Javier Garcia - Verdugo Sanchez - Six Sigma Training - W1 Six Sigma Introduction

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  • Introduction to Six Sigma gm

    DefineMeasure

    lAnalyseImproveImproveControl

    Week 1

    Knorr-Bremse Group

    When you never

    were forced to manufacture a product outside the process capabilityp y

    discussed with a customer about the measurement method

    sorted parts to fulfill the specification limits

    grumbled about too many failures reworks and checksgrumbled about too many failures, reworks and checks

    discussed about late payments, wrong invoices, delayed hi t t l t it d dshipments, too less or too many items produced

    identified a cost reduction opportunity which you could not realized

    . . . than probably, you have Six Sigma already implemented

    Knorr-Bremse Group 02 BB W1 Six Sigma Intro 08, D. Szemkus/H. Winkler Page 2/26

    implemented

  • Six Sigma is ... ...a structured methodology for

    consistent and confident application of selected statistical methodsconsistent and confident application of selected statistical methods

    in teams lead by specialists trained for it

    to almost eliminate process variation and failures

    by processing well-chosen projects within a defined time frame

    in accordance with the company strategy p y gy

    and deliver precisely defined and controlled financial contributions.

    The goals of Six Sigma are:

    To fulfil customer needs completely and economically

    Breakthrough in process improvement and profitability

    Knorr-Bremse Group 02 BB W1 Six Sigma Intro 08, D. Szemkus/H. Winkler Page 3/26

    Breakthrough in process improvement and profitability

    Six Sigma as a new Philosophy

    SIX SIGMA

    CustomerTeam work

    TQMISO / QS 9000

    FastnessSafety

    QValue Based Selling

    KVPyPerformance

    EmployeesLean / Kaizen / JIT

    EFQMInnovation R & D Programs

    Company values and programs are unified in the Six Sigma Philosophy

    Th h th l ill b f lKnorr-Bremse Group 02 BB W1 Six Sigma Intro 08, D. Szemkus/H. Winkler Page 4/26

    The way how the puzzle will be successful

  • Make Existing with Six Sigma Successful Zero defects ...Value up ...top+

    The Six Sigma methodology supports the existing programs and values This gives all the and values. This gives all the quality initiatives the further framework to be successful

    CustomerTeam workTeam workFastnessSafetyaf tyPerformanceEmployees

    Knorr-Bremse Group 02 BB W1 Six Sigma Intro 08, D. Szemkus/H. Winkler Page 5/26

    Innovation

    Six Sigma & the DMAIC Cycle

    ControlMaintain DefineMaintain

    ImprovementsSPC

    Control Plans

    Project charter (SMART)

    Business Score CardQFD VOC

    D Documentation QFD + VOC

    Strategic GoalsProject strategy

    C M

    MeasureB li A l iImprove

    AIBaseline Analysis

    Process MapC + E Matrix

    M t S tAnalyze

    ImproveAdjustment to the

    OptimumFMEA Measurement System

    Process CapabilityDefinition of critical

    InputsFMEA

    S

    FMEAStatistical Tests

    SimulationTolerancing Statistical Tests

    Multi-Vari StudiesRegression

    Tolerancing

    Knorr-Bremse Group 02 BB W1 Six Sigma Intro 08, D. Szemkus/H. Winkler Page 6/26

  • Sigma; a Measure of Variability

    20

    Standard Deviation

    M

    15

    Meanen

    cy Point of Inflection Point of Inflection10

    Freq

    u

    5

    30272421180

    3027242118

    Measurement values of a process or product:

    Knorr-Bremse Group 02 BB W1 Six Sigma Intro 08, D. Szemkus/H. Winkler Page 7/26

    e.g. delivery time, process time, length, pressure, speed, acceleration, volt, etc.

