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QIAQIA1ImproveQualityReduceCostProductivityImprovesCaptureMarketProvidesjobsandmorejobsModelsoftherelationshipsaffectingqualityandbusinessperformanceDeming’sModel:lessrework,lessscrapIncreasecycletime,increasethroughputbetterquality,lowerpriceOverallsocietybenefitsImproveReduceProductivityCapt2COSTOFPOORQUALITY(COPQ)ExternalFailureCostsWarrantyAdjustmentsRepairsCustomerServiceReturnedGoodsReturnedRepairedGoodsProductRecallsProductLiabilitySuitsOpportunityCosts……………InternalFailureCostsScrapReworkRE-INSPECTIONofReworkDowngradingBecauseofDefectsLossesCausedbyVendorScrapDowntimeCausedbyDefectsFailureAnalysis……………..AppraisalCostsReceivingInspectionIn-processInspectionLaboratoryInspectionOutsideLaboratoryEndorsementsSetupforTestingMaintenanceofTestEquipmentQualityAuditsCalibrationofQualityEquipment………..PreventionCostsQualityEngineeringDesignandDevelopmentofQualityEquipmentDesignVerificationandReviewtoEvaluatetheQualityofNewProductsQualityTrainingQualityImprovementProjectsQualityDataGatheringAnalysisandReportingOtherProcessControlActivitiesUsedtoPreventDefects………………COSTOFPOORQUALITY(COPQ)Ext3LostOpportunityScrapReworkInspectionWarrantyRejectsLostsalesLatedeliveryEngineeringchangeordersLongcycletimesExpeditingcostsExcessinventoryTheCostofPoorQuality(COPQ)“Iceberg”TraditionalQualityCostsAdditionalCostsofPoorQuality(intangible)(tangible)4-8%25-35%(EasilyIdentified)(Difficultorimpossibletomeasure)LostCustomerLoyaltyMoreSetupsLostOpportunityScrapReworkIns4SixSigmaPhilosophy
WeareinbusinesstomakemoneyWemakemoneybysatisfyingneedsWeareabletosatisfyneedsbydoingEveryneed/dopairisaninteractionTheaimofcustomerfocusisonimprovingneed/dointeractionRepetitionofthesameactionconstituteaprocessImproveourbusinessmeansimprovementofourprocessesCustomersneedproducts/serviceson-time,withzerodefects,withlowercostAsprocesscapabilityimproves,theproductqualityincreasesAsqualityincreases,costsandcycle-timegodown…………...Thereductionofdefects,cycle-time,costleadstoimprovedcustomersatisfactionAscustomersatisfactionimproves,thelikelihoodofdoingbusinessincreasesAsbusinessincreases,we(asindividualandsociety)growandprosperSixSigmaPhilosophyWearein5WhatisSixSigma?Sigmaisastatisticalunitofmeasurewhichreflectsprocesscapability.Thesigmascaleofmeasureisperfectlycorrelatedtosuchcharacteristicsasdefects-per-unit,partspermilliondefective(PPM),andaprobabilityofafailure/error.Thesigmavalueindicateshowoftendefectsarelikelytooccur.Thehigherthesigmavalue,thelesslikelyaprocesswillproducedefects.Assigmaincreases,costsgodown,cycletimegoesdown,andcustomersatisfactiongoesup.WhatisSixSigma?Sigmaisas6Whatisthemeaningofquality???99%Good(3.8Sigma)
99.9997%Good(6Sigma)20,000lostarticlesofmailperhour SevenarticlesofmaillostperhourUnsafedrinkingwaterforalmost Oneunsafeminuteeverysevenmonths15minuteseachday5,000incorrectsurgicaloperations 1.7incorrectoperationsperweekperweek2shortorlonglandingsatmostmajor oneshortorlonglandingeveryfiveairportseachday yearsateachairport200,000wrongdrugprescriptionsperyear 68wrongdrugprescriptionsperyearNoelectricityforsevenhourseachmonth Onehourwithoutelectricityevery 34yearsWhatisthemeaningofquality7SixSigmaIs….SixSigmaisdisciplinedmethodologyforcontinuousimprovementforReducingprocessvariabilityandkeepingitreducedachievebenefitsfromimprovementsin:betterproduct/processqualityreducescarpandreworkreducecycletimebetterproduct/processdesignreducemajorexpansesAtoolsettomakethatchangepracticalEmpoweredpeoplehavethecontroltheyneedtoimprovethewaytheyworkAcommonlanguagefordiscussing,measuringandcomparingprocesscapabilitiesApowerfulcompetitiveadvantage……….SixSigmaIs….SixSigmaisdis8-6
