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1 SIX SIGMA. 2 Six Sigma Means 3.4 Defects in 1,000,000 - MOTOROLA Six Sigma is a business concept that answers customers demand for high quality and.

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Presentation on theme: "1 SIX SIGMA. 2 Six Sigma Means 3.4 Defects in 1,000,000 - MOTOROLA Six Sigma is a business concept that answers customers demand for high quality and."— Presentation transcript:

1 1 SIX SIGMA

2 2 Six Sigma Means 3.4 Defects in 1,000,000 - MOTOROLA Six Sigma is a business concept that answers customers demand for high quality and Defect-free Business process. Six Sigma was born in Motorola and developed by Mikel J. Harry. Motorola won Malcolm Baldridge Quality Award. Six Sigma is carried out as projects and mostly uses DMAIC method

3 3 Eg: Godrej -G E Assembly Plant Defective Components were coming at the rate of 3,00,000 for one Million Parts. Applying Six Sigma saved Rs 4 Crores Mr. Vijay Krishna, C.E.O, Godrej-G E. Were not talking about intangible savings here. Six Sigma has given us the power to measure and control costs. And that goes straight to our bottom line

4 4 PROCESS CAPABILITY Process capability is simply a measure of how good a metric is performing against established standard(s). Spe c Out of Spec In Spec Probabil ity Spec (Low er) Spec (Upp er) In Spec Out of Spec Probab ility Upper and Lower Standards (Specifications) Single Standard (Specification)

5 5 CONCEPT OF SIX SIGMA Process Variability Cp Cp Total Amount Outside Limits Typical Action to be taken 2 σ % (45,500 ppm) Heavy Process Control, Sorting rework, Etc. 3 σ ppmHeavy process Control, Inspection 4 σ ppmReduced Inspection, Selected use of Control Charts USL LSL

6 6 CONCEPT OF SIX SIGMA Process Variability Cp Cp Total Amount Outside Limits Typical Action to be taken 5 σ ppmSpot Checking, Selected use of Control Charts 6 σ ppmReduced for Control, Uniformity in process inputs USL Process LSL Cp = Design Width / Process Width Mean Cp = USL –LSL / UCL - LCL

7 7 SIGMA SCALE OF DEFECTS(1.5 σ shift) SIGMADEFECT RATE (PPM) COST OF POOR QUALITY (% Sales) Competitive Level 6 σ 3.4< 10%World Class 5σ5σ 23310%-15%World Class 4σ4σ 6,21015%-20%High Quality 3σ3σ 66,80720%-30% Industry Average 2σ2σ 3,08,53730%-40%Industry Average 1σ1σ 6,90,000> 40%Non-Competitive

8 8 Six Sigma Implementation Five-phases process 1.Establishing Management Commitment 2.Information Gathering 3.Training 6.Conducting Six Sigma Projects 5.Business Process to Be improved are chosen 4.Developing Monitoring Systems Continuous Improvement

9 9 Six Sigma - Three Dimensions Tools Organization Methodology Process variation LSLUS L Upper/Lower specification limits Regression Driven by customer needs Enabled by quality team. Led by Senior Mgmt Define Measure AnalyzeImproveControl Process Map Analysis Pareto Chart

10 10 DMAIC PROCESS Define Measure Analyze Improve Control DMAIC

11 11 DEFINE Determine Bench mark Determine Customer requirements Set Baseline Get Customer Commitment Map Flow process

12 12 MEASURE Develop Defect Measurement Collect Data Develop Data Collection process Create Forms Compile and Display Data

13 13 ANALYSE Verify Data Test Conclusions Draw Conclusions From Data Determine Improvement Opportunities Determine Root Causes

14 14 IMPROVE Create Improvement Ideas Experiment Create Models Set Goals Create Problem Statement Create Solution Statement Implement Improvement Methods

15 15 CONTROL Monitor Improvement Progress Assess Effectiveness Measure Improvement Statistically Make Needed Adjustments

16 16 ENIGMA OF SIX SIGMA Six Sigma 6 σ

17 17 SIX SIGMA BENCHMARKS K 10K 1K (0.25ppm) Restaurant Bills Prescription writing Payroll processing Order write-up Journal Vouchers Wire transfer Air baggage handling Best in class Air flight Fatality Rate Average company Material lot Rejected

18 18 Table 1: Companies And The Year They Implemented Six Sigma Company NameYear Began Six Sigma Motorola (NYSE:MOT)MOT1986 Allied Signal (Merged With Honeywell in 1999) 1994 GE (NYSE:GE)GE1995 Honeywell (NYSE:HON)HON1998 Ford (NYSE:F)F2000

19 19 Table 2: Six Sigma Cost And Savings By Company YearRevenue ($B)Invested ($B) % Revenue Invested Savings ($B) % Revenue Savings Motorola (e)ND Allied Signal ND GE Honeywell ND ND Key: $B = $ Billions, United States (e) = Estimated, Yearly Revenue Could Not Be Found ND = Not Disclosed Note: Numbers Are Rounded To The Nearest Ten

20 20 The Quality Team Master Black Belt Black Belt Green Belt - Thought Leadership - Expert on Six Sigma - Mentor Green and Black Belts - Thought Leadership - Expert on Six Sigma - Mentor Green and Black Belts -Backbone of Six Sigma Org -Mentor Green Belts - Full time resource - Deployed to complex or high risk projects -Backbone of Six Sigma Org -Mentor Green Belts - Full time resource - Deployed to complex or high risk projects - Part time or full time resource -Deployed to less complex projects in areas of functional expertise - Part time or full time resource -Deployed to less complex projects in areas of functional expertise

21 21 Scope of Six Sigma Manufacturing Service Industries Hospitals Insurance Call Centre

22 22


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