Six Sigma is a data-driven approach for problem-solving. Because we work with data, it is only natural that we will use statistics, as you will learn in any Six Sigma Green Belt training. One particular statistical term is crucial for Six Sigma. It is also essential for understanding Six Sigma processes as they are briefly explained in Six Sigma courses. Sigma Level is that term. This is the foundation of all Six Sigma projects.
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This article will discuss Six Sigma’s definition and correlation between Defects Per Million Opportunities (DPMO), and how to calculate this metric using examples.
What is Sigma Level in Six Sigma
Let’s first understand the meaning of the word “Sigma”. Sigma is a statistical term. It is the symbol for Standard Deviation. Standard Deviation can be described as an absolute measure of data dispersion or variation. The Standard Deviation or variation in a process’s performance can be determined by analyzing data. Sigma is a measure that uses past data to predict how the process will perform in future.
Let’s now look at Sigma Level. It is a baseline metric that helps to understand the process capability needed to meet customer needs. To calculate the Sigma Level of a product or process, we use the Defects Per Million Opportunities (or DPMO) metric. The Sigma Levels of all processes are used to compare the performance of an entire organization. These include One Sigma, Two Sigma and Three Sigma. Four Sigma, Four Sigma and Six Sigma. must be determined.
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Examples of real-world Sigma Levels
Sometimes, statistical terms can seem abstract and arbitrary. The meaning of Sigma Levels becomes clear when we look at real-world examples. What is a good sevel? Two short or long landings at major airports are possible in a world with a level of 3.8. A world that operates on levels 6 has only one short or long landing per five years. A world with a Sigma Level of 3.0 means that doctors can prescribe 200,000 incorrect drug prescriptions each year, whereas a world with 6 Sigma Levels would only have 68. These are quite drastic differences in process performance, even though they are only 2.2 Sigma levels apart. It is common for companies to aim for processes that operate at a Six Sigma level. These real-world examples show why.
The correlation between DPMO Level and Sigma Level
It is time to review DPMO. DPMO is a measure of the long-term success rate of a process. It measures the number of defects a process produces. Sigma Level examines variation in a process, while DPMO considers the rate at which defects are produced in a process (i.e. Outputs that are not specified, it is easy to see a correlation. The DPMO of a procedure increases, and vice versa, so does the Sigma level. The yield will increase as the level rises. In other words, Sigma level is directly proportional to yield. Let’s quickly recall the definition of yield: it is the ratio between the number of quality products produced and the total number produced.
How to calculate Sigma Level in a process
First, calculate the DPMO of your product or process. Once you have the DPMO figures, you can refer the Sigma Conversion Table or a Sigma Level Calculator to determine the corresponding sigma levels. The conversion table shows a column for Sigma Short Term & Sigma Long Term.
Sigma Short Term
Let’s take a look at the Sigma Short Term column. Why is this only the ‘Sigma Short Term column? It is important to understand that the sigma level in a process is a unilateral figure of merit. This is the merit of term