-5-4-3-2-1X+1
+2+3+4+5+6NormalDistributionShifted1.5
ProcessCapability(Sigma)
PPM
Yield 2 308,537 69% 3 66,807 93.3% 4 6,210 99.3% 5 233 99.98% 6 3.4 99.9997%-6-5-4-39
SigmaMeasures-Process
CapabilityPerformanceLevelSIGMA%Yield#ofDefectsperMillion(DPM)A+699.999663.4A599.9767233B499.37906,210C393.366,807D269308,537F131691,462GoodWorld-ClassAverageGoodWorld-ClassAverageCostofQuality%<1%ofsales5-15%ofsales15-25%ofsales25-40%ofsalesC93.366,8073SigmaMeasures-ProcessCapa10EstablishorganizationalmeasurementsIdentifythesigmalevelEstablishCOPQmeasurementprocessIdentifythemajorareasforimprovement3to4sigmameans15%to25%costofsales:-Whichmeansifyoursalesis$100millions,youcansaveupto$25millionsbyimplementingSixSigmaprogram.Thesavingsiscontinuousbasisyearoveryear WhatistheBenefitsofSixSigma???Establishorganizationalmeasu11OutputMeasurement
Failurerate(internalandexternal)WarrantycostRepaircostperunitCycletimeperunitCycletimefornewproductdevelopment#ofengineeringchangesSupplierissuesWIPinventorycostFinishedgoodsinventoryDefectsproductarrivalatcustomer#ofserviceeventsOutputMeasurementFailurerat12LearnhowthecompanieslikeGeneralElectric,AlliedSignal,Motorola,LockheedMartin,AmericanExpress,J.P.Morgan&Chase,andothersuseSixSigmamethodologiestoreducedefects,improveprocesses,lowercost,higherprofit,increasecustomersatisfaction,anddriveimprovementtoanewlevels.
“TheSixSigmaQualityinitiativeshasloweredGE’scostsbydramaticallyreducingrework,simplifyingprocesses,andreducingdirectmaterialcosts.Designforsixsigmahasbeenakeytotheintroductionofnumeroushigh-qualitynewproductswithsignificantlyenhancedfeatures.”
JohnF.Welchjr.,GeneralelectricChairmanandChief ExecutiveOfficer,GEAnnualReport2000.LearnhowthecompanieslikeG13
bKnowledgeManagementKnowledgeManagementbBusinessResultsOpsReview,StrategyReviewLeadershipValues,Vision,MissionLearningandGrowthStrategyManagementBalancedScorecardProcessManagementCustomerManagementKnowledgeManagementQualityManagementQMSTheSixSigmaSystembKnowledgeBusinessResultsLea14CustomersRequirementsSatisfactionCustomersContinuousimprovementofthequalitymanagementsystemManagementresponsibilityResourcemanagementProductrealizationMeasurementanalysisandimprovementProductInputOutputSixSigmaProcessCustomerSatisfactionIncreaserevenueandprofitIncreasemarketshareDecreasecostQualityManagementSystemVSSixSigmaQualityManagementSystemSixSigmaSystemCustomersRequirementsSatisfact15CustomerSatisfactionBusinessObjectivesBusinessStrategyProcessImprovementBusinessGovernanceModelDeliveryReturnRateWarranty$ProblemResolutionNewprodPerformanceCust.SurveyMfgQualitySupplierPerformanceRevenueCostProfitMarketShareGrowthBusinessResultsAssessmentPDPProductLCMSupplierDevelopmentPlanningMarketingCustomerServiceManufacturingISO/QS9000ProcessSixSigmaProcessCustomerBusinessBusinessProces16QIASixSigmaImplementationModelUnderstandingofSixSigmaProcess(ExecutiveTraining)DefineBusinessStrategy(Values,Vision,Mission)AdoptSixSigmaProcessasLongTermBusinessStrategyforContinuousImprovement(QMSProcess)DevelopMeasurementsandGoals(BalancedScorecard)fortheBusinessGapAnalysis(Understandthestrength&weakness),AreasforImprovementDevelopBusinessGovernanceModeltoMonitorBusinessPerformanceDefineRoles&ResponsibilitiesforSixSigmaDeploymentDeveloptheRoadmapforSixSigmaProcessDeploymentIdentifyResourceRequirementsDevelopSixSigmaGovernanceProcessDevelopSixSigmaTrainingandCertificationprogram(SSL,MBB,BB,GB)IdentifyProjectsforImprovementsAssessBusinessPerformancerelatedtoSixSigmaProcess(QMSProcess)QIASixSigmaQIASixSigmaImplementationM17SixSigmaContinuousImprovementPrioritiesOverallfocuswill:DramaticallyreducetheCostofQualitybyimproving:processimprovementproductandserviceimprovementdesignimprovementsupplierimprovementtrainingDevelopandimplementasystematicapproachtodriveperformanceimprovementsthroughoutthebusinessMakeCustomerSatisfactionadrivingforceinallbusinessdecisionsImplementabalancedscorecardthatmeasuresthesuccessofoureffortsSixSigmaContinuousImproveme18Leader/ChampionMasterBlackBelt(MBB)BlackBelts(BB)GreenBelts(GB)ProjectTeamMembersSixSigma-Roles&ResponsibilitiesIsresponsibleforcoordinatingabusinessroadmaptoachieve6.Selectsprojects,executescontrol,andalleviatesroadblocksforthe6projectsinhisorherareaofresponsibility.Ismentor,trainer,andcoachofBlackBeltsandothersintheorganization.Bringsthebroadorganizationuptotherequired6competencylevel.Isaleaderofteamsimplementingthe6methodologyonprojects.Introducesthemethodologyandtoolstoteammembersandthebroaderorganization.Deliverssuccessfulsmall,focuseddepartmentalprojectsusingthesuccessstrategy.Participatesontheprojectteams.Supportsthegoalsoftheproject,typicallyinthecontextofhisorherexistingresponsibilities.Isexpectedtocontinuetoutilizelearned6methodologyandtoolsaspartofhisorhernormaljob.Leader/MasterBlackBeltBlack19QIAcanhelpyoutogrowyourbusinessbyintroducingyouaworldclassbusinessstrategybycombiningyourexistingQualityManagementSystem(QMS)withSixSigmacontinuousimprovementprocess.Thisstrategyhelpsyoutoprovidebestqualityproductsandservicestoyourcustomer,whichwillhelpyoutosignificantlyimprovecustomersatisfaction,businessgrowth,lowercostandhigherprofits.WHATQIACANDOFORYOU!!!QIAcanhelpyoutogrowyour20QIASixSigmaTraining&CertificationProgramAnExecutiveOverviewofSixSigmaProgramSixSigmaLeader/ChampionMasterBlackBeltBlackBeltGreenBeltQIASixSigmaTraining&Certi21WhatisNext?SixSigmaexecutivetrainingAdoptSixSigmaprocessaslongtermbusinessstrategyBusinessgapanalysis(identifystrengthsandweaknesses)BenchmarkDevelopbusinessstrategyandgovernancemodelDevelopmeasurementprocessesDeveloproadmapforSixSigmadeploymentIdentifyresourcerequirementsIdentifytrainingroadmapforSixSigmaDevelopsixsigmatrainingprogramIdentifyimprovementprojectsAssessbusinesssuccess…………….WhatisNext?SixSigmaexecuti22QIAQIA23ImproveQualityReduceCostProductivityImprovesCaptureMarketProvidesjobsandmorejobsModelsoftherelationshipsaffectingqualityandbusinessperformanceDeming’sModel:lessrework,lessscrapIncreasecycletime,increasethroughputbetterquality,lowerpriceOverallsocietybenefitsImproveReduceProductivityCapt24COSTOFPOORQUALITY(COPQ)ExternalFailureCostsWarrantyAdjustmentsRepairsCustomerServiceReturnedGoodsReturnedRepairedGoodsProductRecallsProductLiabilitySuitsOpportunityCosts……………InternalFailureCostsScrapReworkRE-INSPECTIONofReworkDowngradingBecauseofDefectsLossesCausedbyVendorScrapDowntimeCausedbyDefectsFailureAnalysis……………..AppraisalCostsReceivingInspectionIn-processInspectionLaboratoryInspectionOutsideLaboratoryEndorsementsSetupforTestingMaintenanceofTestEquipmentQualityAuditsCalibrationofQualityEquipment………..PreventionCostsQualityEngineeringDesignandDevelopmentofQualityEquipmentDesignVerificationandReviewtoEvaluatetheQualityofNewProductsQualityTrainingQualityImprovementProjectsQualityDataGatheringAnalysisandReportingOtherProcessControlActivitiesUsedtoPreventDefects………………COSTOFPOORQUALITY(COPQ)Ext25LostOpportunityScrapReworkInspectionWarrantyRejectsLostsalesLatedeliveryEngineeringchangeordersLongcycletimesExpeditingcostsExcessinventoryTheCostofPoorQuality(COPQ)“Iceberg”TraditionalQualityCostsAdditionalCostsofPoorQuality(intangible)(tangible)4-8%25-35%(EasilyIdentified)(Difficultorimpossibletomeasure)LostCustomerLoyaltyMoreSetupsLostOpportunityScrapReworkIns26SixSigmaPhilosophy
