New Process Define Measure Analyze Design Verify DMADV/DFSS

  10. What Is Six Sigma? • EnablerFor Cultural Change To be successful, 6 Sigma requires a radical change in the way an organization works. Business Leadership and 6 Sigma can together transform a company

  11. Before6 Sigma: Tough to achieve long-term sustainable improvement With6 Sigma : Sustainable via In-process Control - no Product Inspection Fundamentally Different Approach Enablerfor Change 1) Inspect the product 2) Pareto the symptoms perceived as being the cause of out of spec material 3) Initiate action to mitigate / eliminate the symptoms 1) Measure the process output & analyze the data 2) Discover quantitative relationships between the output & in-process variables 3) Develop & implement control plan

  12. Leadership for Quality Six Sigma Leadership Champions: Fully-trained business leaders who lead the deployment of Six Sigma in a significant area of the business Master Black Belts:Fully-trained quality leaders responsible for Six Sigma strategy, training, mentoring, deployment and results Black Belts:Fully -trained Six Sigma experts who lead improvement teams, work projects across the business and mentor Green Belts Green Belts:Fully-trained individuals who apply Six Sigma skills to projects in their job areas MBB & BB Roles are Key Leadership Development Positions Team Members:Individuals who receive specific Six Sigma training and who support projects in their areas

  13. Enablerfor Change Six Sigma Functions Resource Deployment @ GE ( # employees ) Champions (Part-Time) All Business Leaders Master Black Belts (MBB) 500 Black Belts (BB) 5,000 Green Belts (GB) 100,000 Six Sigma Associates 100% Huge Resource shift - Only the Best chosen It’s like a MBA - Vital to your Career!

  14. Significantly Higher Net Income • Simpler Processes - Speed everywhere • True Focus on What the Customer Wants • Improved Employee Satisfaction What is6 Sigma It’s all about Getting Results So What’s it Done for GE?

  15. What Does Six Sigma Do For GE? • Six Sigma- Evolution in GE • Six Sigma- Results & Examples in GE • Six Sigma- Enabling GE e-Business

  16. Evolutionin GE 1995 Headlines Six Sigma Evolution GE Launches Six SigmaThroughout Company Focus :Core Activities Objective :Productivity & AssetUtilization 1995 PRODUCTIVITY 1995 Timeline 1995 1996 1997 1998 1999 2000 2001 2001+

  17. Evolutionin GE 1997 Headlines Six Sigma Evolution GE Turns to Six SigmaFor New Products Focus :New Product Design Objective :World Class Capabilityin the Market Place 1995 PRODUCTIVITY 1997 PRODUCT DESIGN 1997 Timeline 1995 1996 1997 1998 1999 2000 2001 2001+

  18. Evolutionin GE 1998 Headlines Six Sigma Evolution GE Turns Six SigmaLoose at the Customer Focus :Customer Productivity& Value Add Services Objective :Revenue Growth& Share Shift 1995 PRODUCTIVITY 1997 PRODUCT DESIGN 1998 @ THE CUSTOMER 1998 Timeline 1995 1996 1997 1998 1999 2000 2001 2001+

  19. Evolutionin GE 1999 Headlines Six Sigma Evolution Fulfillment Processesget Six Sigma Focus Focus :Meeting Customer Request Objective :e-Enabling our BusinessTransaction Processes 1995 PRODUCTIVITY 1997 PRODUCT DESIGN 1998 @ THE CUSTOMER 1999 FULFILLMENT 1999 Timeline 1995 1996 1997 1998 1999 2000 2001 2001+

  20. Six Sigma Evolution 1995 PRODUCTIVITY 1997 PRODUCT DESIGN 1998 @ THE CUSTOMER 1999 FULFILLMENT 2000 DIGITIZATION 2001 CERTIFICATION Evolutionin GE 2000 Headlines Digitization at GE needsSix Sigma Execution Focus :Automating Business Processes Objective :Speed & Reliability on theWeb @ Far Lower Cost Timeline 1995 1996 1997 1998 1999 2000 2001

  21. 6 Sigma Cost 6 Sigma Productivity $500 Delighting Customers $900 $2.5B $3.0B $2.5B $1.2B $700 $600 $600 $500 $450 $380 $200 $170 Cost Benefit Cost Benefit Cost Benefit Cost Benefit Cost Benefit 1996 1997 1998 1999 2000 Results from 6 Sigma $3.4B $3.5B Cost Benefit 2001 $3.4 Billion in 2001 … Customers & Shareholders Love It!

