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What is 6 activity?



                    Six Sigma                                                                                             1. What are the statistics ?
                                                                                                                          2. Solution of the Practical Problem
                                                                                                                          3. What is the 6concept ?
                                                                                                                          4. 6 as the Business Strategy
                                                                                                                          5. 6 Application
                                                                                                                          6. 6 Activity Process
                                                                                                                          7. Comparing other tools
                                                                                                                          8. 6 Philosophy




                                                                                                                                                                        Page 1




                                                                                                    What is 6 activity?                                      1. What are the statistics ?
                           What is Six Sigma?
  Originally: Metric Based on the Statistical Measure Called
                      Standard Deviation                                                                  ◆ Population & Sample                                          Measure 10 samples
                                                                                                                                                                             (Spec. : 100±4)
                                                                                                                                                               LSL                                                 USL
                                                                                                             Population
  Expanded To:                                                                                               N = 1,000                  Total inspection is
                                                                                                                                                               (Lower
                                                                                                                                                               Spec
                                                                                                                                                                                                                   (Upper
                                                                                                                                                                                                                   Spec
                                                                                                                                        impossible !           Limit)     Ⅹ                                        Limit)

     WORLD CLASS QUALITY                                                                                                                                                  Ⅹ
                                                         Low     High                                                                                                   Ⅹ Ⅹ Ⅹ
                                                         Spec    Spec
                                                                                                                   Sample                                               Ⅹ Ⅹ Ⅹ Ⅹ Ⅹ
                    Providing a
                                                                                                                                      Statistical variables     96      97   98       99 100 101 102 103 104
                                                                                                                                      (mean, variance)
    BETTER product or service,                                                                                                        estimate population


                    FASTER, and
                                                                                                          ○ You may say “ This Population is Good because all the sample’s data are located
                                                                VARIATION is the enemy!                    between LSL & USL. BUT, If you estimate the defect rate using statistical analysis,
               at a LOWER COST                                                                             this population has the probability of 2.8% defects per unit.
                                                                                                           Then this is - we call - “An epidemic” quality defect level.
           than our competition.                    "Always know the language of the enemy."              ○ Measuring defect rate on process through an expanding statistical concept,
                                                                                                            we can use measuring process capability.


                                                                      Page 2                                                                                            Page 3




. What is 6 activity?                             2. Solution of the Practical Problem

                                                                                                                     Graphical Meaning of y and 

                                        Shift to            Shifting to Target &
  Precise but not Accurate
                                        Target              Reducing Variation
                                                                        T
                T                                               USL           USL
     USL             USL                                                                Object
                                                                                        of 6 is
                                                                        μ                                                                                                               n
           μ                  Accurate but not Precise                                   Shift to                                                                                       y
                                                                                         Target                                Center of Process:                             y        i1         i

                                           T                                                                                                                                                n
                                  USL              USL                                  Reducing
                                                                                                                                                                                                         y)
                                                                                                                                                                                            n
                                                                                                                                                                                          (yi
                                                                                                                                                                                                               2
                                                                                        variation
                                                                                                                                Process Variance:                               2      i 1

                                           μ                                                                                                                                                            n
                                                                            Reducing
                                                                            Variation                        Process Standard Deviation:                                                     2




                                                                      Page 4                                                                                            Page 5




                                                                                                                                                                                                                            1
Graphical View of Variation and                                                                                  Graphical View of Variation
                       Six Sigma Performance                                                                                            and Six Sigma Performance
                                                                                                                                                        Normal Distribution
                                                                                                                                   Each unit of measure is a numerical value on a continuous scale.
                                                                                                                                                      VARIATION: COMMON AND SPECIAL CAUSES
                                                                                                                       PIECES VARY FROM EACH OTHER:




                 -6    -5    -4    -3   -2   -1                                                                          SIZE                     SIZE               SIZE                 SIZE
                                                          0    +1 +2 +3 +4 +5 +6
                                                                                                                         BUT THEY FORM A PATTERN THAT, IF STABLE, IS CALLED A DISTRIBUTION:
                                                        68.27%
                                                        95.45%
                                                        99.73%                                                                        SIZE                          SIZE                          SIZE

                                                     99.9937%                                                          DISTRIBUTIONS CAN DIFFER IN:

                                                   99.999943%                                                                          LOCATION                       SPREAD                        SHAPE

                                                  99.9999998%

                               Typical Areas under the Normal Curve                                                                   SIZE                                                          SIZE
                                                                                                                                                                    SIZE
                                                                                                                                                                                      . . . OR ANY COMBINATION OF THESE


                                                                         Page 6                                                                                                    Page 7




. What is 6 activity?                                    3. what is the 6 concept ?                               . What is 6 activity?                            3. what is the 6 concept ?



                                       Statistical Definition of 6
                                                                                                                                                         6 as the Business Strategy

                           LSL                Target                     USL
                                                                                                                                        PPM
                                                                                                                                                                     • 1 misspelled word in all of the books
                   6.68%                                                                                                                                               contained in a small library
        3σ                                                                                                                     6                3.4
                                                    σ                                                                                                                • $340 indebtedness per $100 millions assets
                                                                                                                               5               233                   • 1.8 minutes per year
                                     -3                +3                       6 Quality means that area
                                                                                  of the estimated normal                      4              6,210
                                                                                  distribution is located between                                                     • 1.5 misspelled words per page in a book
                 3.4ppm                                                           USL&LSL with 6 .                            3             66,807                   • $6.7 millions indebtedness per $100 millions
                                                                                                                                                                        assets
        6σ                                          σ                             In that case area of                         2         308,537
                                                                                                                                                                      • 24 days per year
                                                                                  the outlier spec.
                                     -6                +6
                                                                                  (In other words estimated
                                                                                  defects) is just 3.4 PPM.
       : Standard Deviation Statistic index measures how much is data apart from target value

                                                                         Page 8                                                                                                    Page 9




. What is 6 activity?                                    3. what is the 6 concept ?                               . What is 6 activity?                              4. 6 as the Business Strategy




                                            6 as the Activity                                                         1. It is a statistical measurement.
                                                                                                                          • It tells us how good our products, services, and processes really are.
                                                                                                                          • 6 helps us to establish our course and gauge our pace in the race for total
                                                                                                                            customer satisfaction.
      What is 6 activity?                                                                                             2. It is a improvement tool.
                                                                                                                         It‟s a full packaged tool applying to design, manufacturing, sales& SVC.
      • In all Design, Manufacturing, and SVC processes
      • Applying for 6 statistic Tools & Processes                                                                    3. It is a business strategy.
                                                                                          Achieving                      • It can greatly help us gain a competitive edge
      • To find factors causing defects
                                                                                           3.4 PPM                       • As you improve the σ rating of a process, the product quality improves and costs
      • Acting the Analysis and Improvement                                          (3.4 Defects Per Million)             go down. Naturally, the customer becomes more satisfied as a result.
      • Through the Defect Reduction, Increase Yield
        & Total Customer Satisfaction                                                                                  4. It is a philosophy.
                                                                                                                         • This is one of working smarter, not harder.
      • Management Innovation Tool contributes to
                                                                                                                         • Also it makes fewer and fewer mistakes in everything we do.
        Management Output



     PPM : Parts per Million


                                                                         Page 10                                                                                                   Page 11




                                                                                                                                                                                                                          2
Ⅰ. What is 6 activity?                                         4. 6 as the Business Strategy                             #. 6 Common term



                                           Harvesting the Fruit of 6


                                                                                     Fruit-bearing 6
                                                                               • Sweet Fruit
                                                                               • Design for Manufacturability
                                                                                                                                                               1. CTQ
                                                                                        Wall of 5
                                                                                                                                                               2. DPU / DPMO
                                                                               • Bulk of Fruit
                                                                               • Process Characterization and                                                  3. Z Value
                                                                                 Optimization
                                                                                                                                                               4. Process Capability Index
                                                                                        Wall of 4
                                                                               • Low Hanging Fruit
                                                                                                                                                               5. Rolled Throughput Yield (RTY)
                                                                               • Seven Basic Tools



                                                                                       Wall of 3
                                                                               • Ground Fruit
                                                                               • Logic and Intuition



                                                                               Page 12                                                                                                           Page 13




#. 6Common term                                                           1. CTQ                                          #. 6 Common term                                                   2. DPU / DPMO




