Many tools and resources are available for organizations that want to improve and enhance their productivity. For example, six Sigma and Lean Six Sigma are designed to help companies deal with defects and improve their processes.
This article focuses on the Six Sigma calculator and how it relates to the DPMO formula, how to use the DPMO formula to calculate relevant values, rules of thumb regarding the Sigma level calculator, benchmarking, and other concepts like the DPMO calculator.
But before we immerse ourselves in the technical side, let’s review Six Sigma itself.
What is Six Sigma?
Six Sigma is the process of applying mathematical formulae and methods to eliminate defects and unwanted product variations. Six Sigma’s purpose is to enhance and increase an organization’s productivity in the processes (e.g., how to correct variation) and products.
Some specific priorities are typically found in any company, regardless of size or industry, like meeting deadlines, minimizing expenses, improving connectivity, streamlining processes, and eliminating waste. When performed correctly, these tasks result in the successful completion of the project.
On the other hand, Lean Six Sigma is a fusion of Six Sigma with Lean methodology. Lean methodology is a mindset or improvement toolkit that streamlines the transactional and manufacturing processes by optimizing flow and removing waste while continuing to give their customers top value. This process meshes well with Six Sigma’s process improvement strategy that reduces defects and boosts product quality and quantity.
How Does Process Control Relate to Six Sigma?
Statistical Process Control, also called SPC, is a Six Sigma subset used to monitor operations to identify abnormalities and offer possible solutions. Since every manufacturing process inevitably has some level of variation, SPC provides a means of measuring whether the variation is normal and thus not affecting efficiency or is abnormal and requires taking steps to optimize the process.
SPC methods plot process data over time and generate a control chart measuring the expected variation degree in any manufacturing process. This degree is called ‘common cause variation.’ Any variations that exceed this norm are called ‘special cause variations’ and are consequently flagged for attention. Any improvements to the process can cause variation and thus create more predictability and consistent output. Additionally, special causes can be examined and incorporated into the overall process if they cause improvement or removed if they hurt output.
Now let’s look at some detailed Six Sigma calculator information.
How Do You Calculate Process Sigma Rating Yourself?
To accomplish a Six Sigma level, a production process must generate less than 3.44 defects per 1,000,000 opportunities. To identify if the process’s capability is relative to the process’s specifications, you must compute the Process Sigma rating. To compute this rating, we must determine factors like the total number of defects, defect rate, and the total number of opportunities.
We define a defect as anything outside the customer’s expectations or requirements, while opportunities are the total number of failure probabilities. The yield is the percentage of services or products with zero defects. For example, a Six Sigma rating requires a 99.99966% yield. In concrete terms, that’s like one incident of shipping the wrong product to an online customer in twenty-five years!
Presenting Six Sigma Calculator Terminology
Before we look at a DPMO calculator or try using a Sigma Six formula, let’s learn some relevant terms and put any previously explained terms related to the Six Sigma calculator into one convenient place.
1) Defect. A defect is anything that falls outside of the customer’s needs and expectations.
2) Defects Per Million Opportunities (DPMO). The total number of defects discovered in a sample is divided by the total defect chances, then multiplied one 1 million.
3) Defects per Opportunity (DPO): The number of total defects in a sample gets divided by the total defect chances. DPO = Defects / (Total number of units * opportunities per unit).
4) Defects per Unit (DPU): The total number of defects in a sample divided by the number of sampled units. DPU = Defects / Total number of units.
5) Opportunities. The total number of probabilities for failure. For instance, a call center employee may have five ways of failing:
a) Bad grammar
b) A heavy accent that makes comprehension difficult
c) Bad listening skills
d) Didn’t follow the company’s script
e) The customer is dissatisfied with the results of the call
So the call center employee has five ways they could fail. So if they take 100 calls, that’s a total of 500 opportunities to fail.
