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6 6 Overview Six Sigma:Six Sigma: - A Definition- A Definition - Applied to GE- Applied to GE - GE Quality Initiative- GE Quality Initiative - Why This Approach?- Why This Approach? - Origin of Six Sigma- Origin of Six Sigma - The “Breakthrough Strategy”- The “Breakthrough Strategy” - Arriving at Sigma- Arriving at Sigma Six Sigma Structure Six Sigma Structure Key Concepts Taking Estimated Cost of Failure in US Industry is 15% of Sales; Taking GE From a 3GE From a 3 to a 6 to a 6 Company Will Save $10.5 Billion per Year! Company Will Save $10.5 Billion per Year! Why “Six Sigma”?Why “Six Sigma”? Proven Successful in “Quality-Demanding” Industries e.g.,Proven Successful in “Quality-Demanding” Industries e.g., Motorola, Texas Instruments (many process steps in series) Motorola, Texas Instruments (many process steps in series) Proven Method to Reduce CostsProven Method to Reduce Costs Highly Quantitative Method Science and Logic Instead of Gut FeelHighly Quantitative Method Science and Logic Instead of Gut Feel Includes Manufacturing & Service (close to customer) and Provides Bridge Includes Manufacturing & Service (close to customer) and Provides Bridge to to Design for QualityDesign for Quality Concepts Concepts Has Support and Commitment of Top ManagementHas Support and Commitment of Top Management It Works!It Works! 6 Overview SigmaSigma 3 3 4 4 5 5 6 6 SpellingSpellingMoneyMoneyTimeTime 1.51.5 Misspelled WordsMisspelled Words per Pageper Page in a Book in a Book 1 1 Misspelled WordMisspelled Word per 30 Pagesper 30 Pages in a Book in a Book 1 1 Misspelled Word inMisspelled Word in a a set of Encyclopediasset of Encyclopedias 1 1 Misspelled Word in allMisspelled Word in all of the of the Books in a SmallBooks in a Small LibraryLibrary $2.7 $2.7 MillionMillion Indebtedness Indebtedness per $1 Billion in Assetsper $1 Billion in Assets $570$570 IndebtednessIndebtedness per $1 Billion in Assetsper $1 Billion in Assets $63,000$63,000 IndebtednessIndebtedness per $1 Billion in Assetsper $1 Billion in Assets $2$2 IndebtednessIndebtedness per $1 Billion in Assetsper $1 Billion in Assets 3 1/2 3 1/2 MonthsMonths per Centuryper Century 2 1/2 2 1/2 DaysDays per Centuryper Century 30 30 MinutesMinutes per Centuryper Century 6 6 SecondsSeconds per Centuryper Century 6 6 is Several Orders of Magnitude Better Than 3is Several Orders of Magnitude Better Than 3 ! Sigma: A Measure of QualitySigma: A Measure of Quality 6 Overview Where Does “Six Sigma” Come From?Where Does “Six Sigma” Come From? MikelMikel J. Harry one of the Original Architects J. Harry one of the Original Architects Previously Headed Quality Function at ABB and Motorola Previously Headed Quality Function at ABB and Motorola Now President/CEO of Six Sigma Academy in Phoenix, Arizona Now President/CEO of Six Sigma Academy in Phoenix, Arizona Has Consulted for Texas Instruments, Allied Signal (and others) Has Consulted for Texas Instruments, Allied Signal (and others) Currently Retained by GE to Teach the Implementation, Currently Retained by GE to Teach the Implementation, Deployment and Application of Six Sigma Concepts & Tools Deployment and Application of Six Sigma Concepts & Tools Learning from Those Who Have had SuccessLearning from Those Who Have had Success With 6With 6Will Accelerate its Implementation at GEWill Accelerate its Implementation at GE 6 Overview