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SixSigmaOverviewPresentedbyAnnGreenCertifiedConsumerDriven6-SigmaBlackBelt Passion+Execution=FastandLastingResultsSixSigmaFocusDelightingthecustomerthroughflawlessexecutionRapidbreakthroughimprovementAdvancedbreakthroughtoolsthatworkPositiveanddeepculturechangeRealfinancialresultsthatimpactthebottomline WhatisSixSigma?VisionPhilosophyAggressivegoalMetric(standardofmeasurement)BenchmarkMethodVehiclefor:CustomerfocusBreakthroughimprovementContinuousimprovementPeopleInvolvement WhatisSixSigma?Bottomline:SixSigmaDefinesthegoalsofthebusinessDefinesperformancemetricsthattietothebusinessgoalsIdentifies,usingperformancemetrics,projectsthatwillyieldclearbusinessresultsAppliesadvancedqualityandstatisticaltoolstoachievebreakthroughfinancialperformance Sigmaisastatisticalunitofmeasurethatreflectsprocesscapability.Thesigmascaleofmeasureisperfectlycorrelatedtosuchcharacteristicsasdefects-per-unit,parts-permilliondefective,andtheprobabilityofafailure/error(DistributionShifted±1.5s)2308,537366,80746,210523363.4sPPMProcessCapabilityDefectsperMillionOpp.Copyright1995SixSigmaAcademy,Inc.SixSigmacorrespondstopartsperbillionifprocessiscenteredSixSigma-Goal 3Sigma6Sigma5Sigma4Sigma93.32%99.379%99.9767%99.99966%HistoricalCurrentIntermediateLong-termSigmaLong-TermYieldStandardSixSigma-PerformanceTarget 99.99966%Good(6Sigma)20,000lostarticlesofmailperhourUnsafedrinkingwaterforalmost15minuteseachday5,000incorrectsurgicaloperationsperweekTwoshortorlonglandingsatmostmajorairportseachday200,000wrongdrugprescriptionseachyearNoelectricityforalmostsevenhourseachmonthSevenarticleslostperhourOneunsafeminuteeverysevenmonths1.7incorrectoperationsperweekOneshortorlonglandingeveryfiveyears68wrongprescriptionsperyearOnehourwithoutelectricityevery34years99%Good(3.8Sigma)SixSigma--PracticalMeaning IssueClassicalSixSigmaAnalyticalPerspectivePointEstimateVariabilityManagementCost&TimeQuality&TimeManufacturabilityTrial&ErrorRobustDesignTolerancingWorstCaseRootSumofSquaresVariableSearchOneFactor@TimeDOEProcessAdjustmentTweakingSPCChartsProblemsFixingPreventingProblemSolvingExpertBasedSystemsBasedAnalysisExperienceDataFocusProductProcessBehaviorReactiveProactiveSuppliersCostRelativeCapabilityOutlookShortTermLongTerm©1994Dr.MikelJ.Harry-V4.0SixSigma--AsAValue IssueClassicalSixSigmaOutlookShortTermLongTermDecisionMakingIntuitionProbabilityDesignPerformanceProducibilityAimCompanyCustomerOrganizationAuthorityLearningTrainingLuxuryNecessityChainofCommandHierarchyEmpoweredTeamsDirectionSeatofPantsBenchMark/MetricsGoalSettingRealisticPerceptionReach-OutStretchPeopleCostCompetitiveAdvantageControlCentralizedLocalizedImprovementAutomationOptimization©1994SixSigmaAcademySixSigma--AsAValue ....ToProduceImprovedRolledThroughputYield,DefectsPerUnit(DPU)DefectsPerMillionOpportunities(DPMO)ReducedCostofPoorQuality(COPQ)ImprovedCapacityandProductivityReducedVariationInOurProcesses/Products$$’sAProblemSolvingMethodology CharacterizeOptimizeBreakthroughUSLTLSLUSLTLSLTUSLLSLUSL’LSL’TheStrategyCustomerFocused-BothInternally&Externally WhichBusinessFunctionNeedsIt?Aslongasthereisaprocessthatproducesanoutput,whetheritisamanufacturedproduct,data,aninvoice,etc…,wecanapplytheSixSigmaBreakthroughStrategy.Fortheseprocessestoperformtoacustomerstandardtheyrequirecorrectinputs!!!6SigmaMethodsMFG.DESIGNSERVICEPURCH.MAINT.ADMIN.QAMarketing IfwearesogoodatX,whydoweconstantlytestandinspectY?YDependentOutputEffectSymptomMonitorX1...XNIndependentInput-ProcessCauseProblemControlTogetresults,shouldwefocusourbehaviorontheYorX?f(X)Y=FocusonXratherthanY,asdonehistorically©1994SixSigmaAcademyTheFocusofSixSigma IsYourLeadershipOnBoard?