                                                                                                                                       Defects Per Unit : Number of defects per unit
                            Definition of CTQ                                           Typical Tools
                                                                                                                               DPU
                                                                                                                                       → Judging the process as “No good”, we could not know if it had a defect.
                                                                                                                                         So 6 handling it.
      ● Customer states as critical to quality
                                                                            • Customer surveys
          of product, service or process.                                                                                               Ex) A Claim report has 10 blanks, 2 blanks are wrong
                                                                            • Focus Groups Interview                                        DPU= Defect / Unit = 2 / 1 = 2
                                                                            • Customer needs Mapping
      ● Most CTQ’s are customer-driven,
                                                                            • Quality function deployment(QFD)
          but risk, economics, and regulation
                                                                            • Quick Market Intelligence                                Defects Per Opportunity : Number of defects related opportunities per unit
          may drive others.
                                                                            • Logic Tree                                       DPO
                                                                                                                                       → Expanding concept of DPU by opportunities
         Ex.) • Spec. of anything part                                      • Pareto Diagram
              • Accuracy and reliability of billing                                                                                     Ex) A Claim report has 10 blanks, 2 blanks are wrong
                statements                                                                                                                  2 Defect / (1Unit x 10 Opportunity) = 0.2, DPO=0.2
                                                                     ☞ Main purpose of CTQ control is selecting
              • Time to repair                                            the factors to the most important to customer.
              • Courteousness                                             It is not hard to do, but right to do!
                                                                                                                                       Defect Per Million Opportunities : Value of DPO x 1,000,000,
                                                                                                                              DPMO
                                                                                                                                       → Changing DPO to million unit because 6 uses PPM(Part Per Million) usually

                                                                                                                                        Ex) DPMO = 0.2 DPO x 1,000,000 = 200,000

                                                                               Page 14                                                                                                           Page 15




#. 6 Common term                                                          3. Z Value                                      #. 6Common term                                                    4. Process Capability Index




                    Definition of Z Value                                           Concept of Z Value
                                                                                                                              ◆ What is Process Capability?
                                                                                                                                As Unique capability of the process, reflects uniformity degree of producing product.

                              **
     ◆ It is standard normalized value for various
                                                                                                                                     Process Capability Index
         normal distributions*to make easy                               LSL                                   USL
         statistical analysis.                                                               1                                                                                                           m    T
                                                                                                       X -T
                                                                                                  Z=
                                                                                                       σ                        - When the process is stable, it should
     ◆                                                                                                                            be measured by degree of satisfying
         Z is ratio value that difference between
                                                                                           T=μ                                    limits.
                ***
         X(USL or LSL) and target is divided                                                                                                                                             -6σ        -3σ            1σ      +3σ         +6σ
         stadard deviation ().                                      ☞ In a Process, if six standard deviations are             - Computing Cp, Cpk to know                                            process variation
                                                                       between spec.(USL, LSL), then we call                      How much mean is shifted and
                                                                       “6 level” .                                                                                                                    design tolerance
                                                                                                                                  variation is good.
     ◆ That is numeric part of Level.                                  It is good process that has 3.4ppm, that is
                                                                                                                                - Cpk considers shifting mean.                                   Design tolerance
         When Z is 6, it is 6 level.                                   3 or 4 defects per million.                                                                                     Cp =
                                                                                                                                                                                                 Process variation
                                                                                                                                - K value is deference target(T) from
                                                                                                                                  mean.                                                                                    | T-m |
                                                                                                                                                                                        Cpk = Cp(1-K)         K=
     * Normal distribution          : As bell shaped distribution, left side is same as right side by axis mean(μ)                                                                                                 (Upper limit-Lower limit)/2
    ** Standard normal distribution : mean is “0”, standard deviation is “1” normal distribution
   *** USL : Upper Spec Limit / LSL : Lower Spec Limit

                                                                               Page 16                                                                                                           Page 17




                                                                                                                                                                                                                                                 3
#. 6Common term                                              5. Rolled Throughput Yield
                                                                                                                                           Knowledge-gaining Tools
                                                                                                                                               Pareto Diagram of Effects
                                                                                                                                              (for the factors affecting Process)
     ◆ Rolled throughput yield is probability ratio to accept for all processes.                                Size of
                                                                                                               coefficient
               Input
                                                                Object    Productivity elevation through
                       Process 1 :                                        quality improvement
                       99% Accept ratio
                                                   RTY
                                                                Apply     Defect of all processes, Equipment
                                                  Control
                          Process2 : 92%                                  Model Change Loss

                              Process3 :
                              93%                                Tool                  6σ
                                     Final         Process
                                     Inspection     defect
                                                                Method    1person 1Project, Team activity
                                     : 97%           ratio
                                                   Control


       Loss by    Process     Final
      un-control Defect Ratio Good
                                                                             Added Improvement                               (A)     (B)           (C)               (D)                  (E)

      RTY* 0.99 X 0.92 X 0.97 X 0.97 = 85.7%
                                                                              for hidden factory
          =

   * RTY : Rolled Throughput Yield

                                                                        Page 18                                                                                       Page 19




                          Knowledge-gaining Tools                                                                                   Knowledge-gaining Tools
                                     Process Flow Diagram                                                                              Quality Function Deployment (QFD)

                                                                                                                                                                             Design
                                                   Input                                                                                                                    Correlation




                                                                        No
                                              Decision?

                                                                                                                   Customer Requirements
                                                        Yes
                                           Process Step


                                                  Output                                                                                          Design Requirements



                                                                        Page 20                                                                                       Page 21




                            Knowledge-gaining Tools
                                                                                                                                   Knowledge-gaining Tools
                                         Probability Distributions
                                                                                                                                            Cause & Effect Diagram

                                                                                                                    Measurement            Manpower             Materials


                                                                                                                                                          Causes or
                                                                                                                                                            Sources of
                                                                   Exponential                                                                                  Variation                        Effect or
               Normal
                                                                                                                                                                                                Response




                                                                                                                     Miscellaneous          Methods            Machines

               Uniform                                              Parabolic


                                                                        Page 22                                                                                       Page 23




                                                                                                                                                                                                             4
Knowledge-gaining Tools                                                   Knowledge-gaining Tools
                           Failure Mode and Effect Analysis
                                                                                                            Scatter Diagram
                                                                                              (from Doralese Blending & Compression Process)
                                                                                    Tablet
  Component Failure          Failure     S Cause O     D R “Fool Proof” Plan
             Mode            Effect                                                Hardness




           S: Severity,                            O: Occurrence,
           D: Detection,                           R: Risk Priority Number
                              R=S•O•D                                                              Magnesium Stearate Concentration


                                                       Page 24                                                                  Page 25




                           Knowledge-gaining Tools                                                Knowledge-gaining Tools
                                       Regression Modeling                                                       Control Chart
      y
                                                                                   y
                                                                                                                                              UCL


 20
                                         y = 18 - .65x
                                                                                                                                          CENTERLINE
 15

 10
                                                                                                                                               LCL
  5
                                                                                                                   Time

                                                                             x
                     5           10           15            20




                                                       Page 26                                                                  Page 27




#. 6Common term                               6. Other terms                    Ⅱ. Why should we do 6?