So.So.WhatWhat is Six Sigma? is Six Sigma? A Measurement SystemA Measurement System A Problem-Solving ApproachA Problem-Solving Approach A Disciplined Change ProcessA Disciplined Change Process “ “THE SIX SIGMA BREAKTHROUGH STRATEGY”THE SIX SIGMA BREAKTHROUGH STRATEGY” MMeasureeasure A A nalyzenalyze I I mprovemprove C C ontrolontrol 6 Overview HowHow Do We Arrive at Sigma?Do We Arrive at Sigma? Measuring & Eliminating Defects is the “Core” of Six SigmaMeasuring & Eliminating Defects is the “Core” of Six Sigma Measurement SystemMeasurement System Identify theIdentify the CTQsCTQsLook for Look for DefectsDefects in in Products orProducts or ServicesServices “ “Critical to Quality” Critical to Quality” Characteristics or Characteristics or the Customer the Customer Requirements for a Requirements for a Product or Service Product or Service Count Count DefectsDefects or failures to or failures to meet meet CTQCTQ requirements in requirements in all process steps all process steps Define Define DefectDefect OpportunitiesOpportunities Any step in theAny step in the process where a process where a Defect Defect could occurcould occur in a in a CTQCTQ Arrive at Arrive at DPMODPMO Use the Use the SIGMASIGMA TABLE TABLE Convert Convert DPMO DPMO toto SigmaSigma Defects Per MillionDefects Per Million Opportunities Opportunities 2 2 3 3 4 4 5 5 6 6 308,537308,537 66,807 66,807 6,210 6,210 233 233 3.4 3.4 PPMPPM Defects perDefects per Million of Million of Opportunity Opportunity SigmaSigma Level Level 6 Overview Measurement SystemMeasurement System 2 2 3 3 4 4 5 5 6 6 308,537308,537 66,807 66,807 6,210 6,210 233 233 3.4 3.4 PPMPPM SIGMASIGMA LEVEL LEVEL DEFECTS perDEFECTS per MILLION MILLION OPPORTUNITYOPPORTUNITY IRS Tax AdviceIRS Tax Advice Best CompaniesBest Companies Airline SafetyAirline Safety Average CompanyAverage Company GEGE Airline BaggageAirline Baggage Doctors PrescriptionDoctors Prescription Restaurant BillsRestaurant Bills Average Company in 3Average Company in 3 to 4 to 4Range Range Some Sigma “Benchmarks” Some Sigma “Benchmarks” 6 Overview Measurement SystemMeasurement System A Graphic/Quantitative Perspective on VariationA Graphic/Quantitative Perspective on Variation Average ValueAverage Value Many Data Sets Have a Normal or Bell ShapeMany Data Sets Have a Normal or Bell Shape Number ofNumber of PeoplePeople ArrivingArriving at CRDat CRD TimeTime 7:007:00 7:15 7:15 7:30 7:30 7:45 7:45 8:00 8:00 8:15 8:15 8:30 8:30 8:45 8:45 9:00 9:00 9:15 9:15 6 Overview Problem Solving ApproachProblem Solving Approach CenterCenter ProcessProcess ReduceReduce SpreadSpread X X X X X X X X X X X X X X X XXX X X X X XX X XX X X XXX X X X X XX X XX X Off-TargetOff-TargetUnpredictableUnpredictable On-TargetOn-Target 6 6 Helps us Identify and Reduce Helps us Identify and Reduce VARIATIONVARIATION due to: due to: - Insufficient Process Capability - Insufficient Process Capability - Unstable Parts & Materials - Unstable Parts & Materials - Inadequate Design Margin - Inadequate Design Margin Target USLUSLLSLLSL Target USLUSLLSLLSL Target USLUSLLSLLSL CenterCenter ProcessProcess ReduceReduce SpreadSpread Off-TargetOff-TargetUnpredictableUnpredictable On-TargetOn-Target DefectsDefects 6 Overview Problem Solving ApproachProblem Solving Approach “ “Lower Specification Limit”Lower Specification Limit” “ “Upper Specification Limit”Upper Specification Limit” Less Variation Means Less Variation Means Fewer