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in turnaround time of railcar leasing repairs ? Plastics business added 300 million pounds of new capacity – equivalent to “one free plant” page 23 Lean 6 sigam introduction Six Sigma History ?“ Sigma” (? ) is a letter in the Greek alphabet ? Describes variability ? Sigma Quality Level ? Indicator of how often defects are likely to occur ? Six Sigma Quality Level is said to equate to PPM defective page 24 Lean 6 sigam introduction What Is Six Sigma? ? The term “Sigma” is a Greek letter (s) used to describe variability and is an indicator of how likely errors are to occur 6? 3? 2? 1? x +1? +2? +3? +6? LSL Normal Distribution Centered USL S p e c L im it P e r c e n t D e fe c t . P P M+ / 1 s ig ma 6 8 . 2 7 3 1 7 , 3 0 0+ / 2 s ig ma 9 5 . 4 5 4 5 , 5 0 0+ / 3 s ig ma 9 9 . 7 3 2 , 7 0 0+ / 4 s ig ma 9 9 . 9 9 3 7 63+ / 5 s ig ma 9 9 . 9 9 9 9 4 3 0 . 5 7+ / 6 s ig ma 9 9 . 9 9 9 9 9 9 8 0 . 0 0 26? 3? 2? 1? x +1? +2? +3? +6? Centered Normal Distribution +/6 Sigma Limits Effects of Standard Deviation Shift S p e c L im it P e r c e n t D e fe c t . P P M+ / 1 s ig ma 3 0 . 2 3 6 9 7 , 7 0 0+ / 2 s ig ma 6 9 . 1 3 3 0 8 , 7 0 0+ / 3 s ig ma 9 3 . 3 2 6 6 , 8 1 0+ / 4 s ig ma 9 9 . 3 7 9 0 6 , 2 1 0+ / 5 s ig ma 9 9 . 9 7 6 7 0 233+ / 6 s ig ma 9 9 . 9 9 9 6 6 0 0 3 . 4LSL Normal Distribution Shifted USL page 25 Lean 6 sigam introduction Costs Are Always Kept in Mind ? There is an optimum quality level beyond which the costs of quality improvement exceed the expected cost savings from a reduced number of defects Cost Sigma Quality Level Optimum Impact of Quality Level on Cost page 26 Lean 6 sigam introduction Frameworks of Six Sigma ? Six Sigma Improvements – Aligning processes to the customer and optimizing process performance by solving problems. ? Design for Six Sigma – Develop new processes/products that are capable. ? Business Process Management ? Maintain performance improvement, while ? Highlighting new opportunities for making further improvements page 27 Lean 6 sigam introduction Rolled Throughput Yield (RTY) is the probability that a product will pass through the entire process without rework and without any defects. RTY= Y1 x Y2 . . . Yn (n = number of process steps) I m pa c t of C om pl e x i t y on R ol l e d Th r ou gh pu t Y i e l d0%10%20%30%40%50%60%70%80%90%100%0 1 , 0 0 0 2 , 0 0 0 3 , 0 0 0 4 , 0 0 0 5 , 0 0 0 6 , 0 0 0 7 , 0 0 0 8 , 0 0 0 9 , 0 0 0 1 0 , 0 0 0N um be r of P a r t s / P r oc e s s S t e psRolled Throughput Yield 4? 5? 6? Why Six Sigma Is the Goal For plex products and systems, 6? is necessary to produce or perform defectfree more than 90% of the time page 28 Lean 6 sigam introduction How Complex Are Your Products? (% Shippable without Rework) of P a r t s 177。 ?) Source: Six Sigma Research Institute, Motorola University, Motorola, Inc. Lean Reduces NonValued Add Steps page 14 Lean 6 sigam introduction The Lean Six Sigma Secret The principal Lean Six Sigma insight is that: ? Material spends 95% of its time waiting, creating overhead cost ? 80% of the wait time is due to Time Traps caused by 20% of the activities ? They can be found using Time Trap analysis. ? Time Traps can be eliminated using Lean and Six Sigma tools. ? Lead time and WIP+ Finished Goods inventory can be reduced 5080% ? Overhead+Quality Cost can be reduced by 20% These insights hold true for all processes Raw Materials Production Process 8 Week Total Cycle Time Product Order Before Improvements 40 Days 10 Days Cycle Time Reduction 75% Reduction After page 15 Lean 6 sigam introduction Project Selection Reduces Number of Projects and Provides Focus Effort Economic Value High Low Med Hig h Low Med Before Project Selection Process Effort Economic Value High Low Med Hig h Low Med After Project Selection Process Lean Six Sigma Kaizen Projects ? Best for low plexity projects where known solution(s) can be applied ? High bias for action and implementation ? 5 day High Speed “Mini” DMAIC Lean Six Sigma Projects ? Best for plex projects where root cause of problem is not understood ? Thorough measurement and analysis prior to impl