      1.   QFD       - Quality function deployment
      2.   FMEA      - Failure Mode & effect analysis.
      3.   ANOVA    - Analysis of Variance
      4.   Gage R&R - Gage Repeatability & reproducibility.
      5.   DOE      - Design of experiments.
      6.   RSM       - Response surface methodology
      7.   DMAIC    - Define measure analyse improve control                                             1. Quality & Failure Cost
      8.   DFR      - Design for reliability.
                                                                                                         2. Paradigm Shift

                                                                                                         3. Character of 6

                                                                                                         4. 6 Case Study




                                                       Page 28                                                                  Page 29




                                                                                                                                                       5
Ⅱ. Why should we do 6?                                                         1. Quality & Failure Rate                             Ⅱ. Why should we do 6?                                    1. Quality & Failure Rate




                                                                                           *
                                                 Trend of Quality Index
                                                                                                                                             “Generally controlled F-Cost has small portion considering of Hidden Loss”
                           SVC
                                                                                                                                                                             Inspection
                           Defect ●                                                 Quality                                                                                                                               Traditional F-Cost
                                                                                                                                                                        SVC           Scrap
                           Rate                                                   Innovation                                                                                                                               ( Easy Definition)
                            (%)                                                                                                                                     Reject                Rework
                                                                                     Tool
                                                    ●
                                                               ●          ●          ○                                                                                                                                   Potential(Additional)
                                                                                                                                                    Design Change                             Loss Opp. Sales            F-Cost
                                                                                                                                                                                                                         (Difficult to measure)
                                                                                                                                                                                                 Delivery Delay
                                                                                    ☆                                                          Long cycle time

                                         ‘93 ‘96 ‘97 ‘98 2002                                                                                  Over Rework                                          Brand Image Down


                                                                                                                                              Office Loss                                                 Over Storage
                         * Average of the SVC Defect rate of Home Appliance products


                                                                                         Page 30                                                                                                         Page 31




Ⅱ. Why should we do 6?                                                             2. Paradigm Shift                                 Ⅱ. Why should we do 6?                                        2. Paradigm Shift




                                                     Paradigm Shift for Quality                                                                                               Comparing 6 with 3

                         Old Belief                                                                   New Belief
                                                                                                                                                     The 3  Company                                    The 6  Company
                                             Appraisal                                                           Appraisal                  • Spends 15~25%of sales dollars on cost         • Spends 5%of sales dollars on cost of
      $                                                            $          $
               Internal&                     & Prevention                               Internal &               & Prevention                 of failure                                      failure
               External Failure              Costs                                      External Failure         Costs
               Costs                                                                    Costs                                               • Produces 66,807 ppm opportunities             • Produces 3.4 ppm opportunities
                        Increased Quality                                                        Increased Quality                          • Relies on inspection to find defects          • Relies on capable processes that don’t
                        means Higher Cost                                                        reduces Total Cost                                                                           produce defects
                                                                                                                                  $
                                                                                                                  4                        • Believes high quality is expensive            • Knows that the high quality producer is
                                                                                                                        5
                                   4                                                                                        6                                                               the low cost producer

                                                                                                                                            • Does not have a disciplined approach          • Use Measure, Analyze, Improve, Control
                                                                                                                                              to gather and analyze data                      and Measure, Analyze, Design

                           Quality Improves                                                          Quality Improves                       • Benchmarks themselves against their           • Benchmarks themselves against the best
                                                                                                                                              competition                                     in the world

          The high quality producer is the low cost producer not expensive.                                                                 • Believes 99% is good enough                   • Believes 99% is unacceptable
   Internal Failure : Scrap / Remake / Supplier Rework
                                                                                                                                            • Define CTQ’s internally                       • Define CTQ’s externally
   External Failure : Cost to Customer / Warranty Cost / Compliant Adjustments / Returned Material
   Appraisal : Inspection / Test / Quality Audits / Test Equipment
   Prevention : Quality Planning / Process Planning / Process Control / Training

                                                                                         Page 32                                                                                                         Page 33




Ⅱ. Why should we do 6?                                                             2. Paradigm Shift                                 Ⅱ. Why should we do 6?                                      3. Character of 6




                                                                                                                                                                    Traditional Quality / 6 Quality Method
                                         Practical Meaning of “99% Good”
                                                                                                                                                   ISSUE          Traditional Approach                      6σ Approach
                             • 20,000 lost articles in mail per hour.
                                                                                                                                                 Index             • %(Defect Rate)                •
                             • Unsafe drinking water almost 15 minutes each day
                                                                                                                                                 Data              • Discrete Data                 • Discrete + Continuous Data
                             • 5,000 incorrect surgical operations per week
                                                                                                                                                 Target            • Satisfaction for Mfg          • Customer Satisfaction
                                                                                                                                                                     Process
                             • 2 short or long landings at most major airports each day
                                                                                                                                                 Range             • Spec Outlier                  • Variation Improvement
                             • 200,000 wrong drug prescription each year
                                                                                                                                                 Method            • Experience + Job              • Experience + Job +
                                                                                                                                                                                                     Statistical Ability
                             • No electricity for almost 7 hours each month
                                                                                                                                                 Action            • Bottom Up                     • Top Down

                                                                                                                                                 Application       • Mfg Process                   • Design, Mfg, Sales, SVC
                                                       4  = 99.38%



                                                                                         Page 34                                                                                                         Page 35




                                                                                                                                                                                                                                                  6
Ⅱ. Why should we do 6?                                   3. Character of 6                              Ⅱ. Why should we do 6?                                         3. Character of 6




                                                                                                                                                Benefits and superiority of 6
                                           Good Point of 6
                                                                                                               Benefits        : - Decrease cost of loss, Improve quality of product and service ,
                                                                                                                                   satisfy the customer
                                                                                                                                 - It can make clear the output of Business.
        • Pursue common goal                       → Innovation through all Biz.                             Superiority        ■ Variety of applications : Can apply all industry include financing Biz.
                                                                                                                                    *
                                                                                                                                ■ 3P Focus & reasonable index for appraisal
        • Control main factors at upstream → Reduce claim and rework                                                               Not only product and service, but also process and quality of human resource
                                                                                                                                   can be clear the goal and status by measuring.
        • Apply Statistics on all Biz.             → Easy to access difficult problem
                                                                                                                                ■ High Effect of Investment
                                                                                                                                  No invest on hardware, only on human resources.
        • Support Statistics S/W                   → Foolproof for statistics                                                   ■ Clearness of effect for cost
                                                                                                                                  Output can be estimated clearly by financial part take part in which control
        • Data analysis by experiment              → Make indistinct facts clear                                                  cost and benefit form the beginning of project.
                                                                                                                                ■ Data driven mind & easy to use statistics Tool.
        • Make decision base on Data               → Exclude wrong ideas & prejudice                                              Through experimental data analysis indistinct fact can be clear.
                                                                                                                                  Exclude experience and prejudice.
                                                                                                                                  Can handle statistics by the S/W package(Minitab).


                                                                                                                   * 3P : Product, Process, People
                                                              Page 36                                                                                                            Page 37




Ⅰ. What is 6 activity?                                   5. 6 Application
                                                                                                                                            Measures of Quality
                                                                                                                Cp: Process Capability Potential (assumes a centered process)

                                                                                                                        USL  LSL   Specification Width
        6 is a tool that applies to all business systems - Design, Manufacturing,
                                                                                                                Cp               
                                                                                                                           6         Process Width
        Sales and SVC
                                                                                                              Cp                                                                                          dpm
                                                                                                              15.0
                                                 Design    Guarantee for the Design completion
                                                                                                               7.0
            De-      R&D                                   in developing stage                                 4.5                                                                                       << 1PPB
            sign      6                                   • Selecting CTQ to meet customer needs              3.0
                                                           • Decision reasonable Tolerance                     2.0                                                                                          .0018
                                                           • Guarantee of the CTQ’s capability analysis        1.67                                                                                       < 1PPM
               6                                                                                              1.33                                                                                            55
                                                           Quality assurance in manufacturing                  1.0                                                                                          2,700
                                                  Mfg.                                                          .9                                                                                          6,900
                               Mfg.                        stage                                                .8                                                                                         16,400
                                                           • Improvement serious problem using S/W              .67                                                                                        45,500
       Sales               Manufacturing                   • Real Time Monitoring system                        .5                                                                                        133,600
       &SVC                     6                            → CTQ Control system                                            LCL         LSL        TARGET       USL      UCL
       Transaction
           6                                    Sales&    Maximizing for sales & SVC
                                                                                                                Cpk: Process Capability (takes into consideration a shift in average)
                                                 SVC       • Improvement cycle time and accuracy
                                                           • Cost Improvement                                              USL  y    y  LSL 
                                                                                                                Cpk  min          or         
                                                                                                                           3            3 


                                                              Page 38                                                                                                            Page 39




                     Formal Definition of a Six Sigma                                                                                      Is It 6 at all cost?
                            Capable Process                                                                   Total Cost


                                                                                                                                                                       Typical
                                                                                                                                                                  Six Sigma Barrier


                                            CP = 2.0
                                                                                                                                                                                   DFSS

                                           CPK = 1.5                                                                                                                           Design for six
                                                                                                                                                                                  sigma



                                           dpm = 3.4
                                                                                                                                                         Optimal Point

