How to Calculate Your Baseline Sigma
Six Sigma Calculation

If you work in a manufacturing, processing, or logistic industry, chances are Six Sigma is a common conversation topic. Since its creation in the late 1980s, employers have used the methodology to improve their business process extensively. By definition, a Six Sigma Calculation is a statistical term that measures the number of defects per million opportunities. Whether referring to a product being assembled, data entry, or other processes, each Six Sigma calculation, how many final products will be faulty.

Six Sigma Calculation

Six Sigma Calculation

In industry, there are Two, Three, Four, Five, and Six Sigma. Two Sigma, being the first level of Sigma has a defect-free calculation of 93.32%. Whereas, Six Sigma, the industry leader, had a defect-free calculation of 99.99966%. While both sigmas have a production success of over 90%, their difference can be seen on a mass scale. For example, when producing 1,000,000 products, Two Sigma will have approximately 933,200 that are detected. In other terms, that’s over 2,500 a day, and over 100 per hour. When “time is money”, you need the absolute best for error prevention.

While Six Sigma has the least chance of production error, achieving it is not as simple as some would assume. Individuals and employers devote years of their lives to learning, understanding, and implementing the methodology into their practices. Yet, success is only success if it can be measured correctly. If you’re an organization who has recently begun using Six Sigma in practice, you must calculate your Baseline Sigma.

Six Sigma Calculation

Of course, the easiest and most straightforward way to measure your Baseline Sigma is to calculate the Defect Per Million Opportunity, DPMO. Because Six Sigma focuses on achieving 3.4 errors per million products, this should be your goal. Before you begin to measure your Baseline Sigma, you must first collect three sets of data. First, the number of products you produce. Second, the number of production errors per product. Third, the total number of production errors.

Following your data collection, you then divide the total number of production errors by your total number of products produced. Next, you multiply your answer by the number of opportunities for production error per product. This can be things such every product which begins and completes the production process. Finally, you multiply your end calculation by one million to give you your DMPO. After calculating your DMPO, you can use a data analysis tool to convert your number into a Sigma level. Tools, such as Excel spreadsheets are ideal for data analytics.

What’s Next?

Once you have your Sigma level of quality, you have a few options. Either, decide if you wish to improve your Sigma or find ways to maintain its current standing. Some business processes may be running efficiently without the need for changes. However, most all processes have room for growth and improvement. The first step to improving your process Sigma level is to begin training your employees on the Six Sigma methodology. Whether you wish to require employee certification depends on your individual needs.

Six Sigma Calculation                                 

The calculation of a Sigma level, is based on the number of defects per million opportunities (DPMO).   In order to calculate the DPMO, three distinct pieces of information are required:  

a) the number of units produced  

b) the number of defect opportunities per unit  

c) the number of defects    

The actual formula is:    

DPMO = 

  • (Number of Defects X 1,000,000)
  • ((Number of Defect Opportunities/Unit) x Number of Units) 

Example:                                          

A manufacturer of computer hard drives wants to measure their Six Sigma level. Over a given period of time, the manufacturer creates 83,934 hard drives.   The manufacturer performs 8 individual checks to test quality of the drives.   During testing 3,432 are rejected. 

Inputs:

  • Defects     3432                        
  • Opportunities 83934    
  • Defect Opportunities per unit 8 

Solution:

  • DPMO   5111.159
  • Sigma Level 4.1

Free Excel Six Sigma Calculation Spreadsheet

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