  22. Summary Customer Contact Binder Defect Data Impact on Customers Surveys Scorecards Dashboards Impact on Operations Tying Six Sigma to the Bottom Line ProjectSelection • Price • Volume CTQs Results Reduce variationin processes, products & services Six Sigma Projects • Cycletime • Cash Flow • DPMO • # Binders • Suppliers • Certs/$$ Data Productivity ProjectSelection Impact on Performance Cost of FailurePremium DollarsInvestment Capital Dollars

  23. Results from 6 Sigma Six Sigma Evolution Six Sigma Infrastructure: 1995 PRODUCTIVITY 1997 PRODUCT DESIGN • Resources integrated in the Businesses • Global Database & Best Practice Sharing • Common Approach / Tools • Training & Certification on 6 Sigma skills • On-line Self Tutoring & Reference • Technical & Financial Sign off on Quality • All Projects Measured with the same Rigor 1998 @ THE CUSTOMER 1999 FULFILLMENT 2000 DIGITIZATION 2001 CERTIFICATION Institutionalized Process Delivering Quality Earnings

  24. GEMS LightSpeed CT Scanner Six Sigma Evolution 1995 PRODUCTIVITY 1997 PRODUCT DESIGN 1998 @ THE CUSTOMER 1999 FULFILLMENT 2000 DIGITIZATION 2001 CERTIFICATION Head: skull, brain Abdomen: liver, spine, kidney Products from 6 Sigma

  25. Six Sigma Evolution 1995 PRODUCTIVITY Exam Time After Exam Time Before Procedures per Year 1997 PRODUCT DESIGN 1998 @ THE CUSTOMER 9 million HEAD 1999 FULFILLMENT 1 minute 19 seconds 2000 DIGITIZATION 1 million SPINE 2001 CERTIFICATION 2 minutes 15 seconds 4 million CHESTABDOMENPELVIS 3 minutes 17 seconds 6 million LIVER 20 seconds 06 seconds Abdomen: liver, spine, kidney Before After Head: skull, brain Products from 6 Sigma GEMS LightSpeed CT Scanner Image Speeds Unparalleled Resolution in a Fraction of the Time

  26. Hospitals Love ItBetter Quality- 10x more reliableHigher Revenues- more throughputNew technology first- better image quality Patients Love ItMore Reliable & Earlier diagnosisImproved comfort- shorter exam time GE ShareholdersLove ItHigher Revenues- up more than 50% Six Sigma Evolution 1995 PRODUCTIVITY 1997 PRODUCT DESIGN 1998 @ THE CUSTOMER 1999 FULFILLMENT 2000 DIGITIZATION 2001 CERTIFICATION Products from 6 Sigma GEMS LightSpeed CT Scanner Exceeding All of the Customers’ Expectations

  27. Six Sigma Evolution 1995 PRODUCTIVITY 1997 PRODUCT DESIGN 1998 @ THE CUSTOMER 1999 FULFILLMENT 2000 DIGITIZATION 2001 CERTIFICATION Products from 6 Sigma 1997Performix™ X-ray Tube 1998LightSpeed™ CTSmall Motor productsUltem 1285 Spectra™ Gas Range 1999 Spectra™ Electric RangeAdvantium™ Speed OvenTriton DishwasherCeramic Metal Halide LampsT5 Fluorescent LampSigna OpenSpeed™ MROQ 1050C for Compact DiscAC6000 Locomotive 2001 or later New Designs 5000 Projects focused onNew 6 Sigma Technology & New Processes to the GE Businesses All of GE Products Designed for Six Sigma

  28. Six Sigma Evolution Six Sigma Process : 1995 PRODUCTIVITY 1997 PRODUCT DESIGN 1998 @ THE CUSTOMER • 200+ Black Belts Co-located at the Customer • Customer Determines Project Scope • Customer Determines & Verifies $ Benefits • Learn future needs ahead of Competition • 6000 projects already completed • GE Share @ Customer grows as a result 1999 FULFILLMENT 2000 DIGITIZATION 2001 CERTIFICATION 6 Sigma@ the Customer Helping Customers feel 6 Sigma….A Win-Win Strategy