    Six Sigma Means Customer Orientation Internal focus30% Cost of poor quality

    3 Process3

    Low delivery quality, high inventoriesRight First Time < 90%

    3

    DefectsDefects

    6 Process UpperSpecification

    LowerSpecification

    6 Customer oriented 7% Cost of poor quality

    7% Cost of poor quality High delivery quality, low inventories Right First Time 99.9%g t st e 99 9% Integration of customers & suppliers Efficient processes and flows

    Knorr-Bremse Group 02 BB W1 Six Sigma Intro 08, D. Szemkus/H. Winkler Page 8/26

    LSL USL

  • Three Sigma ProcessThree Standard Deviations between Mean

    and customer specification3

    D f tD f t

    DefectsDefects

    USLLSL

    (Upper Specification Limit)(Lower Specification Limit)

    The capability of a process can be characterized based on the metric Mean

    Knorr-Bremse Group 02 BB W1 Six Sigma Intro 08, D. Szemkus/H. Winkler Page 9/26

    and the amount of the Variation (Standard Deviation).

    Six Sigma ProcessSix Standard Deviations between Mean und

    customer specification6

    USLLSL

    (Upper Specification Limit)(Lower Specification Limit)

    The capability of a process can be characterized based on the metric Mean

    Knorr-Bremse Group 02 BB W1 Six Sigma Intro 08, D. Szemkus/H. Winkler Page 10/26

    and the amount of the Variation (Standard Deviation).

  • Example: Tube Manufacturing Customer requirement: 994 1006 mm

    LSL USL

    994 - 1006 mm

    What is the process capability measured in

    Lnge in mm1006100410021000998996994

    capability measured, in terms of sigma?

    Could you name reasonsCould you name reasons for the difference?

    1006100410021000998996994

    Knorr-Bremse Group 02 BB W1 Six Sigma Intro 08, D. Szemkus/H. Winkler Page 11/26

    Lnge in mmLength in mm

    Sigma Score Comparison The number of the Standard deviations between the average

    value and the customer specification

    6

    5

    Best in the class

    5

    4

    Sig

    ma

    3

    2

    The most companiesS

    Si D f t /Milli D f t f

    1

    Sigma measure Defects/Million Defect freeSix Sigma 3.4 99.9997%5 Sigma 230 99 977%5 Sigma 230 99.977%4 Sigma 6,210 99.4%3 Sigma 66 810 93%

    Knorr-Bremse Group 02 BB W1 Six Sigma Intro 08, D. Szemkus/H. Winkler Page 12/26

    3 Sigma 66,810 93%

  • Benchmark Metric Sigma The relation between Quality and Cost

    30%

    25% 2

    Cost of Quality

    25%

    20%

    15%

    2

    3Continuous improvement

    10%

    5%4

    Continuous improvement means cost reduction

    5

    6

    Right First Time70 90 95 99 99.9 99.9997 %

    Knorr-Bremse Group 02 BB W1 Six Sigma Intro 08, D. Szemkus/H. Winkler Page 13/26

    The Cost Advantage of Optimized Processes

    Conventional cost of poor quality and losses are easy to recognize but this is only the tip of the icebergrecognize, but this is only the tip of the iceberg

    ReworkWarrantyInspection

    Reject/ Compensation DiscountScrap

    Additional Lost Sales

    (Tangible) Compensation Discount

    Technical ChangesLong Inventory Turn Times

    Fixed Capital

    Lost Sales

    Lost Opportunities

    (Easy to overlook)