                                                                                                                                    2            3            4            5              6          7
                                                                                                                                                          Sigma Rating




                                                              Page 40                                                                                                            Page 41




                                                                                                                                                                                                                    7
Why Six Sigma?                                                                                                     The Cost of Poor Quality
        There is a correlation between a company's COPQ( cost of                                                                           Where Does the Cost of Poor Quality
         poor quality) and the  rating of its key processes
                                                                                                                                                  (Waste or Muda) Come From? ...
              COPQ (% of Sales)
                                                                                                                                                             Internal Failure Costs

        40                                                                                                                                                   External Failure Costs
        35
        30
        25
        20
                                                                                                                                                             Appraisal Costs

                                                                                                                                                             Prevention Costs
                                                                                                                                                                                                                               £
        15
        10
                                                                                                                                                             Lost Opportunity Costs
         5


                               2               3                 4                   5                  6
                                                           Sigma Rating




                                                                               Page 42                                                                                                                Page 43




                                                                                                                       Ⅰ. What is 6 activity?                                                 6. 6 Activity Process
                                       Why Six Sigma?
               A 4 company will spend >10% of revenue on internal and external
                repair                                                                                                                            6 Activity Process(manufacturing & Transaction)
               A 6 company will spend <1% of revenue on internal and external repair
                                                                                                                                 Identify Customer-Driven                                     1. Who are your customers?
                                                                                                                                  CTQ* (Critical to Quality)                                   - Internal / External
                                                                                                                                                                                              2. What do you provide your customers?
                                                                                                                                      Characteristics                                   **    3. What is critical to quality for your customers?
                                                                                                                                                                                       D
                                        DEFECT REDUCTION                                                                       Identify Key Processes that                                    1. What are your internal processes for
                                                                                                                                 cause Defects in a CTQ                                          providing your product or service CTQ‟s to
                Defects / M                                                                                                           Characteristics                                            your customers?
                                                                                                                                                                                              2. Where do defects occur in these processes?
             100K
                              66810                                                                                               For Each Product or
              10K                                                                                                                 Process CTQ                                                 • Practical Problem            •Process Mapping
                                       Average                 6210                                                                                                                   M       • Measurement System             Calculation
               1K                      Company                                                                                 Measure, Analyze, Improve,                                     • Yield Calculation
                                                                                                                                       & Control                                              • Benchmarking        • Cause & Effect Diagram
                         >> 100x                                               233                                                                                                     A
              100                                                                                                                                                                             • Pareto Chart & Stratification

                                                                                                                                                                                              • DOE              • Action Workout Techniques
               10                                                                                                                                                                       I     • Brainstorming    • Piloting
                                                                 “Best in Class”                      3.4                   6is a rigorous analytical
                1                                                                                                                                                                             • Control Mechanism            • Procedures
                    2               3                   4                5                                    7
                                                                                                                            process for solving problem!!!                             C
                                                                                                                                                                                              • Control Chart
                                                                                             6
                    Note: The ± 1.5 sigma shift is included. Sigma
                                                                                                                            * CTQ(Critical To Quality) : Your customers feel that characteristic of product, service or process is critical.
                                                                                                                           ** D : Define
                                                                               Page 44                                                                                                                Page 45




Ⅰ. What is 6 activity?                                               6. 6 Activity Process                           Ⅰ. What is 6 activity?                                               7. Comparing other tools



                           Example of development process apply R&D 6
                                                                                                                                                                           By Improvement Process
                                                                                   Evaluation    Evaluation
                                           Evaluation                              meeting for   meeting for E/S
                                Kick       meeting for                             basic         planning    drawing
       Development              -Off       present condition                       concept       confirm     confirm
                                                                                                                                             Measure          Analysis        Inprovement       Control
         Process
                                                                                                                                             - Symptoms     - Present con- - Improved         - Control by
                                                                                                                               Others                                                                              - Discrete Data
                                                                                                                                             - Frequency      dition Analysis by expert’s       control chart
                                                                                                                                                              • Focusing      Idea            - Process            - Difficult to apply practical
                         Custo- QFD Design Process QFD          Spare    Similar Z Value          Z Value Meeting                                                                                                    problem because of
             R&D         mer    S-1 FMEA FMEA S-2               CTQ      process of CTQ값         optimize, for CTQ                                              experience/                     4M control
              6         Needs                                  Selec-   Data     Analysis       Design    Check                                                technology                                           complextity
                         Survey                                 tion     gathering               improve


                                      E/S Development                         P/L                  P.P
                               E/S Quality drawing              Income P/L   Quality Income P.P Quality
                              making meeting confirm            Parts Making Meeting parts Making meeting                         6        - Define/     - Analysis for   - Optimizing - Control by              - Discrete+Continuous
                                                                                                                                              Measurement statistics         condition by    PTS *                  data
                                                                                                                                            - Variance of - Effect analysis statistical    (CTQ,                  - Easy to apply because
                                                                                                                                              CTQ           caused factors analysis        Benefits)                of supporting statistical
                                                                                                                                                                                                                    software.
                                       CTQ     CTQ       Activity    CTQ                 Z Value of
                                       deci-   Data      for         for new             CTQ
                                       sion    for new   process     parts               confirm
                                               parts     improve-    Confirm                                                * PTS : Project Tracking System
                                               gather-   ment
                                               ing
                                                                               Page 46                                                                                                                Page 47




                                                                                                                                                                                                                                                    8
Ⅰ. What is 6 activity?                                       7. Compare with other tool                         Ⅰ. What is 6 activity?                                     8. 6 Philosophy




                                                       100ppm / 6                                                                                              Focusing Point


                                                                              100ppm / 6 Application                   CTQ(Y) = F( X1, X2, X3, ... Xn )
                 100ppm                           6
                                                                                                                                                                             ● 6 activity is selecting the cost issue
                                                                              → Selecting Line
      • Detecting process            • Control process                                                                             Y                    X                      problem on some system in view of
                                                                              → Do process FMEA
        defects                        variation                                - Selecting Cost issue                                                                         customer.
                                                                                                                          ◆ Dependent        ◆ Independent
                                                                                  process view of customer                                                                     This is we called “CTQ” and
      • Managing Tool                • Improvement Tool                                                                   ◆ Output           ◆ Input-process
                                                                              → Conform CTQ process                                                                            We achieved 6 target through
                                                                              → Sorting the process                       ◆ Effect           ◆ Cause                           the 6 process just selecting CTQ
      • Product managing             • Prevention Control
                                                                                -   Just need control process             ◆ Symptom          ◆ Problem
        compare with spec.             vital few factors
                                                                                -   Important control process                                                                ● Also, 6 activity is focusing
                                                                                -   Law application process
                                                                                                                          ◆ Monitor          ◆ Control
      • Judging each                 • Judging the statistic                                                                                                                    the causing factor(x1,x2...xn),
                                                                                -   Variation improvement
        person‟s Know-How              Data                                                                                                                                     not selecting CTQ itself
                                                                              → 100ppm / 6 application                  X factor effects on CTQ(Y) has
      • Manual Data                  • Simple & Effective                       according to sorting
        gathering & analysis           analysis using the                                                                the vital few 20% & trivial many
                                                                                process
                                       S/W                                                                               80%.



                                                                          Page 48                                                                                                   Page 49




Ⅰ. What is 6 activity?                                          8. 6 Philosophy                                Ⅰ. What is 6 activity?                                     8. 6 Philosophy




                                                                                                                             ◆ Our survival is dependent upon growing the business.
                                              ◆ We don‟t know what we don‟t know.
                                                                                                                             ◆ Our business growth is largely determined by customer satisfaction.
                                              ◆ If we can‟t express what we know in the form                                 ◆ Customer satisfaction is governed by quality, price, and delivery.
                                                of numbers, we really don‟t know much about it.
                                                                                                                             ◆ Quality, price, and delivery are controlled by process capability.

                                              ◆ If we don‟t know much about it,                                              ◆ Our Process capability is greatly limited by variation.
                                                 we can‟t control it.                                                        ◆ Process variation leads to an increase in defects, cost, and cycle time.
                                                                                                                             ◆ To eliminate variation, we must apply the right knowledge.
                                              ◆ If we can‟t control it,
                                                 we are at the mercy of chance.                                              ◆ In order to apply the right knowledge, we must first measure it.
                                                                                                                             ◆ Measure the problem, we„ll get the right knowledge.