DefectsFewer Defects & & Higher Process YieldsHigher Process Yields 6 Overview Problem Solving ApproachProblem Solving Approach Key Components of Key Components of “BREAKTHROUGH STRATEGY”“BREAKTHROUGH STRATEGY” MMeasureeasure A A nalyzenalyze I I mprovemprove C C ontrolontrol Identify Identify CTQ & CTQ & CTP (Critical to CTP (Critical to Process) Process) Variables Variables Do Do Process Process Mapping Mapping Develop and Develop and Validate Measurement Validate Measurement Systems Systems Benchmark andBenchmark and Baseline Baseline Processes Processes Calculate Calculate YieldYield and Sigma and Sigma Target Target OpportunitiesOpportunities and Establish and Establish Improvement GoalsImprovement Goals Use of Use of ParetoPareto Chart Chart & Fishbone Diagrams & Fishbone Diagrams Use Use Design ofDesign of Experiments Experiments Isolate the Isolate the “Vital Few” “Vital Few” from the from the “Trivial Many” “Trivial Many” Sources of Variation Sources of Variation Test for Test for ImprovementImprovement in Centering in Centering Use of Use of BrainstormingBrainstorming and and Action WorkoutsAction Workouts Set up Set up ControlControl Mechanisms Mechanisms Monitor Monitor ProcessProcess Variation Variation Maintain Maintain “In Control”“In Control” Processes Processes Use of Use of ControlControl Charts Charts and and Procedures Procedures A Mix of Concepts and Tools A Mix of Concepts and Tools Will Also Integrate with NPI ProcessWill Also Integrate with NPI Process 6 Overview Disciplined Change ProcessDisciplined Change Process A New Set of A New Set of QUALITY MEASURESQUALITY MEASURES Customer SatisfactionCustomer Satisfaction Cost of Poor Quality Cost of Poor Quality Supplier Quality Supplier Quality Internal Performance Internal Performance Design for Design for Manufacturability Manufacturability Will Apply to Manufacturing & Non-Manufacturing Will Apply to Manufacturing & Non-Manufacturing Processes and be Tracked & Reported by Each BusinessProcesses and be Tracked & Reported by Each Business 6 Overview StructureStructure Quality CouncilQuality Council Members: Labs & FunctionsMembers: Labs & Functions “Pipeline” & BB Project Priorities “Pipeline” & BB Project Priorities Training & Certification Training & Certification Measurements & Rewards Measurements & Rewards Communications Communications ChampionsChampions Leadership: Overall Initiative Leadership: Overall Initiative Project Funding Project Funding HR: Training & Rewards HR: Training & Rewards Black BeltsBlack Belts Lead 6Lead 6 Project Teams Project Teams “Measure/Analyze” “Measure/Analyze” “Improve/Control” “Improve/Control” Out with Businesses Out with Businesses Here at CRD Here at CRD Master Black BeltsMaster Black Belts Teach 6Teach 6 Mentor Black Belts Mentor Black Belts Monitor BB Projects Monitor BB Projects Work “Pipeline” Projects Work “Pipeline” Projects A Resource Pool A Resource Pool Team MembersTeam Members Learn/Use 6Learn/Use 6 Tools Tools Work on BB Projects Work on BB Projects Part of The Job Part of The Job Out with Businesses Out with Businesses 6 6 Projects with the GE BusinessesProjects with the GE Businesses Tabulation of GE Six Sigma Results Benefit Target & Update Current benefits level 10.865 MM QPID loading : Carryover from 1999 : 4.059 Completed Projects 2000 :3.313 Active Projects 2000 :3.285 Total : 10.865 MM Key Concepts & ToolsKey Concepts & Tools 6 Overview 6 Overview