Six Sigma Calculations - Invensis Learning

Basically, Six Sigma is the application of mathematical formulas and methods to remove defects & product variations. Six Sigma’s aim is to enhance and increase productivity in the processes (such as how to correct variation) and products. Be sure to keep these Six Sigma measurements and formulas handy when you have gathered your data and begin making your calculations. 

There are some important priorities for any company, such as minimizing expenses, meeting deadlines, improving connectivity, streamlining processes, and cutting waste. All these tasks lead to the successful completion of the project when performed correctly. On a trial basis, Motorola was one of the first major corporations to use Six Sigma to streamline product quality and services in order to raise revenues. The results were very positive and boosted the company’s overall performance.

Key Terminologies

  • Defect: Defect is essentially the failure of a company to meet the customer’s expectations
  • Defect vs Defectives: Any one non-conformity is a “defect” and a unit with a defect or many defects is  called a “defective” unit. 
  • DPU: The average number of defects found while sampling a population is DPU or Defects Per Unit.

DPU = Defects / Total number of units

Example:

Defects=15

Units=500

DPU=15/500=0.03

  • DPO: DPO is Defects Per Opportunity. It is a metric indicating the number of defects per opportunity in a process. 

DPO = Defects / (Total number of units  * opportunities per unit)

Example:

Defects=15

Opportunity Per Unit=5

Units=500

Total Opportunities=500*5=2500

DPO=(15/2500)=0.006

  • DPMO: DPMO is Defects Per Million Opportunities. It is a measure of the number of errors occurring in a business or process. A process may have several possibilities for error per occurrence.

DPMO = DPO * 106

(or)

DPMO = DefectsTotal number of units  * opportunities per unit * 106

Example:

Defects=15

Opportunity Per Unit=5

Units=500

Total Opportunities=500*5=2500

DPMO=(15/2500)*106=6000

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  • Yield: Yield is specified as a percentage of met commitments over total number of opportunities

Yield = 1-DPO

Example:

Defects=15

Opportunity Per Unit=5

Units=500

Total Opportunities=500*5=2500

DPO=(15/2500)=0.006

Yield= 1-0.006=0.994

Six Sigma Calculations

A Production process must produce less than 3.44 defects per 1,000,000 opportunities in order to achieve a Six Sigma level. If you have a Six Sigma process running, you have almost removed all the defects — it’s almost fine. Most processes don’t run on Six Sigma. They’re working at 5 Sigma, 4 Sigma or worse. To get an appreciation of the numbers involved, here’s the full scale:

Sigma LevelDefect RateYield
2𝛔308,770 DPMO69.10%
3𝛔66,811 DPMO93.33%
4𝛔6,210 DPMO99.38%
5𝛔233 DPMO99.97%
6𝛔344 DPMO99.99%

To assess whether the process capability is relative to the process specifications, the Sigma Process rating should be determined. We must compute the total number of defects, the total number of opportunities, and the defect rate to calculate the process sigma rating.

A defect is something beyond the requirements of the customer. The opportunity, on the other hand, is the total number of probabilities for failure. Based on the Sigma Process Table, the Six Sigma Rating is predicted to yield 99.99966 percent. The percentage of products or services without defects is the yield. 

Example of Six Sigma Calculation

A project is based on a billing mechanism. The team needs the customer to have the right bills sent. For this process, they have described one opportunity-either the bill is correct or not. In terms of complexity, all of the bills generated are the same. The team took a sample of 250 bills and identified 60 defects.

Example of Six Sigma Calculation - Six Sigma Calculations - Invensis Learning

Total Number of Defects: 60

Total Number of Units: 250

Total Number of Defect Opportunities per Unit: 1

DPU: 

DPU=DefectsTotal number of units= 60/250=0.24

DPO:

DPO=DefectsTotal number of units  * opportunities per unit= 60/(250*1)=0.24

DPMO:

DPMO=DPO * 106 = 0.24 * 106=240,000

Yield:

Yield=1-DPO= 1-0.24=0.76

Based on the Process Sigma table, the process being implemented by the team only has a sigma rating between 2 to 3. The higher the degree of sigma, the lower the number of defects.

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Why is six sigma important?

Failure is cancer that lurks in your business, and Six Sigma will prevent many small cancers from spreading in your business. Without quality control and error control, business cancer will begin to consume your business. Six Sigma methodologies are looking for perfection or as close as possible to 3.4 defects per million. Methodologies rely on many aspects, from the skillful decision to the quality of the product and the processes that produce it. Most of the businesses run at Three or Four Sigma. That means that the losses they incur as a consequence of poor quality cost them 10 to 15% of their profits. However, a Six Sigma business will produce considerable savings. 

Final Thoughts

Globally there is a huge demand for Six Sigma certified professionals to help organizations achieve high-quality output and ROI. The enterprises usually divide their workforce depending on the hierarchy to get them trained in different Lean Six Sigma training programs in Yellow Belt, Green Belt, Black Belt, Master Black Belt, and Six Sigma Champion.

To get a better understanding of which Lean Six Sigma course benefits the most for you or the team, check out some of the popular courses below to get a comprehensive understanding of the same: 

 

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Arvind Rongala
Arvind Rongala, an engineer by education, has deep experience of serving the IT-BPO industry for more than 8 years. With his keen interest in the learning and development sector, Arvind spearheaded the launch of Invensis Learning as the training and certification arm of Invensis Technologies. As the Director of Invensis Learning, and with offices in the US, India, and Australia, he ensured the company became a trusted training partner for many Fortune 1000 clients and gain global recognition in a short span of time. { YourStory.com has featured a story about Arvind about his achievements over the years. } With his expertise in Project Management, IT Service Management, Quality Management, and IT Security Governance, he has been a guest author for various popular digital publications such as Business Insider, Business today, Project Times, Customer Think, Tech Sling, and Businessworld.

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