When companies hear about Six Sigma methodology, they can’t help calculating their process sigma. Calculating your process sigma will tell you how close (to) or far your process is from Six Sigma, that is 3.4 defects per million opportunities or 99.9%.
Just to illustrate the the concept of defect, let’s take an electric company as an example. The performance of a power company is measured in terms of uptime of available power to its grid. In the eyes of the customer, every minute of potential uptime (power is available) is an opportunity, every minute of downtime (power is not available) is a defect.
Calculating process sigma is necessary only when your company is pursuing full implementation of the Six Sigma quality methodology across the organization, otherwise it is only an option.
Let’s say you are interested in calculating your process sigma and have these assumptions: the standard sigma shift of 1.5 is appropriate (a process sigma calculator allows you to specify another value), the data is normally distributed, and the process is stable. In addition, the calculations are made with using one-tail values of the normal distribution. With the assumptions, an article on isixsigma.com recommends the following steps:
Step 1: Define Your Opportunities. The concept of opportunity differs from one company to another, depending on their product/service output. For the electric company example, an opportunity was defined as a minute of uptime. That was the lowest (shortest) time period that was noticeable by a customer. For some manufacturing companies like Motorola, there are more than one opportunity of going wrong. It’s safe to say that an opportunity is an instance that you can satisfy your customers.
Step 2: Define Your Defects. Doing this is not an internal company activity alone. You need to communicate—through surveys, focus groups, and other VOC tools)—with your customers who can tell you what went wrong. Again, for an electric company, a defect is one minute of no power. To Motorola pager customers, for example, a defect is a pager that did not function properly.
Step 3: Measure Your Opportunities and Defects. Once you have identified the opportunities and defects, you are now ready to measure them. Six Sigma tools can give you measurement strategies for that. The article suggests that you read up on the Building a Data Collection Plan for starters.
Going back to our power company example, here is the data collected:
- Opportunities (last year): 525,600 minutes
- Defects (last year): 500 minutes
Step 4: Calculate Your Yield. You calculate your process yield by subtracting the total number of defects from the total number of opportunities, dividing by the total number of opportunities, and finally multiplying the result by 100.
For the electric company, the process yield is calculated as:
- ((525,600 – 500) / 525,600) * 100 = 99.90%
You may also use Process Six Sigma Calculator for this.
Step 5: Look Up Process Sigma
If you are not using (iSixSigma) Process Sigma Calculator, you look up your sigma on a sigma conversion table, using your process yield calculated in Step 4.
Source: Should You Calculate Your Process Sigma?