Changing Focus From Output to ProcessChanging Focus From Output to Process Y Y DependentDependent OutputOutput EffectEffect SymptomSymptom MonitorMonitor X X 1 1 . . . X. . . X N N IndependentIndependent Input-ProcessInput-Process CauseCause ProblemProblem ControlControl Identifying and Fixing Root Causes Identifying and Fixing Root Causes Will Help us Obtain the Desired OutputWill Help us Obtain the Desired Output f (X)f (X) Y =Y = Process CapabilityProcess Capability 6 Overview Sustained CapabilitySustained Capability of the of the Process Process (long term) (long term) USLUSL T T Time 1Time 1 Time 2Time 2 Time 3Time 3 Time 4Time 4 Inherent CapabilityInherent Capability of the of the Process Process (short term) (short term) LSLLSL T T argetarget Over Time, a “Typical” Process Will Shift and Drift by Approximately 1.5Over Time, a “Typical” Process Will Shift and Drift by Approximately 1.5 6 Overview “ “Short Term Centered” versus “Long Term Shifted”Short Term Centered” versus “Long Term Shifted” Six Sigma CenteredSix Sigma Centered LSLLSLUSLUSL T T Process Process CapabilityCapability SHORTSHORT TERM TERM .001.001 ppmppm.001.001 ppmppm +6+6 LONGLONG TERM TERM LSLLSLUSLUSL T T 3.43.4 ppmppm Six Sigma Shifted 1.5Six Sigma Shifted 1.5 Process Process CapabilityCapability Higher Defect Yield in Long Term Process Capability than Short Term Process Capability Higher Defect Yield in Long Term Process Capability than Short Term Process Capability -6-6 4.5 4.5 1.5 1.5 6 Overview Tying it All TogetherTying it All Together shiftshift C C D D A A B B 0.50.5 1.01.0 1.51.5 2.02.0 2.52.5 1 2 3 4 5 61 2 3 4 5 6 C C OO N N T T R R OO L L POORPOOR GOODGOOD TECHNOLOGYTECHNOLOGY POORPOORGOODGOOD A A B B C C D D Good Control/Good Control/ Poor Technology Poor Technology Poor Control/PoorPoor Control/Poor TechnologyTechnology Poor Control/Poor Control/ Good TechnologyGood Technology WORLD CLASS!WORLD CLASS! short termshort term Problem Could be Control, Technology or BothProblem Could be Control, Technology or Both 6 Overview Short Term CapabilityShort Term Capability Short Term Capability RatioShort Term Capability Ratio ( (CpCp) ) CpCp = = LSLLSL - - 6 6 USLUSL ExampleExample USLUSL LSLLSL 3.0 3.0 = = = = -3.0-3.0 6 6 3.03.0 - - ( - 3.0( - 3.0 CpCp = = CpCp = = 1 1 LSLLSLUSLUSL 2.52.5 0.5 0.5 3.03.0 Process MeanProcess Mean T T TargetTarget A 3A 3 Process Process The Potential Performance of a Process, if it Were on TargetThe Potential Performance of a Process, if it Were on Target 6 Overview Long Term CapabilityLong Term Capability ( (CpkCpk) ) CpCpCpkCpk = = Long Term Capability RatioLong Term Capability Ratio ExampleExample CpCp = =1 1 ( (previous chart)previous chart) TargetTarget = = -0.5 -0.5 = = 0 0 CpkCpk1 - 1 - (-0.5 (-0.5 - - 0 0 3 3 = = CpkCpk = = 0.830.83 - - Off-Target PenaltyOff-Target Penalty Target - Target - 3 3 The Potential Performance of a Process, Corrected for an Off-Target MeanThe Potential Performance of a Process, Corrected for an Off-Target Mean LSLLSLUSLUSL 2.52.5 0.5 0.5 3.03.0 Process MeanProcess Mean T T TargetTarget A 3A 3 Process Process 6 Overview Z Z - Scale of Measure - Scale of Measure Z Z = = A Unit of Measure Equivalent A Unit of Measure Equivalent to the Number of to the Number of StandardStandard DeviationsDeviations that a Value is Away that a Value is Away from the from the Target ValueTarget Value -3.0-3.0-0.5-0.53.03.0 Z - Z - ValuesValues USLUSLLSLLSL 