  29. The Customer Miss-labeling from Bloomington Poor packaging for resale Damaged Goods from Mebane Small Pack Damaged Goods from LA Warehouse Customer CTQ Cycle Customer visits • Issues collected from all levels of customer organization Issues prioritized • Mapped to current projects • Ranked by customer impact and ease of implementation Fix issues with Work-Outs • Relay customer feedback to ERC employees & improve process together Communicate successes • Monitor the fixes/process changes for effectiveness Focused on Continuous Improvement

  30. Six Sigma Evolution Builders– Appliances Airlines– Engines 1995 PRODUCTIVITY 1997 PRODUCT DESIGN Retailers – Lighting – Appliances OEMs – Vendor – CEF 1998 @ THE CUSTOMER Floor Care Manufacturer– Plastics 1999 FULFILLMENT Utilities – Power Sys. – Industrial Sys. Hospitals– Medical 2000 DIGITIZATION 2001 CERTIFICATION 6 Sigma@ the Customer

  31. Six Sigma Evolution Builders– Appliances Airlines– Engines 1995 PRODUCTIVITY 1997 PRODUCT DESIGN Retailers – Lighting – Appliances OEMs – Vendor – CEF 1998 @ THE CUSTOMER 1999 FULFILLMENT Utilities – Power Sys. – Industrial Sys. Hospitals– Medical 2000 DIGITIZATION 2001 CERTIFICATION • Customer Issue • Assembly Line Efficiency 6 Sigma@ the Customer Floor Care Manufacturer– Plastics

  32. Six Sigma Evolution Builders– Appliances Airlines– Engines 1995 PRODUCTIVITY 1997 PRODUCT DESIGN Retailers – Lighting – Appliances OEMs – Vendor – CEF 1998 @ THE CUSTOMER 1999 FULFILLMENT Utilities – Power Sys. – Industrial Sys. Hospitals– Medical 2000 DIGITIZATION 2001 CERTIFICATION 6 Sigma@ the Customer Floor Care Manufacturer– Plastics • Customer Issue • Assembly Line Efficiency • Six Sigma @ the Customer • Six Sigma Approach identifies Factors impacting Work Flow

  33. Six Sigma Evolution Builders– Appliances Airlines– Engines 1995 PRODUCTIVITY 1997 PRODUCT DESIGN Retailers – Lighting – Appliances OEMs – Vendor – CEF 1998 @ THE CUSTOMER 1999 FULFILLMENT Utilities – Power Sys. – Industrial Sys. Hospitals– Medical 2000 DIGITIZATION 2001 CERTIFICATION 6 Sigma@ the Customer Floor Care Manufacturer– Plastics • Customer Issue • Assembly Line Efficiency • Six Sigma @ the Customer • Six Sigma Approach identifies Factors impacting Work Flow • Customer Results • Output from 450 è 800 Units/Day • WIP ê 85% • $1MM Cost Out

  34. Six Sigma Evolution Builders– Appliances Airlines– Engines 1995 PRODUCTIVITY 1997 PRODUCT DESIGN Retailers – Lighting – Appliances OEMs – Vendor – CEF 1998 @ THE CUSTOMER 1999 FULFILLMENT Utilities – Power Sys. – Industrial Sys. Hospitals– Medical 2000 DIGITIZATION 2001 CERTIFICATION 6 Sigma@ the Customer Floor Care Manufacturer– Plastics • Customer Issue • Assembly Line Efficiency • Six Sigma @ the Customer • Six Sigma Approach identifies Factors impacting Work Flow • Customer Results • Output from 450 è 800 Units/Day • WIP ê 85% • $1MM Cost Out • GE Results • 2MM lb. Share Shift • $1.5MM Growth Program

  35. Six Sigma Evolution Builders– Appliances Airlines– Engines 1995 PRODUCTIVITY 1997 PRODUCT DESIGN Retailers – Lighting – Appliances OEMs – Vendor – CEF 1998 @ THE CUSTOMER 1999 FULFILLMENT Utilities – Power Sys. – Industrial Sys. Hospitals– Medical 2000 DIGITIZATION 2001 CERTIFICATION Customer Results GE Results 6 Sigma@ the Customer Floor Care Manufacturer– Plastics Output from 450 è 800 Units/Day WIP ê 85% $1MM Cost Out 2MM lb. Share Shift $1.5MM Growth Program Customers Gain Productivity….GE Rewarded with Share

