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Six Sigma

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Six Sigma

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  1. Six Sigma

  2. What is Six Sigma?? • A statistical concept that represents amount of variation in a process relative to a specification • 99.9997% defect free • A business philosophy focused on continuous improvement of key processes through the use of thorough process analysis to achieve operational excellence

  3. What’s So Bad About Variation? • In world-class organizations, working to improve quality is not an extracurricular activity. It is a minimum requirement. - Chang, Labovitz, and Rosansky

  4. DPMO • 1 sigma = 68.27% = 697,700 dpmo • 3 sigma = 99.73% = 66,810 dpmo • 5 sigma = 99.977% = 233 dpmo • 6 sigma = 99.9997% = 3.4 dpmo Note: estimates of long-term sigma values

  5. Where did Six Sigma Come From? • Motorola started it • GE made Six Sigma famous • Based on the QI tools learned in this course, plus other tools • Need for companies to become more competitive

  6. www.motorola.com • Motorola has been implementing Six Sigma throughout the organization now for over 15 years, extending the practice beyond manufacturing into transactional, support, and service functions. As a result, we have documented over $16 billion in savings to our own organization!

  7. SS is not Continuous QI • SS has an increased focus on quality as defined by the customer and uses a “sigma score” • SS uses rigorous statistical techniques • SS prioritizes improvement projects and resources based on the company’s strategic initiatives • It is TQM with a stats focus – quantitative and qualitative

  8. How to Do SS • Management commitment • Focus on the Customer • Structured Training • Encourage open discussion about processes and defects • Gather data, analyze it, make improvements (DMAIC) on a project basis • Create a team-based, cooperative environment

  9. The Training • Black Belt • Green Belt • (Yellow Belt) • Master Black Belt • Champion • Executive Sponsors

  10. Typical Structure for SS at GE

  11. SS Deployment (from B&W) • Business alignment planning • First wave of BB training • Second wave of BB and GB training • Infrastructure development to deliver results and sustain culture (a QMS is always best)

  12. SS Method 1 Define 2 Measure 5 Control 4 Improve 3 Analyze

  13. Financial Tool: COPQ • Cost of Poor Quality • Internal Failure • External Failure • Appraisal • Prevention • (Lost Opportunity)

  14. Internal Failure Costs • Design corrective action • Production rework • Material losses (scrap) • Machine down time • Overtime

  15. Appraisal Costs • Measuring/inspecting product • Receiving inspection • Testing • External and internal auditors

  16. External Failure Costs • Cost of recall/warranty • Liability claims • Customer complaint investigations • Loss of customer loyalty • Effects on reputation/marketplace perception

  17. Prevention Costs • Customer satisfaction surveys • Supplier reviews and ratings • Process validation • SPC • Education/training

  18. Lost Opportunity Costs • Lost sales • Lost customers • Delayed market entry • Environmental and safety issues

  19. Total Cost of Quality • Add up all costs • COPQ Ratio = Total Cost of Quality $ Monthly Cost of Sales $ • Examples