“Everyonehasthewilltowin,fewhavethewilltoworktowin.”--BobbyKnightSixSigmaonlyworkswhenLeadershipispassionateaboutexcellenceandwillingtochange.FundamentalsofLeadershipChallengetheprocessInspireasharedvisionEnableotherstoactModelthewayEncouragetheheartSixSigmaisacatalystforleaders BreakthroughStrategyCharacterizationPhase1:MeasurementPhase2:AnalysisOptimizationPhase3:ImprovementPhase4:Control©1994SixSigmaAcademyTheBreakthroughPhases TheBreakthroughStrategyABCDEFG1SelectOutputCharacteristic2DefinePerformanceStandards3ValidateMeasurementSystem4EstablishProductCapability5DefinePerformanceObjectives6IdentifyVariationSources7ScreenPotentialCauses8DiscoverVariableRelationships9EstablishOperatingTolerances10ValidateMeasurementSystem11DetermineProcessCapability12ImplementProcessControlsApplicationProjectsBreakthroughCookbook(ProductBenchmarking)(ProcessBaselineAnalysis)ManagementLeadersManagement&TechnicalLeadersYi=fX1,...,XNGoal:MeasureAnalyzeImproveControl©1994SixSigmaAcademyProductCapabilityAnalysisProcessCapabilityAnalysisFocusontheY’sFocusontheX’sDefineRecognize TimePerformanceGOODBAD3Sigma6SigmaThisDrivesBreakthroughImprovementSixSigmaBreakthrough Dataisderivedfromobjects,situations,orphenomenonintheformofmeasurements.Dataisusedtoclassify,describe,improve,orcontrolobjects,situations,orphenomenon.1.Weonlyuseexperience,notdata.2.Wecollectdata,butjustlookatthenumbers.3.Wegroupthedatasoastoformchartsandgraphs.4.Weusecensusdatawithdescriptivestatistics.5.Weusesampledatawithdescriptivestatistics.6.Weusesampledatawithinferentialstatistics.LevelsofAnalysis:Whatlevelarewe??TheFoundationoftheSixSigmaTools WhySixSigma?ExecutivePerspective“2,400processimprovementsweremade,reducingdefectsby61percent-yielding$350millioninannualizedcostsavings.”--LarryBossidy,ChairmanandChiefExecutiveOfficer,AlliedSignal“SixSigma—GEQuality2000—willbethebiggest,themostpersonallyrewardingand,intheend,themostprofitableundertakinginourhistory.”--JackWelch,ChairmanandChiefExecutiveOfficer,GE“Theresimplyaren’tmanyskepticsofJackWelchorLarryBossidy.WhilebothcompanieshavementionedSixSigma,webelieveinvestorshavenotfullyappreciatedthepowerorthepotentialofthisprocesstogeneratelow-riskearningsgrowthandsharegains.”--JenniferPokrzywinski,FirstCallReport,MorganStanleyAnalyst WhySixSigma?“Quality...isthenextopportunityforourCompanytosetitselfapartfromitscompetitors......Dramaticallyimprovedqualitywillincreaseemployeeandcustomersatisfaction,willimprovesharepriceandprofitability,andwillenhanceourreputation....Thisqualitydrivewillrequirethepassionatecommitmentofallofyoutomakeithappen...ASixSigma2000targetwillrequireasignificantcommitmentofresourcesandyourstrong,highlypersonalcommitmenttotheobjective.”J.F.Welch,10/15/95JackWelch’s“Vision2000” EachBlackBeltProjectaverages$250,000savingstothebottomline.CostofPoorQuality40%35%30%25%20%15%10%5%3.4233621066,807308,537691,462CostofFailure(%Sales)DPMO654321SigmaAonesigmashiftwillresultin20%marginimprovement,12-18%capacityincrease,12%reductioninorredeploymentofemployees,and10-30%capitalreduction. WhatisCostofPoorQuality?Inadditiontothedirectcostsassociatedwithfindingandfixingdefects,“CostofPoorQuality”alsoincludes:ThehiddencostoffailingtomeetcustomerexpectationsthefirsttimeThehiddenopportunityforincreasedefficiencyThehiddenpotentialforhigherprofitsThehiddenlossinmarketshareThehiddenincreaseinproductioncycletimeThehiddenlaborassociatedwithorderingreplacementmaterialThehiddencostsassociatedwithdisposingofdefectsFormostcompaniestoday,thecostofpoorqualityislikelytobe25%ofsales.InalmosteverycompanywheretheCOPQisunknown,theCOPQexceedstheprofitmargin. Howfarcaninspectiongetusto6Sigma?