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TheSix SigmaHandbookA Complete Guide for Green Belts,Black Belts, and Managers at All LevelsThomas PyzdekPaul A. KellerThird EditionNew York Chicago San FranciscoLisbon London Madrid Mexico CityMilan New Delhi San JuanSeoul Singapore Sydney Toronto

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ContentsPreface.xiPart I Six Sigma Implementation and Management1Building the Responsive Six Sigma Organization . . . . . . . . . . . . . . .What Is Six Sigma? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Why Six Sigma? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .The Six Sigma Philosophy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .The Change Imperative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Implementing Six Sigma . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Timetable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Infrastructure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Integrating Six Sigma and Related Initiatives . . . . . . . . . . . . . .Deployment to the Supply Chain . . . . . . . . . . . . . . . . . . . . . . . .Communications and Awareness . . . . . . . . . . . . . . . . . . . . . . . . .3345111314163234362Recognizing Opportunity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Becoming a Customer and Market-Driven Enterprise . . . . . . . . . . . . .Elements of the Transformed Organization . . . . . . . . . . . . . . . .Strategies for Communicating withCustomers and Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . .Survey Development Case Study . . . . . . . . . . . . . . . . . . . . . . . .Calculating the Value of Customer Retention . . . . . . . . . . . . . .Customer Expectations, Priorities, Needs, and “Voice” . . . . . . . . . . . .Quality Function Deployment . . . . . . . . . . . . . . . . . . . . . . . . . . .The Six Sigma Process Enterprise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .The Source of Conflict . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .A Resolution to the Conflict . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Six Sigma and the Process Enterprise . . . . . . . . . . . . . . . . . . . . .Linking Six Sigma Projects to Strategies . . . . . . . . . . . . . . . . . . . . . . . . .The Strategy Deployment Matrix . . . . . . . . . . . . . . . . . . . . . . . . .Deploying Differentiators to Operations . . . . . . . . . . . . . . . . . .Deploying Operations Plans to Projects . . . . . . . . . . . . . . . . . . .Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Linking Customer Demands to Budgets . . . . . . . . . . . . . . . . . . .Structured Decision-Making . . . . . . . . . . . . . . . . . . . . . . . . . . . . .43444648525860616567677071717475767777iii

ivContents34Data-Driven Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Attributes of Good Metrics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .The Balanced Scorecard . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Measuring Causes and Effects . . . . . . . . . . . . . . . . . . . . . . . . . . .Customer Perspective . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Internal Process Perspective . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Innovation and Learning Perspective . . . . . . . . . . . . . . . . . . . . .Financial Perspective . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Cost of Poor Quality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Cost of Quality Examples . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Strategy Deployment Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Dashboard Design . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Information Systems Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Integrating Six Sigma with Other InformationSystems Technologies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Data Warehousing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .OLAP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Data Mining . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .OLAP, Data Mining, and Six Sigma . . . . . . . . . . . . . . . . . . . . . . .Benchmarking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .The Benchmarking Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Getting Started with Benchmarking . . . . . . . . . . . . . . . . . . . . . .Why Benchmarking Efforts Fail . . . . . . . . . . . . . . . . . . . . . . . . . .The Benefits of Benchmarking . . . . . . . . . . . . . . . . . . . . . . . . . . .Some Dangers of Benchmarking . . . . . . . . . . . . . . . . . . . . . . . . .87878990929495959799102105107Maximizing Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Choosing the Right Projects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Types of Projects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Analyzing Project Candidates . . . . . . . . . . . . . . . . . . . . . . . . . . .Using Pareto Analysis to IdentifySix Sigma Project Candidates . . . . . . . . . . . . . . . . . . . . . . . . . .Throughput-Based Project Selection . . . . . . . . . . . . . . . . . . . . . .Ongoing Management Support . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Internal Roadblocks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .External Roadblocks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Individual Barriers to Change . . . . . . . . . . . . . . . . . . . . . . . . . . .Ineffective Management Support Strategies . . . . . . . . . . . . . . .Effective Management Support Strategies . . . . . . . . . . . . . . . . .Cross-Functional Collaboration . . . . . . . . . . . . . . . . . . . . . . . . . .Tracking Six Sigma Project Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Financial Results Validation . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Team Performance Evaluation . . . . . . . . . . . . . . . . . . . . . . . . . . .Team Recognition and Reward . . . . . . . . . . . . . . . . . . . . . . . . . . .Lessons-Learned Capture and Replication . . . . . . . . . . . . . . . . 27133133134134135136136137138139141143