                                                                          Page 50                                                                                                   Page 51




Ⅱ. Why should we do 6?                                            4. 6 Case Study                              Ⅱ. Why should we do 6?                                        4. 6 Case Study




                                                 Start & Prosperity                                                                                     Cases of other companies

                       Start : Motorola                                             Prosperity :GE
                                                                                                                                       MOTOROLA                  T I                  G    E                   SONY

      ●   At the beginning of 80’s, In the Japanese                 ●   In 1995 GE launched 6σ process                 Introduce         1987                   1988                   1995                    1997
          market, Motorola’s beeper lost its name                       to overcome a difficult business
          value because of the quality difference                       environment and to challenge
          compared to Japan’s                                           World Class Quality.                           Outcome     Q. Cost Down             Q. Cost Down           Q. Cost Down       By 2000 years
                                                                                                                                     $3.2billion            1988:30%                $3.8billion        Train 2,000
      ●   In 1981 they tried to meet a challenge to                 ●   They made new processes such as                                                      →1993:7.4%                               Black Belts
          improve quality 5 times in 5 years and they                   Productivity,Inventory Return and NPI,
          couldn’t.                                                     but improvement was delayed                    Character Origin of 6σ                                  Adopt to all Biz.     First in Japan
                                                                        because of defects in processes.               -ristics  (Quality level
                                                                                                                                   elevated 100 times
      ●   They developed a consistent process base
                                                                                                                                   in 4 years)
          on statistical knowledge.                                 ●   GE thinks World Class Quality is
                                                                        big challenge. GE will focus on                Remarks     Culture harmony          TOP DOWN           Train and do pjt.     Consult with
      ●   In 1987, they established 6σ goal                             6σ process for next generation .                           Western & Oriental        Quality Train                            6 σ Academy
          as a key initiative.




                                                                          Page 52                                                                                                   Page 53




                                                                                                                                                                                                                         9
Ⅱ. Why should we do 6?                                                  4. 6 Case Study                                   Ⅲ. How to Launch 6?



                                                Output of other companies

                                     Benefits                                          Qualitative output


    Motorola     Motorola reached 5.5σ level in 1992.                                                                                                           1. Key Factor for Success of 6
                 Outcome is $3.2billion from1987 to 1992.

                                                                                                                                                                2. 6 Operating system
                1200
                               Costs                                     ●   6 do the role of Boundaryless Behavior.                                           3. Project tracking system
                1000           Benefits
                                                                         ●   Organization become learning & logical
                 800                                                                                                                                            4. Case study for Infra.
                                                                         ●   Use 6 as worldwide common language.
      G E        600
                                                                         ●   GE believes that 6 would take part
                 400
                                                                             central role in the future.
                 200

                    0
                             96           97         98


                                                                                Page 54                                                                                                            Page 55




Ⅲ. How to Launch 6?                                        1. Key Factor for Success of 6                                 Ⅲ. How to Launch 6?                                          2. 6 Operating system




                    System requirement                                              Methodology                                                                                       Chief of executive division
                                                                                                                                                                                        - 6 Driving
                                                                                                                                                                                        - 6 Involvement & Commitment
    ■ Need Top Down Drive                                        ■ Start at Customer’s voice.
      ● Need Top management’s strong will for 6σ.                   ●   CTQs from Customer’s voice,
      ● Top management’s strong and periodical                          Improve the item which has big impact first!                                                                   Champion
        announcement about 6σ policy.
                                                                                                                                                                                        - 6 Operating


    ■ All employees must participate...                          ■ Need Training Program for All employees
      ●   Not only manufacturing part, but also                     ●   Complete understanding for 6σ program.
          nonmanufacturing part should join the program             ●   Hard training for all employees.
      ●   Focus on Customer’s requirements.                         ●   Need resource investment resolutely.                                                                  Champion
                                                                                                                                                                               Review

    ■ 6 as Pan-Company’s common standard.                       ■ Construct Infra                                                                                     Coaching/Supporting
                                                                                                                                  MBB(Master Black Belt)                                                 Project Team
      ● Common language .(CTQ, σ, Cp,Z ....)                        ●   Need successful case study project.
                                                                                                                                     - Supporting 6σskill                Request supporting              - Operating Project
      ● Avoid personal translation about 6σ.                        ●   Resource reformation for organization and system.
      ● All of Goal and target are represented as σscale.           ●   Reasonable appraisal and reward system.                                                                                          - Achieving 6 level for CTQ
      ● Basic process for all of projects.


                                                                                                                               * Champion Review : Decision making meeting that controls progress by project steps(Selecting theme → Output review)


                                                                                Page 56                                                                                                            Page 57




Ⅲ. How to Launch 6?                                              2. 6 Operating system                                    Ⅲ. How to Launch 6?                                          2. 6 Operating system




                                                    Champion                                                                                                       MBB(Master Black Belt)

                        Definition                                                 Roles                                                        Definition                                               Role

                                                          - Present the Vision
                                                                                                                                                                                 - Support Skill
                                                            • Set the 6 goal
                                                            • Assignment subject for total optimization                                                                            • Coach BB/GB for 6σskill and tools
                                                            • Guide direction and goal of Project                                                                                  • Level Up for 6 skill & tools
                                                                                                                                                                                   • Share best practice
                                                          - Drive 6 Activity                                                      • 6 Technical Leader
          • Chief of 6 operating                           • Continuously lead Activity through strong commitment
                                                                                                                                                                                 - Drive project results
                                                            • Evaluate Output and Share best practice with MBB                     • Full Time Job for 6
          • Chief of business groups                                                                                                                                               • Check the Project by 6σ progress step
                                                          - Involvement                                                                                                            • Report champion about project status and output
            (Chief of OBU, Business                                                                                                • Complete MBB Course or
                                                            • Monitor and support through Champion Review                                                                          • Assure benefits are real
             Executives, Chief of                                                                                                    acquire MBB Cert.
             subsidiary)                                    • Directly support to settle bottleneck for 6σactivity
                                                                                                                                                                                 - Support Projects
                                                          - Support Project
                                                                                                                                                                                   • Mentor BB / GB and Train individuals in tools
                                                            • Lead supporting all department in improvement                                                                        • Support settlement for 6Activity Barrier
                                                              and control step for 6 Project team                                                                                 • continuous management and control for improved process
                                                            • Deciding Investment and allocate resources
                                                            • Generate motives

                                                                                                                                   ☞ It is very important to select excellent MBB and continuously improving skill
       It☞ very important that the Champion gets involved in project and take ownership for 6
         is

                                                                                Page 58                                                                                                            Page 59




                                                                                                                                                                                                                                                      10
Six Sigma Tools and Techniques

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Six Sigma Tools and Techniques