(DistributionShifted±1.5s)s23456PPM308,53766,8076,2102333.4GettingThereThroughInspectionUnlessyouhaveabsolutely100%perfectinspection,themoredefectsyoucreate,themoredefectsescapetothecustomer.TotalDefects/UnitEscapingDefects/UnitTheoryofDefects Task:Countthenumberoftimesthe6thletterofthealphabetappearsinthefollowingtext.Thenecessityoftrainingfarmhandsforfirstclassfarmsinthefatherlyhandlingoffarmlivestockisforemostinthemindsoffarmowners.Sincetheforefathersofthefarmownerstrainedthefarmhandsforfirstclassfarmsinthefatherlyhandlingoffarmlivestock,thefarmownersfeeltheyshouldcarryonwiththefamilytraditionoftrainingfarmhandsoffirstclassfarmsinthefatherlyhandlingoffarmlivestockbecausetheybelieveitisthebasisofgoodfundamentalfarmmanagement.GettingThereThroughInspection MotorolaTexasInstrumentsABB(AseaBrownBoveriLTD.)AlliedSignalGEBombardierNokiaToshibaDuPontAmericanExpressBBAFordDowChemicalJohnsonControlsNorandaCompaniesImplementingSixSigma SixSigmaOverviewOverallPerspectiveManufacturingProcessPictureDefectsandVariationVariationandProcessCapabilityProcessCapabilityandImprovementTheDefectEliminationSystem CustomerRequirementsProcessCapabilitiesTechnology(Design)CapabilitiesMaterialsCapabilitiesPeopleCapabilitiesGreatDesignsPredictableFlexibleFactoriesCustomerDelightSafetyRolledThroughputYieldProductCostCapacity/CycleTimeMaterialsManagement&InventoryOverallPerspective SixSigmaisaboutidentifying/quantifyingandeliminatingtheHiddenFactorythroughDefectReductionandultimatelyDesignfor6Sigma90%YieldAfterInspectionorTestEachdefectmustbedetected,repairedandplacedbackintheprocess.ThisresultsinWasted:TimeMoneyResourcesFloorSpaceScrapReworkHiddenFactoryNOTOKOperationInputsInspectFinalTestYieldOK90%CustomerQualityDefectsandtheHiddenFactoryThisclassicapproachtocalculatingyielddoesnotaccountforthehiddenfactory.Describedbelowisanyprocessthatmeetsacustomerneed RolledThroughputYieldVersusFirstTimeYield66%¹90%...whynot?Scrap90%CustomerQualityReworkHiddenFactoryNOTOKYieldAfterInspectionorTestOperationInputsInspectFinalTestYield=OKProcessABC90%Yield90%Yield81%73%FinalTestDUsing“finaltestyield”ignoresthehiddenfactory.Finaltestperformanceisafunctionofinspection&testnotactualdefectdata.Rolled-ThroughputYieldFinalTestYield90%Yield66%90%YieldRolledYield WhatCausesDefects?ExcessVariationdueto:ManufacturingprocessesSupplier(incoming)materialvariationUnreasonablytightspecifications(tighterthanthecustomerrequires)InadequateDesignMarginUnstablePartsandMaterialsInsufficientProcessCapability DissectingProcessCapabilityDefectsProcessCapabilityInadequateDesignMarginInadequateProcessCapabilityUnstableParts&MaterialsDefectsAcceptablePremiseof6Sourcesofvariationcanbe:IdentifiedQuantifiedEliminatedorControlledLSLUSL HowDoWeImproveCapabilityOurOutputs(Y’s)aredeterminedbyourInputs(X’s).IfweknowenoughaboutourX’swecanaccuratelypredictYwithouthavingtomeasureit.Ifwedon’tknowmuchaboutourX’s,thenwehavetoresorttoinspectionandtest(nonvalueaddedoperations).ByknowingandcontrollingtheX’s,wereducethevariabilityinY,whichdecreasesthenumberofdefects,improvesRTY,cycletime,etc.Wecanalsoeliminateorreduceinspection,test,andrework. SixSigma,MetricsandContinuousImprovementSixSigmaischaracterizedby:definingcriticalbusinessmetricstrackingthemimprovingthemusingproactiveprocessimprovementSixSigma’sprimarymetricisDefectsperUnit(DPU),whichisdirectlyrelatedtoRolledThroughputYield(Yrt)Yrt=e-dpuCostofPoorQualityandCycleTime(Throughput)aretwoothers