1) Sigma Level: A means of comparing a company’s processes performances as distinct elements. Here are the theoretical defect rates of all six Sigma process levels.
a) 1 Sigma = 691,462 DPMO, 30.85% defect-free
b) 2 Sigma = 308,538 DPMO, 69.146% defect-free
c) 3 Sigma = 66,807 DPMO, 93.319% defect-free
d) 4 Sigma = 6,210 DPMO, 99.379% defect-free
e) 5 Sigma = 233 DPMO, 99.977% defect-free
f) 6 Sigma = 3.4 DPMO, 99.99966% defect-free.
2) Yield: The percentage of a process free of defects.
Also Read: What is Lean Methodology?
The DPMO Calculator
If you don’t want to be bothered messing around with excessive numbers and calculations, here is a Defects Per Million Opportunity (DPMO) calculator you can use to calculate the Sigma-metric.
Explaining Sigma Level Benchmarking
Six Sigma benchmarking involves an organization analyzing its in-house performance instead of measuring it against the standards of its industry or a world-class company in another industry. Benchmarking usually focuses on operations and processes within one area of the company.
So benchmarking doesn’t involve directly comparing an operation against a competitor like the Six Sigma calculator. Instead, it’s about comparing an aspect of one process against a best-in-class operation. So, for example, a credit card company could use key metrics to measure its customer service performance, then measure those metrics against those of a health insurance company with a reputation as a customer service standard setter. Thus, the original company can see where its customer service falls short and make the appropriate adjustments.
So, we can break down benchmarking into four easy steps:
1) Measuring. Teams choose an area where the company is underperforming, then measure key performance indicators to see where it currently stands.
2) Researching. Businesses measure those same key metrics in the chosen operation or process they want to improve (e.g., handling customer complaints or creating new sales leads).
3) Collecting. Teams figure out how other companies achieve this high standard in the key metrics. This process often means touring the organization’s operations or meeting with its people.
4) Comparing. Teams compare their operations with those of world-class organizations and find areas where they can improve. The team then makes the changes needed to achieve that higher standard in the key performance metrics.
Some Six Sigma Rules of Thumb
Keep these rules in mind when making Six Sigma calculations.
1) The minimum performance rating for any industrial process is 3-Sigma.
2) The typical performance of a basic business and industry process is usually considered to fall around 4-Sigma.
3) The primary goal of any business or industry Six Sigma project is usually to raise 4-Sigma to 5-Sigma. This increase indicates a very significant improvement: a 100-fold decrease in defects in the short term.
4) Unfortunately, some processes will never reach 6-Sigma, but getting 5-Sigma is typically enough. However, the process may be re-engineered in some cases to achieve 6-Sigma performance.
Are You Looking for Six Sigma Certification?
Six Sigma is a popular process that helps companies achieve more outstanding results, improving their processes and strengthening their customer base. In today’s highly competitive business environment, companies need every advantage. Consequently, today’s businesses need professionals who understand Six Sigma or Lean Six Sigma.
If this field interests you, your chances of securing a good position in this challenging field will increase if you acquire an online Six Sigma certification. Simplilearn, in collaboration with the University of Massachusetts, offers a post graduate program in Lean Six Sigma that equips you to tackle the intricacies of Six Sigma and become a valuable, sought-after expert.
This six-month online certification course is aligned with IASSC-Lean Six Sigma and provides excellent skill training in:
- Agile Management
- Digital Transformation
- Lean Management
- Lean Six Sigma Black Belt
- Lean Six Sigma Green Belt
- Quality Management
After you complete the bootcamp, you will earn your certificate and gain alum membership to UMass Amherst Alumni Association.
According to Salary.com, a Six Sigma Green Belt professional working in the United States earns an annual average salary of $111,800, with a range that can go as low as $71,490 and as high as $123,386. These figures can vary depending on the region of the country, the applicant’s skill and experience level, and current economic conditions.
So, don’t delay. Equip yourself with a full range of Lean Six Sigma skills and get ready to tackle the challenges of 21st-century business in a secure and well-paying career. Sign up today!