  • 1. What is 6 activity? Six Sigma 1. What are the statistics ? 2. Solution of the Practical Problem 3. What is the 6concept ? 4. 6 as the Business Strategy 5. 6 Application 6. 6 Activity Process 7. Comparing other tools 8. 6 Philosophy Page 1 What is 6 activity? 1. What are the statistics ? What is Six Sigma? Originally: Metric Based on the Statistical Measure Called Standard Deviation ◆ Population & Sample Measure 10 samples (Spec. : 100±4) LSL USL Population Expanded To: N = 1,000 Total inspection is (Lower Spec (Upper Spec impossible ! Limit) Ⅹ Limit) WORLD CLASS QUALITY Ⅹ Low High Ⅹ Ⅹ Ⅹ Spec Spec Sample Ⅹ Ⅹ Ⅹ Ⅹ Ⅹ Providing a Statistical variables 96 97 98 99 100 101 102 103 104 (mean, variance) BETTER product or service, estimate population FASTER, and ○ You may say “ This Population is Good because all the sample’s data are located VARIATION is the enemy! between LSL & USL. BUT, If you estimate the defect rate using statistical analysis, at a LOWER COST this population has the probability of 2.8% defects per unit. Then this is - we call - “An epidemic” quality defect level. than our competition. "Always know the language of the enemy." ○ Measuring defect rate on process through an expanding statistical concept, we can use measuring process capability. Page 2 Page 3 . What is 6 activity? 2. Solution of the Practical Problem Graphical Meaning of y and  Shift to Shifting to Target & Precise but not Accurate Target Reducing Variation T T USL USL USL USL Object of 6 is μ n μ Accurate but not Precise Shift to y Target Center of Process: y i1 i T n USL USL Reducing  y) n  (yi 2 variation Process Variance:   2 i 1 μ n Reducing Variation Process Standard Deviation:    2 Page 4 Page 5 1
  • 2. Graphical View of Variation and Graphical View of Variation Six Sigma Performance and Six Sigma Performance Normal Distribution Each unit of measure is a numerical value on a continuous scale. VARIATION: COMMON AND SPECIAL CAUSES PIECES VARY FROM EACH OTHER: -6 -5 -4 -3 -2 -1 SIZE SIZE SIZE SIZE 0 +1 +2 +3 +4 +5 +6 BUT THEY FORM A PATTERN THAT, IF STABLE, IS CALLED A DISTRIBUTION: 68.27% 95.45% 99.73% SIZE SIZE SIZE 99.9937% DISTRIBUTIONS CAN DIFFER IN: 99.999943% LOCATION SPREAD SHAPE 99.9999998% Typical Areas under the Normal Curve SIZE SIZE SIZE . . . OR ANY COMBINATION OF THESE Page 6 Page 7 . What is 6 activity? 3. what is the 6 concept ? . What is 6 activity? 3. what is the 6 concept ? Statistical Definition of 6 6 as the Business Strategy LSL Target USL  PPM • 1 misspelled word in all of the books 6.68% contained in a small library 3σ 6 3.4 σ • $340 indebtedness per $100 millions assets 5 233 • 1.8 minutes per year -3 +3 6 Quality means that area of the estimated normal 4 6,210 distribution is located between • 1.5 misspelled words per page in a book 3.4ppm USL&LSL with 6 . 3 66,807 • $6.7 millions indebtedness per $100 millions assets 6σ σ In that case area of 2 308,537 • 24 days per year the outlier spec. -6 +6 (In other words estimated defects) is just 3.4 PPM.  : Standard Deviation Statistic index measures how much is data apart from target value Page 8 Page 9 . What is 6 activity? 3. what is the 6 concept ? . What is 6 activity? 4. 6 as the Business Strategy 6 as the Activity 1. It is a statistical measurement. • It tells us how good our products, services, and processes really are. • 6 helps us to establish our course and gauge our pace in the race for total customer satisfaction. What is 6 activity? 2. It is a improvement tool. It‟s a full packaged tool applying to design, manufacturing, sales& SVC. • In all Design, Manufacturing, and SVC processes • Applying for 6 statistic Tools & Processes 3. It is a business strategy. Achieving • It can greatly help us gain a competitive edge • To find factors causing defects 3.4 PPM • As you improve the σ rating of a process, the product quality improves and costs • Acting the Analysis and Improvement (3.4 Defects Per Million) go down. Naturally, the customer becomes more satisfied as a result. • Through the Defect Reduction, Increase Yield & Total Customer Satisfaction 4. It is a philosophy. • This is one of working smarter, not harder. • Management Innovation Tool contributes to • Also it makes fewer and fewer mistakes in everything we do. Management Output PPM : Parts per Million Page 10 Page 11 2
  • 3. Ⅰ. What is 6 activity? 4. 6 as the Business Strategy #. 6 Common term Harvesting the Fruit of 6 Fruit-bearing 6 • Sweet Fruit • Design for Manufacturability 1. CTQ Wall of 5 2. DPU / DPMO • Bulk of Fruit • Process Characterization and 3. Z Value Optimization 4. Process Capability Index Wall of 4 • Low Hanging Fruit 5. Rolled Throughput Yield (RTY) • Seven Basic Tools Wall of 3 • Ground Fruit • Logic and Intuition Page 12 Page 13 #. 6Common term 1. CTQ #. 6 Common term 2. DPU / DPMO Defects Per Unit : Number of defects per unit Definition of CTQ Typical Tools DPU → Judging the process as “No good”, we could not know if it had a defect. So 6 handling it. ● Customer states as critical to quality • Customer surveys of product, service or process. Ex) A Claim report has 10 blanks, 2 blanks are wrong • Focus Groups Interview DPU= Defect / Unit = 2 / 1 = 2 • Customer needs Mapping ● Most CTQ’s are customer-driven, • Quality function deployment(QFD) but risk, economics, and regulation • Quick Market Intelligence Defects Per Opportunity : Number of defects related opportunities per unit may drive others. • Logic Tree DPO → Expanding concept of DPU by opportunities Ex.) • Spec. of anything part • Pareto Diagram • Accuracy and reliability of billing Ex) A Claim report has 10 blanks, 2 blanks are wrong statements 2 Defect / (1Unit x 10 Opportunity) = 0.2, DPO=0.2 ☞ Main purpose of CTQ control is selecting • Time to repair the factors to the most important to customer. • Courteousness It is not hard to do, but right to do! Defect Per Million Opportunities : Value of DPO x 1,000,000, DPMO → Changing DPO to million unit because 6 uses PPM(Part Per Million) usually Ex) DPMO = 0.2 DPO x 1,000,000 = 200,000 Page 14 Page 15 #. 6 Common term 3. Z Value #. 6Common term 4. Process Capability Index Definition of Z Value Concept of Z Value ◆ What is Process Capability? As Unique capability of the process, reflects uniformity degree of producing product. ** ◆ It is standard normalized value for various Process Capability Index normal distributions*to make easy LSL USL statistical analysis. 1 m T X -T Z= σ - When the process is stable, it should ◆ be measured by degree of satisfying Z is ratio value that difference between T=μ limits. *** X(USL or LSL) and target is divided -6σ -3σ 1σ +3σ +6σ stadard deviation (). ☞ In a Process, if six standard deviations are - Computing Cp, Cpk to know process variation between spec.(USL, LSL), then we call How much mean is shifted and “6 level” . design tolerance variation is good. ◆ That is numeric part of Level. It is good process that has 3.4ppm, that is - Cpk considers shifting mean. Design tolerance When Z is 6, it is 6 level. 3 or 4 defects per million. Cp = Process variation - K value is deference target(T) from mean. | T-m | Cpk = Cp(1-K) K= * Normal distribution : As bell shaped distribution, left side is same as right side by axis mean(μ) (Upper limit-Lower limit)/2 ** Standard normal distribution : mean is “0”, standard deviation is “1” normal distribution *** USL : Upper Spec Limit / LSL : Lower Spec Limit Page 16 Page 17 3
  • 4. #. 6Common term 5. Rolled Throughput Yield Knowledge-gaining Tools Pareto Diagram of Effects (for the factors affecting Process) ◆ Rolled throughput yield is probability ratio to accept for all processes. Size of coefficient Input Object Productivity elevation through Process 1 : quality improvement 99% Accept ratio RTY Apply Defect of all processes, Equipment Control Process2 : 92% Model Change Loss Process3 : 93% Tool 6σ Final Process Inspection defect Method 1person 1Project, Team activity : 97% ratio Control Loss by Process Final un-control Defect Ratio Good Added Improvement (A) (B) (C) (D) (E) RTY* 0.99 X 0.92 X 0.97 X 0.97 = 85.7% for hidden factory = * RTY : Rolled Throughput Yield Page 18 Page 19 Knowledge-gaining Tools Knowledge-gaining Tools Process Flow Diagram Quality Function Deployment (QFD) Design Input Correlation No Decision? Customer Requirements Yes Process Step Output Design Requirements Page 20 Page 21 Knowledge-gaining Tools Knowledge-gaining Tools Probability Distributions Cause & Effect Diagram Measurement Manpower Materials Causes or Sources of Exponential Variation Effect or Normal Response Miscellaneous Methods Machines Uniform Parabolic Page 22 Page 23 4