SUPPLIERProcessStep1Processstep2CUSTOMERProcessstep3RECORDDEFECTSRECORDDEFECTSRECORDDEFECTSRECORDDEFECTSRECORDDEFECTSMEASURECONTROLIMPROVEANALYZECONTINUOUSIMPROVEMENTMODELPROCEDURETIMEGOALTRENDCHARTACTIONPLANACTIONNAMEDATEVitalFewIdentificationContinuousImprovementThefollowingvisualillustrateshowthesystemcanworkY1Y2Y3Yrt MetricsDefectsperunit(DPU)drivesplant-wideimprovementDefectspermillionopportunities(DPMO)allowsforcomparisonofdissimilarproductsSigmalevelallowsforbenchmarkingwithinandacrosscompanies CalculatingtheProductSigma-LevelCalculateDefectsperUnit(DPU):DPU=Total#ofDefectsTotal#ofUnitsProducedCalculateDefectsperMillionOpportunities(DPMO):GotoaSigmaChartandEstimatetheSigmaLevelDPMO=DPOx1,000,000TotalOpportunitiesforErrorinOneUnitCalculateDefectsperOpportunity(DPO):DPO=DPU(#ofOpportunitiesforErrorinOneUnit) CalculatingYieldCalculateYieldYield=e-DPU(UsingPoissonApproximation)OrYield=(1-DPO)#ofOpportunitiesRolledThroughputYield=Y1*Y2*Y3*Y… Thefollowingexampletracksactualproductiondataforonemonthinatransformerfactory.Listedaretheprocesssteps.Noticeengineeringandpurchasingarelistedaswell.ExamplefromDiscreteManufacturing ProcessSteps,Defects,UnitsandDPU(1)Whichthreeprocessareastoattackfirst? ProcessSteps,Defects,UnitsandDPU(2)TanksPaintMaterialsDefectsperunitdrivesplantwideimprovement BenchmarkingprocessstepsandproductProcessSteps,Complexity,andSigmaLevel RolledThroughoutYield=18.4AlthoughtheFirstTimeYieldattheFinalTestis99.8%,only18.4%ofthetransformersmakeitthroughthefactorywithoutrework.ProcessSteps,FTYandRTY DynamicsoftheSystemEnsureyouReviewtheCostsandCustomerImpactofeachprocessDrivesplantwideimprovementfocusDrivesSBUwidebenchmarkingDefectdatadrive’sprojectteamimprovementRolledThroughoutYield=18.4 50%ReductioninDefectsRolledThroughputYieldimprovedfrom18.4%to43%(134%improvement).Sigmawentfrom3.99to4.23. TrackingTrendsinMetricsOurobjectiveistotrackthetrendsintheMetricstoestablish,basedonfact,ourimprovements.ThesemetricscanbeDefectsPerUnit,PartsPerMillionDefective,Time,Defects,RolledThroughputYield,etc. ---------------------------------------SweetFruitDesignforManufacturability,DesignforSixSigmaBulkofFruitProcessCharacterizationandOptimizationLowHangingFruitSevenBasicToolsGroundFruitLogicandIntuition---------------------------------------Wedon'tknowwhatwedon'tknowWecan'tactonwhatwedon'tknowWewon'tknowuntilwesearchWewon'tsearchforwhatwedon'tquestionWedon'tquestionwhatwedon'tmeasureHence,Wejustdon'tknow3Wall,BeatUpSuppliers4Wall,ImproveProcesses5Wall,ImproveDesigns©1994Dr.MikelJ.Harry-V4.0HarvestingtheFruitofSixSigma 0.000.010.101.0010.00100.001000.0010000.00100000.001000000.001.52.02.53.03.54.04.55.05.56.0Shifted1.5sShifted1.5sAABBZor“Sigma”ScaleZor“Sigma”ScalePPMPPMAxisAxisCenteredCenteredSigmaLevelisdeterminedbyDefects6Sigmageneratesonly3.4defectspermillionopportunitiesoverlongtermexaminationPPMConversionChart CTQ1,…,CTQLCTD1,…,CTDMCTC1,…,CTCNProducerRequirementsCTS1,…,CTSKCustomerNeedsThevitalneedsofthecustomeraretranslatedintocritical-to-satisfactioncharacteristics(CTSs).TheCTSsaretranslatedintocriticalrequirementsrelatedtoquality,delivery,andcost.TranslatingNeedsIntoRequirements SuccessstoriesEducationandtrainingStretchgoalsRecognizingENTITLEMENTEstablishingmeaningful,focusedmetricsVisibletop-downleadershipDeploymentSuccess:ImplementationSuccessFactors SixSigmaDirectlyaffectsquality,cost,cycletimeandfinancialresultsFocusesonthecustomerandcriticalmetricsDirectlyattacksvariation,defectsandthehiddenfactoryInsuresapredictablefactory