    Cost forInadequate use

    Late Delivery

    Inadequate MaterialO d i / Pl iImage Loss

    Lost OpportunitiesAdditionalPerformance Increase

    Cost forPrioritization

    of Company Assets Ordering / Planningg

    Additional hidden cost due to poor quality

    Knorr-Bremse Group 02 BB W1 Six Sigma Intro 08, D. Szemkus/H. Winkler Page 14/26

    Additional hidden cost due to poor quality

  • The Success of Six Sigma

    The Six Sigma Elements

    r nt n

    Sale

    s

    usto

    mer

    evel

    opm

    en

    Logi

    stic

    rodu

    ctio

    Qua

    lity

    Fina

    nce

    Supp

    lier

    C De

    L

    Pr

    F S

    LEANINGDESIGNING MASTERING

    Create valuableProducts & Performance

    for the Customer

    Efficient Processes without

    Waiting Time

    Eliminate Defects& reduce Variability for the Customer Waiting Time

    Price On time SIGMA / DPMOCapableValue Lean

    Optimized Products and Solutions

    CapableValue Lean

    Knorr-Bremse Group 02 BB W1 Six Sigma Intro 08, D. Szemkus/H. Winkler Page 15/26

    Optimized Products and Solutions

    Business Processes vs. Organization

    FinanceMfg LogisticsSalesMaterials

    MgmtCustomerService

    Strategy, Business Plan, ObjectivesStrategy, Business Plan, Objectives

    s s FinanceMfg LogisticsSalesMaterials

    MgmtCustomerService

    Strategy, Business Plan, ObjectivesStrategy, Business Plan, ObjectivesStrategy, Business Plan, ObjectivesStrategy, Business Plan, Objectives

    s s s s FinanceMfg LogisticsSales MgmtService

    Mea

    sure

    sM

    easu

    res

    me,

    m

    e,

    chas

    ech

    ase

    sure

    s su

    res

    iver

    y,

    iver

    y,

    stst

    Application (Product) Development

    fact

    ion

    FinanceMfg LogisticsSales MgmtService

    Mea

    sure

    sM

    easu

    res

    me,

    m

    e,

    chas

    ech

    ase

    Mea

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    s iv

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    ery,

    stst

    Application (Product) Development

    fact

    ion

    r Val

    ue M

    r Val

    ue M

    st in

    Tim

    st in

    Tim

    e of

    Pur

    ce

    of P

    urc

    ier,

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    r, M

    eas

    tive,

    Del

    tive,

    Del

    otal

    Cos

    otal

    Cos Order to Delivery

    Produce Products mer

    Sat

    is

    r Val

    ue M

    r Val

    ue M

    st in

    Tim

    st in

    Tim

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    of P

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    Produce Products mer

    Sat

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    usto

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    mer Ju

    sJu

    sSh

    are

    Shar

    e

    Supp

    lSu

    ppl

    Def

    ect

    Def

    ect ToTo Produce Products

    Credit and Collections Cust

    om

    usto

    mer

    usto

    mer Ju

    sJu

    sSh

    are

    Shar

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    usto

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    CC

    Fi i l P f MFi i l P f M

    CCCC

    Fi i l P f MFi i l P f MFi i l P f MFi i l P f MFinancial Success and

    Financial Performance Measures Financial Performance Measures Net Income, Productivity, Cash FlowNet Income, Productivity, Cash Flow

    Financial Success

    Financial Performance Measures Financial Performance Measures Net Income, Productivity, Cash FlowNet Income, Productivity, Cash Flow

    Financial Performance Measures Financial Performance Measures Net Income, Productivity, Cash FlowNet Income, Productivity, Cash Flow

    Financial Success

    Customer Satisfaction are strongly linked. Experience

    shows that there is friction in

    C t i t d th h B i P M t

    Financial SuccessFinancial Success shows that there is friction in the daily business

    Knorr-Bremse Group 02 BB W1 Six Sigma Intro 08, D. Szemkus/H. Winkler Page 16/26

    Customer oriented through Business Process Management

  • A Detailed ViewSome of the elements are not yet fully developed

    FinancesCustomer

    EmployeesVisionControl Processes

    Metrics

    Strategy

    Analysis

    Action

    The DMAIC cycle includes all elements of the chain

    Knorr-Bremse Group 02 BB W1 Six Sigma Intro 08, D. Szemkus/H. Winkler Page 17/26

    The Reason for the Success of Six Sigma

    Measurable

    SuccessFinancesCustomer

    Employees

    ControlVisionControl Processes

    Improve DefineMetrics

    Strategy

    Analysis

    Action

    MeasureAnalysis

    Success through an integrated approach Larry Bossidy

    Knorr-Bremse Group 02 BB W1 Six Sigma Intro 08, D. Szemkus/H. Winkler Page 18/26

    Success through an integrated approach Larry Bossidy

  • Example Automotive

    Efforts to increase the capability of

    processes are not new

    The SPC stage

    The FMEA stage

    The cpk > 1.33 stage

    Actual studies show:

    60 % f l ll th 1 2 60 % of cpk values are smaller than 1.2

    Most of the data sets are not normally distributed

    Knorr-Bremse Group 02 BB W1 Six Sigma Intro 08, D. Szemkus/H. Winkler Page 19/26

    y

    Improvement Strategies Innovation + CIP

    ... Steps back vs. Benchmark

    Innovation Benchmark

    CIP

    Do nothing

    Obviously improvement, but

    Structured proceeding and use of Six Sigma tools makes CIP more successful. The innovation steps are getting bigger and time intervals

    tti ll t th ti

    Knorr-Bremse Group 02 BB W1 Six Sigma Intro 08, D. Szemkus/H. Winkler Page 20/26

    getting smaller at the same time.