  • 5. Knowledge-gaining Tools Knowledge-gaining Tools Failure Mode and Effect Analysis Scatter Diagram (from Doralese Blending & Compression Process) Tablet Component Failure Failure S Cause O D R “Fool Proof” Plan Mode Effect Hardness S: Severity, O: Occurrence, D: Detection, R: Risk Priority Number R=S•O•D Magnesium Stearate Concentration Page 24 Page 25 Knowledge-gaining Tools Knowledge-gaining Tools Regression Modeling Control Chart y y UCL 20 y = 18 - .65x CENTERLINE 15 10 LCL 5 Time x 5 10 15 20 Page 26 Page 27 #. 6Common term 6. Other terms Ⅱ. Why should we do 6? 1. QFD - Quality function deployment 2. FMEA - Failure Mode & effect analysis. 3. ANOVA - Analysis of Variance 4. Gage R&R - Gage Repeatability & reproducibility. 5. DOE - Design of experiments. 6. RSM - Response surface methodology 7. DMAIC - Define measure analyse improve control 1. Quality & Failure Cost 8. DFR - Design for reliability. 2. Paradigm Shift 3. Character of 6 4. 6 Case Study Page 28 Page 29 5
  • 6. Ⅱ. Why should we do 6? 1. Quality & Failure Rate Ⅱ. Why should we do 6? 1. Quality & Failure Rate * Trend of Quality Index “Generally controlled F-Cost has small portion considering of Hidden Loss” SVC Inspection Defect ● Quality Traditional F-Cost SVC Scrap Rate Innovation ( Easy Definition) (%) Reject Rework Tool ● ● ● ○ Potential(Additional) Design Change Loss Opp. Sales F-Cost (Difficult to measure) Delivery Delay ☆ Long cycle time ‘93 ‘96 ‘97 ‘98 2002 Over Rework Brand Image Down Office Loss Over Storage * Average of the SVC Defect rate of Home Appliance products Page 30 Page 31 Ⅱ. Why should we do 6? 2. Paradigm Shift Ⅱ. Why should we do 6? 2. Paradigm Shift Paradigm Shift for Quality Comparing 6 with 3 Old Belief New Belief The 3  Company The 6  Company Appraisal Appraisal • Spends 15~25%of sales dollars on cost • Spends 5%of sales dollars on cost of $ $ $ Internal& & Prevention Internal & & Prevention of failure failure External Failure Costs External Failure Costs Costs Costs • Produces 66,807 ppm opportunities • Produces 3.4 ppm opportunities Increased Quality Increased Quality • Relies on inspection to find defects • Relies on capable processes that don’t means Higher Cost reduces Total Cost produce defects $ 4 • Believes high quality is expensive • Knows that the high quality producer is 5 4 6 the low cost producer • Does not have a disciplined approach • Use Measure, Analyze, Improve, Control to gather and analyze data and Measure, Analyze, Design Quality Improves Quality Improves • Benchmarks themselves against their • Benchmarks themselves against the best competition in the world The high quality producer is the low cost producer not expensive. • Believes 99% is good enough • Believes 99% is unacceptable Internal Failure : Scrap / Remake / Supplier Rework • Define CTQ’s internally • Define CTQ’s externally External Failure : Cost to Customer / Warranty Cost / Compliant Adjustments / Returned Material Appraisal : Inspection / Test / Quality Audits / Test Equipment Prevention : Quality Planning / Process Planning / Process Control / Training Page 32 Page 33 Ⅱ. Why should we do 6? 2. Paradigm Shift Ⅱ. Why should we do 6? 3. Character of 6 Traditional Quality / 6 Quality Method Practical Meaning of “99% Good” ISSUE Traditional Approach 6σ Approach • 20,000 lost articles in mail per hour. Index • %(Defect Rate) • • Unsafe drinking water almost 15 minutes each day Data • Discrete Data • Discrete + Continuous Data • 5,000 incorrect surgical operations per week Target • Satisfaction for Mfg • Customer Satisfaction Process • 2 short or long landings at most major airports each day Range • Spec Outlier • Variation Improvement • 200,000 wrong drug prescription each year Method • Experience + Job • Experience + Job + Statistical Ability • No electricity for almost 7 hours each month Action • Bottom Up • Top Down Application • Mfg Process • Design, Mfg, Sales, SVC 4  = 99.38% Page 34 Page 35 6
  • 7. Ⅱ. Why should we do 6? 3. Character of 6 Ⅱ. Why should we do 6? 3. Character of 6 Benefits and superiority of 6 Good Point of 6 Benefits : - Decrease cost of loss, Improve quality of product and service , satisfy the customer - It can make clear the output of Business. • Pursue common goal → Innovation through all Biz. Superiority ■ Variety of applications : Can apply all industry include financing Biz. * ■ 3P Focus & reasonable index for appraisal • Control main factors at upstream → Reduce claim and rework Not only product and service, but also process and quality of human resource can be clear the goal and status by measuring. • Apply Statistics on all Biz. → Easy to access difficult problem ■ High Effect of Investment No invest on hardware, only on human resources. • Support Statistics S/W → Foolproof for statistics ■ Clearness of effect for cost Output can be estimated clearly by financial part take part in which control • Data analysis by experiment → Make indistinct facts clear cost and benefit form the beginning of project. ■ Data driven mind & easy to use statistics Tool. • Make decision base on Data → Exclude wrong ideas & prejudice Through experimental data analysis indistinct fact can be clear. Exclude experience and prejudice. Can handle statistics by the S/W package(Minitab). * 3P : Product, Process, People Page 36 Page 37 Ⅰ. What is 6 activity? 5. 6 Application Measures of Quality Cp: Process Capability Potential (assumes a centered process) USL  LSL Specification Width 6 is a tool that applies to all business systems - Design, Manufacturing, Cp   6 Process Width Sales and SVC Cp dpm 15.0 Design Guarantee for the Design completion 7.0 De- R&D in developing stage 4.5 << 1PPB sign 6 • Selecting CTQ to meet customer needs 3.0 • Decision reasonable Tolerance 2.0 .0018 • Guarantee of the CTQ’s capability analysis 1.67 < 1PPM 6 1.33 55 Quality assurance in manufacturing 1.0 2,700 Mfg. .9 6,900 Mfg. stage .8 16,400 • Improvement serious problem using S/W .67 45,500 Sales Manufacturing • Real Time Monitoring system .5 133,600 &SVC 6 → CTQ Control system LCL LSL TARGET USL UCL Transaction 6 Sales& Maximizing for sales & SVC Cpk: Process Capability (takes into consideration a shift in average) SVC • Improvement cycle time and accuracy • Cost Improvement  USL  y y  LSL  Cpk  min  or   3 3  Page 38 Page 39 Formal Definition of a Six Sigma Is It 6 at all cost? Capable Process Total Cost Typical Six Sigma Barrier CP = 2.0 DFSS CPK = 1.5 Design for six sigma dpm = 3.4 Optimal Point 2 3 4 5 6 7 Sigma Rating Page 40 Page 41 7
  • 8. Why Six Sigma? The Cost of Poor Quality  There is a correlation between a company's COPQ( cost of Where Does the Cost of Poor Quality poor quality) and the  rating of its key processes (Waste or Muda) Come From? ... COPQ (% of Sales) Internal Failure Costs 40 External Failure Costs 35 30 25 20 Appraisal Costs Prevention Costs £ 15 10 Lost Opportunity Costs 5 2 3 4 5 6 Sigma Rating Page 42 Page 43 Ⅰ. What is 6 activity? 6. 6 Activity Process Why Six Sigma?  A 4 company will spend >10% of revenue on internal and external repair 6 Activity Process(manufacturing & Transaction)  A 6 company will spend <1% of revenue on internal and external repair Identify Customer-Driven 1. Who are your customers? CTQ* (Critical to Quality) - Internal / External 2. What do you provide your customers? Characteristics ** 3. What is critical to quality for your customers? D DEFECT REDUCTION Identify Key Processes that 1. What are your internal processes for cause Defects in a CTQ providing your product or service CTQ‟s to Defects / M Characteristics your customers? 2. Where do defects occur in these processes? 100K 66810 For Each Product or 10K Process CTQ • Practical Problem •Process Mapping Average 6210 M • Measurement System  Calculation 1K Company Measure, Analyze, Improve, • Yield Calculation & Control • Benchmarking • Cause & Effect Diagram >> 100x 233 A 100 • Pareto Chart & Stratification • DOE • Action Workout Techniques 10 I • Brainstorming • Piloting “Best in Class” 3.4 6is a rigorous analytical 1 • Control Mechanism • Procedures 2 3 4 5 7 process for solving problem!!! C • Control Chart 6 Note: The ± 1.5 sigma shift is included. Sigma * CTQ(Critical To Quality) : Your customers feel that characteristic of product, service or process is critical. ** D : Define Page 44 Page 45 Ⅰ. What is 6 activity? 