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6Overview•SixSigma:-ADefinition-AppliedtoGE-GEQualityInitiative-WhyThisApproach?-OriginofSixSigma-The“BreakthroughStrategy”-ArrivingatSigma•SixSigmaStructure•KeyConcepts&Tools•APracticalExampleAnOverview....NotalotofDetails!!6Overview“SixSigma”•Ifwecan’texpresswhatweknowintheformofnumbers,wereallydon’tknowmuchaboutit.•Ifwedon’tknowmuchaboutit,wecan’tcontrolit.•Ifwecan’tcontrolit,weareatthemercyofchance.MikelJ.HarryPresident&CEOSixSigmaAcademy,Inc.ARigorousMethodforMeasuring&ControllingOurQuality“...willbringGEtoawholenewlevelofqualityinafractionofthetimeitwouldhavetakentoclimbthelearningcurveonourown.”JohnF.Welch,Jr.1995GEAnnualReport6OverviewWhatDoes“Sigma”Mean?SigmaisaMeasureoftheConsistencyofaProcessIt(isAlsothe18thLetterintheGreekAlphabet!WhyDoesGENeedAQualityInitiative?GERaisingTheBar•NewGoaltobe“BestintheWorld”vs.#1or#2•CustomersareExpectingMore,weMustDeliver•“Ship-and-fix”ApproachnoLongerToleratedintheMarket•AimtoSpeedPastTraditionalCompetitorsin5Years•GoalConsistentwithReducedTotalCostsWeMustAcknowledgeOurVulnerabilities•PoorQualityThatImpactsCustomers•ProblemswithNPI•TooHighInternalCosts6OverviewWeNeedaMajorInitiativetoMoveFromWhereweAretoWhereweWanttobe6OverviewWhyDoesGENeedAQualityInitiative?40%35%30%25%20%10%15%5%CostofFailure(%ofSales)DefectsperMillion3.4233621066,807308,537500,000Sigma654321EstimatedCostofFailureinUSIndustryis15%ofSales;TakingGEFroma3toa6CompanyWillSave~$10.5BillionperYear!Why“SixSigma”?•ProvenSuccessfulin“Quality-Demanding”Industriese.g.,Motorola,TexasInstruments(manyprocessstepsinseries)•ProvenMethodtoReduceCosts•HighlyQuantitativeMethod–ScienceandLogicInsteadofGutFeel•IncludesManufacturing&Service(closetocustomer)andProvidesBridgetoDesignforQualityConcepts•HasSupportandCommitmentofTopManagementItWorks!!!6OverviewSigma3456SpellingMoneyTime1.5MisspelledWordsperPageinaBook1MisspelledWordper30PagesinaBook1MisspelledWordinasetofEncyclopedias1MisspelledWordinalloftheBooksinaSmallLibrary$2.7MillionIndebtednessper$1BillioninAssets$570Indebtednessper$1BillioninAssets$63,000Indebtednessper$1BillioninAssets$2Indebtednessper$1BillioninAssets31/2MonthsperCentury21/2DaysperCentury30MinutesperCentury6SecondsperCentury6isSeveralOrdersofMagnitudeBetterThan3!!!Sigma:AMeasureofQuality6OverviewWhereDoes“SixSigma”ComeFrom?•MikelJ.HarryoneoftheOriginalArchitects•PreviouslyHeadedQualityFunctionatABBandMotorola•NowPresident/CEOofSixSigmaAcademyinPhoenix,Arizona•HasConsultedforTexasInstruments,AlliedSignal(andothers)•CurrentlyRetainedbyGEtoTeachtheImplementation,DeploymentandApplicationofSixSigmaConcepts&ToolsLearningfromThoseWhoHavehadSuccessWith6WillAccelerateitsImplementationatGE6OverviewSo...WhatisSixSigma?•AMeasurementSystem•AProblem-SolvingApproach•ADisciplinedChangeProcess“THESIXSIGMABREAKTHROUGHSTRATEGY”MeasureAnalyzeImproveControl6OverviewHowDoWeArriveatSigma?Measuring&EliminatingDefectsisthe“Core”ofSixSigmaMeasurementSystemIdentifytheCTQsLookforDefectsinProductsorServices•“CriticaltoQuality”CharacteristicsortheCustomerRequirementsforaProductorService•CountDefectsorfailurestomeetCTQrequirementsinallprocessstepsDefineDefectOpportunities•AnystepintheprocesswhereaDefectcouldoccurinaCTQArriveatDPMO•UsetheSIGMATABLEConvertDPMOtoSigma•DefectsPerMillionOpportunities23456308,53766,8076,2102333.4PPMDefectsperMillionofOpportunitySigmaLevel6OverviewMeasurementSystem23456308,53766,8076,2102333.4PPMSIGMALEVELDEFECTSperMILLIONOPPORTUNITYIRSTaxAdviceBestCompaniesAirlineSafetyAverageCompanyGEAirlineBaggageDoctor’sPrescriptionRestaurantBills{{{{AverageCompanyin3to4RangeSomeSigma“Benchmarks”6OverviewMeasurementSystemAGraphic/QuantitativePerspectiveonVariationAverageValueManyDataSetsHaveaNormalorBellShapeNumberofPeopleArrivingatCRDTime7:007:157:307:458:008:158:308:459:009:156OverviewProblemSolvingApproachCenterProcessReduceSpreadXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXOff-TargetUnpredictableOn-Target6HelpsusIdentifyandReduceVARIATIONdueto:-InsufficientProcessCapability-UnstableParts&Materials-InadequateDesignMarginTargetUSLLSLTargetUSLLSLTargetUSLLSLCenterProcessReduceSpreadOff-TargetUnpredictableOn-TargetDefects6OverviewProblemSolvingApproach“LowerSpecificationLimit”“UpperSpecificationLimit”LessVariationMeansFewerDefects&HigherProcessYields6OverviewProblemSolvingApproachKeyComponentsof“BREAKTHROUGHSTRATEGY”MeasureAnalyzeImproveControl•IdentifyCTQ&CTP(CriticaltoProcess)Variables•DoProcessMapping•DevelopandValidateMeasurementSystems•BenchmarkandBaselineProcesses•CalculateYieldandSigma•TargetOpportunitiesandEstablishImprovementGoals•UseofParetoChart&FishboneDiagrams•UseDesignofExperiments•Isolatethe“VitalFew”fromthe“TrivialMany”SourcesofVariation•TestforImprovementinCentering•UseofBrainstormingandActionWorkouts•SetupControlMechanisms•MonitorProcessVariation•Maintain“InControl”Processes•UseofControlChartsandProceduresAMixofConceptsandToolsWillAlsoIntegratewithNPIProcess6OverviewDisciplinedChangeProcessANewSetofQUALITYMEASURES•CustomerSatisfaction•CostofPoorQuality•Supp
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