FINANCIAL ESSAY
Joss_Smitx01
SisSigma1.pptSIX SIGMA PHILOSOPHY
Dr. JAM
By knowing the resources utilization of your process, its variations can be controlled.
A process is a combination of tasks or functions directed to achieve a final result. This result can be either a service or a product.
Each task uses resources in an action that its repetition will be affected by internal and external factors. Therefore, creating variations versus its expected result.
Meeting I
Dr. JAM
Meeting I
PROCESS VARIATION
Variation is a measure of dispersion, which means how far or distance are the actual results from the expected one, once influenced by the internal or external factors.
It can be measured using some tools like range, standard deviation, variance, mean absolute deviation, coefficient of variation, process capability ratio and others.
EXPECTED RESULT
Variations
Dr. JAM
Meeting I
VARIATION TOOLS
RANGE: MAXIMUN VALUE – MINIMUM VALUE
DATA
102
152
146
101
130
164
152
163
Dr. JAM
Meeting I
VARIATION TOOLS
DATA
10
15
21
34
19
23
STANDARD DEVIATION: AVERAGE DEVIATION USING THE SQUARES OF THE DIFFERENCES
SIGMA = σ = Σ (Xi – μ)2
√ N
VARIANCE : THE SQUARE OF THE STANDARD DEVIATION = σ2
-3 σ
3 σ
99.73%
NORMAL CURVE
Dr. JAM
Meeting I
VARIATION TOOLS
DATA
13
15
16
24
23
31
35
MEAN ABSOLUTE DEVIATION: AVERAGE DEVIATION USING ABSOLUTE DIFFERENCES
MAD = Σ |Xi – μ|
N
Dr. JAM
Meeting I
VARIATION TOOLS
VARIATION COEFFICIENT: RELATIONSHIP BETWEEN DEVIATION AND AVERAGE = σ/μ
POP. A
42
35
46
44
39
41
POP. B
101
115
109
111
107
108
110
Dr. JAM
Meeting I
VARIATION TOOLS
PROCESS CAPABILITY RATIO : RELATIONSHIP BETWEEN EXPECTED RANGE AND ACTUAL RANGE
DATA
SPECIFICATION: 50 +/-1.6
ACTUAL READINGS: 52, 49, 51, 50, 49, 48, 52, 48
CPK = |USL – LSL|
6σ
IF CPK < 1 PROCESS DOES NOT COMPLY WITH SPECIFICATIONS
IF CPK ≥ 1 PROCESS COMPLIES WITH SPECIFICATIONS
-3 σ
3 σ
LSL
USL
NOTE: IF PROCESS MEAN IS NOT EQUAL TO SPECIFICATION THEN
Cpk = |LSL – μ| OR |USL – μ| THE LOWEST
3σ 3σ
Dr. JAM
Meeting I
SIX SIGMA : REDUCE VARIATION IN THE PROCESS
-3 σ
3 σ
99.73%
NORMAL CURVE
CPK = 6σ / 6σ =1
LSL
USL
DPM = 1,000,000 X (1-99.73%)
= 2700
3σ
-3 σ
3 σ
93.32%
NORMAL CURVE
CPK =1.5 σ / 3σ = .5
LSL
USL
DPM = 1,000,000 X (1-93.32%)
= 66810
1.5σ
-6 σ
6 σ
99.99966%
NORMAL CURVE
CPK = 4.5σ / 3 σ =1.5
LSL
USL
DPM = 1,000,000 X (1-99.99966%)
= 3.4
4.5σ
Dr. JAM
Meeting I
SIX SIGMA APPROACH
MANUFACTURING PROCESS ARE CONSTANTLY MEASURED
BY THE USED OF THE KEY PRODUCTION OUTPUT VARIABLES
(KPOV)
EACH KPOV NEEDS TO BE MONITORED TO PERFORME UNDER THE EXPECTED RESULTS OR CLIENT REQUIREMENTS OR SPECIFICATIONS.
SIX SIGMA IS A CONTINUOUS IMPROVEMENT APPROACH THAT BY DETERMINE THE BASELINE OF THE PROCESS, AN IMPROVEMENT CAN BE DEVELOPED AND MEASURED DIRECTED TO REDUCE ITS KPOV VARIABILITY.
Dr. JAM
Meeting I
SIX SIGMA APPROACH
D
M
A
I
C
D
E
F
I
N
E
M
E
A
S
U
R
E
A
N
A
L
Y
S
I
S
I
M
P
R
O
V
E
C
O
N
T
R
O
L