6. 6 Activity Process Ⅰ. What is 6 activity? 7. Comparing other tools Example of development process apply R&D 6 By Improvement Process Evaluation Evaluation Evaluation meeting for meeting for E/S Kick meeting for basic planning drawing Development -Off present condition concept confirm confirm Measure Analysis Inprovement Control Process - Symptoms - Present con- - Improved - Control by Others - Discrete Data - Frequency dition Analysis by expert’s control chart • Focusing Idea - Process - Difficult to apply practical Custo- QFD Design Process QFD Spare Similar Z Value Z Value Meeting problem because of R&D mer S-1 FMEA FMEA S-2 CTQ process of CTQ값 optimize, for CTQ experience/ 4M control 6 Needs Selec- Data Analysis Design Check technology complextity Survey tion gathering improve E/S Development P/L P.P E/S Quality drawing Income P/L Quality Income P.P Quality making meeting confirm Parts Making Meeting parts Making meeting 6 - Define/ - Analysis for - Optimizing - Control by - Discrete+Continuous Measurement statistics condition by PTS * data - Variance of - Effect analysis statistical (CTQ, - Easy to apply because CTQ caused factors analysis Benefits) of supporting statistical software. CTQ CTQ Activity CTQ Z Value of deci- Data for for new CTQ sion for new process parts confirm parts improve- Confirm * PTS : Project Tracking System gather- ment ing Page 46 Page 47 8
  • 9. Ⅰ. What is 6 activity? 7. Compare with other tool Ⅰ. What is 6 activity? 8. 6 Philosophy 100ppm / 6 Focusing Point 100ppm / 6 Application CTQ(Y) = F( X1, X2, X3, ... Xn ) 100ppm 6 ● 6 activity is selecting the cost issue → Selecting Line • Detecting process • Control process Y X problem on some system in view of → Do process FMEA defects variation - Selecting Cost issue customer. ◆ Dependent ◆ Independent process view of customer This is we called “CTQ” and • Managing Tool • Improvement Tool ◆ Output ◆ Input-process → Conform CTQ process We achieved 6 target through → Sorting the process ◆ Effect ◆ Cause the 6 process just selecting CTQ • Product managing • Prevention Control - Just need control process ◆ Symptom ◆ Problem compare with spec. vital few factors - Important control process ● Also, 6 activity is focusing - Law application process ◆ Monitor ◆ Control • Judging each • Judging the statistic the causing factor(x1,x2...xn), - Variation improvement person‟s Know-How Data not selecting CTQ itself → 100ppm / 6 application X factor effects on CTQ(Y) has • Manual Data • Simple & Effective according to sorting gathering & analysis analysis using the the vital few 20% & trivial many process S/W 80%. Page 48 Page 49 Ⅰ. What is 6 activity? 8. 6 Philosophy Ⅰ. What is 6 activity? 8. 6 Philosophy ◆ Our survival is dependent upon growing the business. ◆ We don‟t know what we don‟t know. ◆ Our business growth is largely determined by customer satisfaction. ◆ If we can‟t express what we know in the form ◆ Customer satisfaction is governed by quality, price, and delivery. of numbers, we really don‟t know much about it. ◆ Quality, price, and delivery are controlled by process capability. ◆ If we don‟t know much about it, ◆ Our Process capability is greatly limited by variation. we can‟t control it. ◆ Process variation leads to an increase in defects, cost, and cycle time. ◆ To eliminate variation, we must apply the right knowledge. ◆ If we can‟t control it, we are at the mercy of chance. ◆ In order to apply the right knowledge, we must first measure it. ◆ Measure the problem, we„ll get the right knowledge. Page 50 Page 51 Ⅱ. Why should we do 6? 4. 6 Case Study Ⅱ. Why should we do 6? 4. 6 Case Study Start & Prosperity Cases of other companies Start : Motorola Prosperity :GE MOTOROLA T I G E SONY ● At the beginning of 80’s, In the Japanese ● In 1995 GE launched 6σ process Introduce 1987 1988 1995 1997 market, Motorola’s beeper lost its name to overcome a difficult business value because of the quality difference environment and to challenge compared to Japan’s World Class Quality. Outcome Q. Cost Down Q. Cost Down Q. Cost Down By 2000 years $3.2billion 1988:30% $3.8billion Train 2,000 ● In 1981 they tried to meet a challenge to ● They made new processes such as →1993:7.4% Black Belts improve quality 5 times in 5 years and they Productivity,Inventory Return and NPI, couldn’t. but improvement was delayed Character Origin of 6σ Adopt to all Biz. First in Japan because of defects in processes. -ristics (Quality level elevated 100 times ● They developed a consistent process base in 4 years) on statistical knowledge. ● GE thinks World Class Quality is big challenge. GE will focus on Remarks Culture harmony TOP DOWN Train and do pjt. Consult with ● In 1987, they established 6σ goal 6σ process for next generation . Western & Oriental Quality Train 6 σ Academy as a key initiative. Page 52 Page 53 9
  • 10. Ⅱ. Why should we do 6? 4. 6 Case Study Ⅲ. How to Launch 6? Output of other companies Benefits Qualitative output Motorola Motorola reached 5.5σ level in 1992. 1. Key Factor for Success of 6 Outcome is $3.2billion from1987 to 1992. 2. 6 Operating system 1200 Costs ● 6 do the role of Boundaryless Behavior. 3. Project tracking system 1000 Benefits ● Organization become learning & logical 800 4. Case study for Infra. ● Use 6 as worldwide common language. G E 600 ● GE believes that 6 would take part 400 central role in the future. 200 0 96 97 98 Page 54 Page 55 Ⅲ. How to Launch 6? 1. Key Factor for Success of 6 Ⅲ. How to Launch 6? 2. 6 Operating system System requirement Methodology Chief of executive division - 6 Driving - 6 Involvement & Commitment ■ Need Top Down Drive ■ Start at Customer’s voice. ● Need Top management’s strong will for 6σ. ● CTQs from Customer’s voice, ● Top management’s strong and periodical Improve the item which has big impact first! Champion announcement about 6σ policy. - 6 Operating ■ All employees must participate... ■ Need Training Program for All employees ● Not only manufacturing part, but also ● Complete understanding for 6σ program. nonmanufacturing part should join the program ● Hard training for all employees. ● Focus on Customer’s requirements. ● Need resource investment resolutely. Champion Review ■ 6 as Pan-Company’s common standard. ■ Construct Infra Coaching/Supporting MBB(Master Black Belt) Project Team ● Common language .(CTQ, σ, Cp,Z ....) ● Need successful case study project. - Supporting 6σskill Request supporting - Operating Project ● Avoid personal translation about 6σ. ● Resource reformation for organization and system. ● All of Goal and target are represented as σscale. ● Reasonable appraisal and reward system. - Achieving 6 level for CTQ ● Basic process for all of projects. * Champion Review : Decision making meeting that controls progress by project steps(Selecting theme → Output review) Page 56 Page 57 Ⅲ. How to Launch 6? 2. 6 Operating system Ⅲ. How to Launch 6? 2. 6 Operating system Champion MBB(Master Black Belt) Definition Roles Definition Role - Present the Vision - Support Skill • Set the 6 goal • Assignment subject for total optimization • Coach BB/GB for 6σskill and tools • Guide direction and goal of Project • Level Up for 6 skill & tools • Share best practice - Drive 6 Activity • 6 Technical Leader • Chief of 6 operating • Continuously lead Activity through strong commitment - Drive project results • Evaluate Output and Share best practice with MBB • Full Time Job for 6 • Chief of business groups • Check the Project by 6σ progress step - Involvement • Report champion about project status and output (Chief of OBU, Business • Complete MBB Course or • Monitor and support through Champion Review • Assure benefits are real Executives, Chief of acquire MBB Cert. subsidiary) • Directly support to settle bottleneck for 6σactivity - Support Projects - Support Project • Mentor BB / GB and Train individuals in tools • Lead supporting all department in improvement • Support settlement for 6Activity Barrier and control step for 6 Project team • continuous management and control for improved process • Deciding Investment and allocate resources • Generate motives ☞ It is very important to select excellent MBB and continuously improving skill It☞ very important that the Champion gets involved in project and take ownership for 6 is Page 58 Page 59 10