  • Cost Reduction Programs

    Development of business sectorslit

    y Protected! Assailable!

    Prof

    itabi

    l

    Monopolyposition I

    ce a

    nd P position In

    competition

    New player Rise in prices

    Overcapacity Differentiation

    Pric

    Genetic engineering

    Price war Consolidation

    "Shakeout"PCs

    engineering

    Maglevtrain

    Time - years0 5 10

    PCs

    Knorr-Bremse Group 02 BB W1 Six Sigma Intro 08, D. Szemkus/H. Winkler Page 21/26

    y

    Cost Reduction Programs

    Selling price1. At the beginning of the live cycle

    Manufacturing cost Profit

    Market price2 X Years later

    Manufacturing cost Profit

    Market price2. .... X Years later

    Manufacturing cost Profit

    Cost reductionL TPM K i Eff ti

    Market price

    Lean, TPM, KaizenSix Sigma

    CIP

    EffectiveFast

    Big StepsManufacturing cost Profit

    Big StepsLasting

    Knorr-Bremse Group 02 BB W1 Six Sigma Intro 08, D. Szemkus/H. Winkler Page 22/26

  • Cost Reduction Programs Restructuring Approach

    Product & Programarrangement

    CostCost

    Adjustment/Simplification New businessarrangement

    Product arrangementDesign to cost

    Design to k t

    pProduct-portfolio

    Country specific

    dj t t

    New products

    Product arrangement

    Operative

    marketComplexity reduction

    SalesProcess optimization Sales increase

    adjustmentsNew

    applications

    Sales

    OperativeProgramsBurden

    reduction

    in ancestral areas

    Restructured cost base

    Baseline GoalCost base settlement is necessary for business growth

    Knorr-Bremse Group 02 BB W1 Six Sigma Intro 08, D. Szemkus/H. Winkler Page 23/26

    Cost base settlement is necessary for business growth

    Cost Reduction Programs

    The lever for cost reduction should be used always integrated

    100%

    Sales Design to costVariantsComplexity

    PerformanceEfficiencyProduct cycle

    Manufacturing

    Materialcost Other factor

    costS l C it l

    R & D

    PerformancedifferencesService lifePrecision

    y

    EfficiencyLogistic cycleStock

    Salary, Capital

    Admin Factor costProcess designProduct design

    (Total cost in %)New SituationActual Situation

    Knorr-Bremse Group 02 BB W1 Six Sigma Intro 08, D. Szemkus/H. Winkler Page 24/26

    (Total cost in %)

  • Cost Reduction Programs Where can you use Six Sigma for cost reduction?

    Customer orientedvi

    ty

    hain

    hain

    on kets

    B i

    oduc

    tiv

    pply

    Ch

    enue

    C

    nnov

    atio

    w m

    ark Business

    improvements

    Pro

    Sup

    Rev In New

    Culture change

    Improvements in all areas will be achieved fast, lasting and effective through a Six Sigma structure

    Knorr-Bremse Group 02 BB W1 Six Sigma Intro 08, D. Szemkus/H. Winkler Page 25/26

    through a Six Sigma structure.

    Successful Positioning

    esomer

    pmen

    t

    stic

    ctio

    n

    ity nce

    lier

    Sale

    Cus

    to

    Dev

    elop

    Logi

    s

    Prod

    uc

    Qua

    l

    Fina

    n

    supp

    Technical Competence

    Methodical Competence

    Successful programs and j t d d t

    Social Competence

    projects need good team work and good coaching

    Knorr-Bremse Group 02 BB W1 Six Sigma Intro 08, D. Szemkus/H. Winkler Page 26/26

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