WeareinbusinesstomakemoneyWemakemoneybysatisfyingneedsWeareabletosatisfyneedsbydoingEveryneed/dopairisaninteractionTheaimofcustomerfocusisonimprovingneed/dointeractionRepetitionofthesameactionconstituteaprocessImproveourbusinessmeansimprovementofourprocessesCustomersneedproducts/serviceson-time,withzerodefects,withlowercostAsprocesscapabilityimproves,theproductqualityincreasesAsqualityincreases,costsandcycle-timegodown…………...Thereductionofdefects,cycle-time,costleadstoimprovedcustomersatisfactionAscustomersatisfactionimproves,thelikelihoodofdoingbusinessincreasesAsbusinessincreases,we(asindividualandsociety)growandprosperSixSigmaPhilosophyWearein27WhatisSixSigma?Sigmaisastatisticalunitofmeasurewhichreflectsprocesscapability.Thesigmascaleofmeasureisperfectlycorrelatedtosuchcharacteristicsasdefects-per-unit,partspermilliondefective(PPM),andaprobabilityofafailure/error.Thesigmavalueindicateshowoftendefectsarelikelytooccur.Thehigherthesigmavalue,thelesslikelyaprocesswillproducedefects.Assigmaincreases,costsgodown,cycletimegoesdown,andcustomersatisfactiongoesup.WhatisSixSigma?Sigmaisas28Whatisthemeaningofquality???99%Good(3.8Sigma)
99.9997%Good(6Sigma)20,000lostarticlesofmailperhour SevenarticlesofmaillostperhourUnsafedrinkingwaterforalmost Oneunsafeminuteeverysevenmonths15minuteseachday5,000incorrectsurgicaloperations 1.7incorrectoperationsperweekperweek2shortorlonglandingsatmostmajor oneshortorlonglandingeveryfiveairportseachday yearsateachairport200,000wrongdrugprescriptionsperyear 68wrongdrugprescriptionsperyearNoelectricityforsevenhourseachmonth Onehourwithoutelectricityevery 34yearsWhatisthemeaningofquality29SixSigmaIs….SixSigmaisdisciplinedmethodologyforcontinuousimprovementforReducingprocessvariabilityandkeepingitreducedachievebenefitsfromimprovementsin:betterproduct/processqualityreducescarpandreworkreducecycletimebetterproduct/processdesignreducemajorexpansesAtoolsettomakethatchangepracticalEmpoweredpeoplehavethecontroltheyneedtoimprovethewaytheyworkAcommonlanguagefordiscussing,measuringandcomparingprocesscapabilitiesApowerfulcompetitiveadvantage……….SixSigmaIs….SixSigmaisdis30-6
-5-4-3-2-1X+1
+2+3+4+5+6NormalDistributionShifted1.5
ProcessCapability(Sigma)
PPM
Yield 2 308,537 69% 3 66,807 93.3% 4 6,210 99.3% 5 233 99.98% 6 3.4 99.9997%-6-5-4-331
SigmaMeasures-Process
CapabilityPerformanceLevelSIGMA%Yield#ofDefectsperMillion(DPM)A+699.999663.4A599.9767233B499.37906,210C393.366,807D269308,537F131691,462GoodWorld-ClassAverageGoodWorld-ClassAverageCostofQuality%<1%ofsales5-15%ofsales15-25%ofsales25-40%ofsalesC93.366,8073SigmaMeasures-ProcessCapa32EstablishorganizationalmeasurementsIdentifythesigmalevelEstablishCOPQmeasurementprocessIdentifythemajorareasforimprovement3to4sigmameans15%to25%costofsales:-Whichmeansifyoursalesis$100millions,youcansaveupto$25millionsbyimplementingSixSigmaprogram.Thesavingsiscontinuousbasisyearoveryear WhatistheBenefitsofSixSigma???Establishorganizationalmeasu33OutputMeasurement
Failurerate(internalandexternal)WarrantycostRepaircostperunitCycletimeperunitCycletimefornewproductdevelopment#ofengineeringchangesSupplierissuesWIPinventorycostFinishedgoodsinventoryDefectsproductarrivalatcustomer#ofserviceeventsOutputMeasurementFailurerat34LearnhowthecompanieslikeGeneralElectric,AlliedSignal,Motorola,LockheedMartin,AmericanExpress,J.P.Morgan&Chase,andothersuseSixSigmamethodologiestoreducedefects,improveprocesses,lowercost,higherprofit,increasecustomersatisfaction,anddriveimprovementtoanewlevels.