  36. Give CUSTOMERS What They Want “The fact that we’ve done Six Sigma for seven years is irrelevant to the customer, but if we can bring Six Sigma to life at a customer, it’s the whole game. “ Chairman and CEO, Jeff Immelt When They Want It 6 SigmaFulfillment Six Sigma Evolution 1995 PRODUCTIVITY 1997 PRODUCT DESIGN 1998 @ THE CUSTOMER 1999 FULFILLMENT 2000 DIGITIZATION 2001 CERTIFICATION

  37. Six Sigma Evolution h 1995 PRODUCTIVITY 1997 PRODUCT DESIGN But how early ? 1998 @ THE CUSTOMER 1999 FULFILLMENT 2000 DIGITIZATION And how late? 2001 CERTIFICATION But how early? 6 SigmaFulfillment On Time Early Late Delivery to Customer Want Date

  38. Six Sigma Evolution h 1995 PRODUCTIVITY 1997 PRODUCT DESIGN 1998 @ THE CUSTOMER 1999 FULFILLMENT 2000 DIGITIZATION 2001 CERTIFICATION 6 SigmaFulfillment On Time Early Late Reducing Variation to Meet Customer Request

  39. Six Sigma Evolution 1995 PRODUCTIVITY 1997 PRODUCT DESIGN 1998 @ THE CUSTOMER 1999 FULFILLMENT 2000 DIGITIZATION Variation from Request 2001 CERTIFICATION 2/99 10/99 Today 17 Days 4 Days 2 Days 6 SigmaFulfillment GE Silicones- Delivery to Request Sales Double Digit Volume Growth Internet Web Sales Booming Sales Force More Time to Sell vs. Chasing Order Status Op Margin Up 20+%

  40. Six Sigma Evolution 1995 PRODUCTIVITY Customer Power Plant On-Time Operation Date 1997 PRODUCT DESIGN Days 350 1998 @ THE CUSTOMER 1999 FULFILLMENT 230 2000 DIGITIZATION 302 Day Variation Reduction 2001 CERTIFICATION 133 48 5 Days '98 2Q'99 3Q'99 4Q'99 2000 Baseline Target 6 SigmaFulfillment GE Power Systems- Delivery to Request Customers’ Revenue Impacted By Variation On-time Reliability gives Customer 100 days more Electricity Sales

  41. Six Sigma Evolution Internet World 1995 PRODUCTIVITY Transactional Business Processes 1997 PRODUCT DESIGN 1998 @ THE CUSTOMER 1999 FULFILLMENT 2000 DIGITIZATION Sell Order Make Deliver Service 2001 CERTIFICATION 6 SigmaFulfillment Before Internet • No Visibility to Business Processes • Lots of Buffers– Salespeople, Order Service • Cost of Poor Fulfillment – Inventory/ Expediting • Internet Provides Visibility • Differentiates Those Who Can and Those Who Can’t • Highlights Internal Waste (Buffers) • Cost of Failure – Fatal Variation Reduction Key To Success In e-World

  42. Six Sigma Evolution 1995 PRODUCTIVITY 1997 PRODUCT DESIGN 1998 @ THE CUSTOMER 1999 FULFILLMENT 2000 DIGITIZATION 2001 CERTIFICATION 6 SigmaFulfillment Six Sigma Fulfillment : • Meet Customer Request - Never be outdone • No Variation - “Must have” in e-World • Company Wide Goal - Always within 5 days • Drives Customer Satisfaction & Growth • Customer focused Internal Processes • Drives Speed & Simplicity Enormous Rewards for 6 Sigma Fulfillment

  43. Six Sigma Evolution 1995 PRODUCTIVITY 1997 PRODUCT DESIGN 1998 @ THE CUSTOMER 1999 FULFILLMENT 2000 DIGITIZATION 2001 CERTIFICATION DigitizingGE Digitization at GE Focus :Automating all Business Processes Objective :Speed, Reliability & Serviceon the Web at Much Lower Cost Digitization - The Next Step In Customer Centricity & Productivity

  44. Six Sigma Evolution 1995 PRODUCTIVITY 1997 PRODUCT DESIGN 1998 @ THE CUSTOMER 1999 FULFILLMENT 2000 DIGITIZATION 2001 CERTIFICATION Evolutionin GE What DoesSix SigmaDo For GE? • Drives Customer Centricity • Improves Product/Service Capability • Reduces Costs • Improves Performance Reliability • Foundation for e-Business/Digitization Six Sigma - Changing the Company DNA

  45. e Six Sigma

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