2.52.5 0.50.5 3.03.0 = = Process MeanProcess Mean Z Z T T TargetTarget 0 0 A 3A 3 Process Process The Definitions of YieldThe Definitions of Yield Final Test Final Test Process Process ( (Process 4)Process 4) PassPass Process 3Process 3Process 1Process 1Process 2Process 2 100100 ( (Units Tested)Units Tested) 65 65 70 70 82 829191 Yield 1Yield 1Yield 2Yield 2Yield 3Yield 3 Loss 1Loss 1 Loss 3Loss 3RejectsRejects Loss 2Loss 2 9 9 9 9 12 12 5 5 First Time Yield (First Time Yield (YftYft) ) = = Units PassedUnits Passed Units TestedUnits Tested = = 65 65 70 70 = = 0.930.93 RolledRolled Thruput Thruput Yield ( Yield (YrtYrt) ) = = ( (Yield 1)Yield 1)( (Yield 2)Yield 2)( (Yield 3) . . . . Yield 3) . . . . = = 91 91 82 82 65 65 70 70 () = = 0.650.65 100100 91 91 70 70 82 82 Normalized Yield (Normalized Yield (YnmYnm) ) = = = = 1/1/n n ( (YrtYrt) ) (0.65)(0.65) 1/41/4 = = 0.890.89 ( ( n: Total Number of Processes ) n: Total Number of Processes ) 6 Overview Yield ExclusiveYield Exclusive of Reworkof Rework Probability ofProbability of Zero DefectsZero Defects Average Yield Average Yield of All Processesof All Processes 6 Overview The Impact of ComplexityThe Impact of Complexity RolledRolledRolledRolled YieldYield YieldYield Number of OperationsNumber of OperationsNumber of OperationsNumber of Operations 1.001.001.001.00 0.900.900.900.90 0.800.800.800.80 0.700.700.700.70 0.600.600.600.60 0.500.500.500.50 0.400.400.400.40 0.300.300.300.30 0.200.200.200.20 0.100.100.100.10 0.000.000.000.00 1 10 100 1,000 10,000 100.000 1,000,000 1 10 100 1,000 10,000 100.000 1,000,000 1 10 100 1,000 10,000 100.000 1,000,000 1 10 100 1,000 10,000 100.000 1,000,000 Process Mean Centered on Each OperationProcess Mean Centered on Each OperationProcess Mean Centered on Each OperationProcess Mean Centered on Each Operation 1 10 100 1,000 10,000 100.000 1,000,000 1 10 100 1,000 10,000 100.000 1,000,000 1 10 100 1,000 10,000 100.000 1,000,000 1 10 100 1,000 10,000 100.000 1,000,000 RolledRolledRolledRolled YieldYield YieldYield Number of OperationsNumber of OperationsNumber of OperationsNumber of Operations 1.001.001.001.00 0.900.900.900.90 0.800.800.800.80 0.700.700.700.70 0.600.600.600.60 0.500.500.500.50 0.400.400.400.40 0.300.300.300.30 0.200.200.200.20 0.100.100.100.10 0.000.000.000.00 As the Number of Operations Increases, a HighAs the Number of Operations Increases, a High Rolled Yield Requires a High Rolled Yield Requires a High for Each Operation for Each Operation 5 5 4 4 3 3 6 6 6 6 5 5 4 4 3 3 Process Mean Shifted 1.5Process Mean Shifted 1.5at Each Operationat Each Operation 6 Overview BaseliningBaselining & Benchmarking an Existing Process & Benchmarking an Existing Process p (x)p (x) DefectsDefects BenchmarkBenchmark BaselineBaseline EntitlementEntitlement BenchmarkBenchmark.A World-Class Performance.A World-Class Performance EntitlementEntitlement.Achievable Performance Given.Achievable Performance Given the Investments Already Made the Investments Already Made BaselineBaseline.The Current Level of Performance.The Current Level of Performance BaseliningBaselining = = Current ProcessCurrent Process / / BenchmarkingBenchmarking = = Ultimate GoalUltimate Goal Some Basic 6Some Basic 6 -Related Tools-Related Tools 6 Overview Scatter DiagramScatter Diagram Over SleptOver Slept Car WouldCar Would Not Start Not Start WeatherWeather FamilyFamily

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