“TheSixSigmaQualityinitiativeshasloweredGE’scostsbydramaticallyreducingrework,simplifyingprocesses,andreducingdirectmaterialcosts.Designforsixsigmahasbeenakeytotheintroductionofnumeroushigh-qualitynewproductswithsignificantlyenhancedfeatures.”
JohnF.Welchjr.,GeneralelectricChairmanandChief ExecutiveOfficer,GEAnnualReport2000.LearnhowthecompanieslikeG35
bKnowledgeManagementKnowledgeManagementbBusinessResultsOpsReview,StrategyReviewLeadershipValues,Vision,MissionLearningandGrowthStrategyManagementBalancedScorecardProcessManagementCustomerManagementKnowledgeManagementQualityManagementQMSTheSixSigmaSystembKnowledgeBusinessResultsLea36CustomersRequirementsSatisfactionCustomersContinuousimprovementofthequalitymanagementsystemManagementresponsibilityResourcemanagementProductrealizationMeasurementanalysisandimprovementProductInputOutputSixSigmaProcessCustomerSatisfactionIncreaserevenueandprofitIncreasemarketshareDecreasecostQualityManagementSystemVSSixSigmaQualityManagementSystemSixSigmaSystemCustomersRequirementsSatisfact37CustomerSatisfactionBusinessObjectivesBusinessStrategyProcessImprovementBusinessGovernanceModelDeliveryReturnRateWarranty$ProblemResolutionNewprodPerformanceCust.SurveyMfgQualitySupplierPerformanceRevenueCostProfitMarketShareGrowthBusinessResultsAssessmentPDPProductLCMSupplierDevelopmentPlanningMarketingCustomerServiceManufacturingISO/QS9000ProcessSixSigmaProcessCustomerBusinessBusinessProces38QIASixSigmaImplementationModelUnderstandingofSixSigmaProcess(ExecutiveTraining)DefineBusinessStrategy(Values,Vision,Mission)AdoptSixSigmaProcessasLongTermBusinessStrategyforContinuousImprovement(QMSProcess)DevelopMeasurementsandGoals(BalancedScorecard)fortheBusinessGapAnalysis(Understandthestrength&weakness),AreasforImprovementDevelopBusinessGovernanceModeltoMonitorBusinessPerformanceDefineRoles&ResponsibilitiesforSixSigmaDeploymentDeveloptheRoadmapforSixSigmaProcessDeploymentIdentifyResourceRequirementsDevelopSixSigmaGovernanceProcessDevelopSixSigmaTrainingandCertificationprogram(SSL,MBB,BB,GB)IdentifyProjectsforImprovementsAssessBusinessPerformancerelatedtoSixSigmaProcess(QMSProcess)QIASixSigmaQIASixSigmaImplementationM39SixSigmaContinuousImprovementPrioritiesOverallfocuswill:DramaticallyreducetheCostofQualitybyimproving:processimprovementproductandserviceimprovementdesignimprovementsupplierimprovementtrainingDevelopandimplementasystematicapproachtodriveperformanceimprovementsthroughoutthebusinessMakeCustomerSatisfactionadrivingforceinallbusinessdecis
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