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How To Calculate Sigma Level For A Process

The document provides a 5-step process for calculating process sigma: 1) Define opportunities and defects based on what customers notice 2) Measure opportunities and defects 3) Calculate yield by subtracting defects from opportunities 4) Look up process sigma using the yield on a conversion table 5) Note any assumptions made in the analysis

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609 views9 pages

How To Calculate Sigma Level For A Process

The document provides a 5-step process for calculating process sigma: 1) Define opportunities and defects based on what customers notice 2) Measure opportunities and defects 3) Calculate yield by subtracting defects from opportunities 4) Look up process sigma using the yield on a conversion table 5) Note any assumptions made in the analysis

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maherkamel
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How to Calculate Process Sigma

How to Calculate Process Sigma


Consider a power company for illustration purposes: A power company measures their performance in uptime of available power to their grid. Here is the five-step process to calculate your process sigma.

Step 1: Define Your Opportunities


An opportunity is the lowest defect noticeable by a customer. This definition, of course, is debatable within the Six Sigma community. Heres a useful snippet from the forum discussing this point: Typically, most products (and services) have more than one opportunity of going wrong. For example, it is estimated than in electronics assembly a diode could have the following opportunities for error: 1) wrong diode and 2) wrong polarity (inserted backwards), so for each assembly shipped, at least two defect opportunities could be assigned for each diode. Apparently, some manufacturers of large complex equipment with many components prefer to [count two opportunities in this case]. My point is that this approach dilutes Six Sigma metrics. -Anonymous Many Six Sigma professionals support the counter point. I always like to think back to the pioneer of Six Sigma, Motorola. They built pagers that did not require testing prior to shipment to the customer. Their process sigma was around six, meaning that only approximately 3.4 pagers out of a million shipped did not function properly when the customer received it. The customer does not care if the diode is backwards or is missing, just that the pager works. Returning to our power company example, an opportunity was defined as a minute of uptime. That was the lowest (shortest) time period that was noticeable by a customer.

Step 2: Define Your Defects


Defining what a defect is to your customer is not easy either. You need to first communicate with your customer through focus groups, surveys, or other voice of the customer tools. To Motorola pager customers, a defect was defined as a pager that did not function properly. Returning to our power company example, a defect is defined by the customer as one minute of no power. An additional defect would be noticed for every minute that elapsed where the customer didnt have power available.

Step 3: Measure Your Opportunities and Defects


Now that you have clear definitions of what an opportunity and defect are, you can measure them. The power company example is relatively straight forward, but sometimes you may need to set up a formal data collection plan and organize the process of data collection. Returning to our power company example, here is the data we collected: Opportunities (last year): 525,600 minutes Defects (last year): 500 minutes

Step 4: Calculate Your Yield


The process yield is calculated 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. Returning to our power company example, the yield would be calculated as:((525,600 500) / 525,600) * 100 = 99.90% Alternatively, the yield can be calculated for you by using the iSixSigma Process Sigma Calculator just input your process opportunities and defects.

Step 5: Look Up Process Sigma


The final step (if not using the iSixSigma Process Sigma Calculator) is to look up your sigma on a sigma conversion table, using your process yield calculated in Step 4.

Assumptions
No analysis would be complete without properly noting the assumptions that you have made. In the above analysis, we have assumed that the standard sigma shift of 1.5 is appropriate (the 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.

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1. 2. 3. 4. 5. Should You Calculate Your Process Sigma? Process Sigma Calculator Assumptions Yield Defects Per Unit DPU Defects (%)

Process Sigma Calculator Assumptions


The Basic Mode of the Sigma Calculator automatically adds a 1.5 Sigma shift to the process Sigma value that is calculated. Why is this done? Its done because it is the standard way that Sigma is reported.

Definitions
Unit Opportunity Defect DPU DPMO Defects (%) Yield (%)

Understanding the Basic and Advanced Modes


The Basic Mode of the Sigma Calculator automatically adds a 1.5 Sigma shift to the process Sigma value that is calculated. Why is this done? Its done because it is the standard way that Sigma is reported (note: this may be different in your company, but it is done in this manner by Motorola, GE and many other companies). By doing so, the calculator result assumes that you are providing long-term data and it is providing short-term Sigma. The 1.5 Sigma shift is based on the assumption that over time, and with a sufficiently large number of samples, a realistic Sigma value is 1.5 Sigma less than that calculated to show the success of your project (i.e. that shown in this calculator and in reports to your company). If you want to calculate the process Sigma using data other than long-term, you should switch to the Advanced Mode where you can change the process Sigma shift value from 1.5 to whatever you feel is appropriate.

Here are a couple of examples to help illustrate the calculations. A long-term 93% yield (e.g. 100 opportunities, 7 defects) equates to a process Sigma longterm value of 1.48 (with no Sigma shift) or a process Sigma short-term value of 2.98 (with a 1.5 Sigma shift). A long-term 99.7% yield (e.g. 1,000 opportunities, 3 defects) equates to a process Sigma long-term value of 2.75 (with no Sigma shift) or a process Sigma short-term value of 4.25 (with the 1.5 sigma shift). Final Thought: When we talk about a Six Sigma process, we are referring to the process short-term (now). When we talk about DPMO of the process, we are referring to long-term (the future). We refer to 3.4 defects per million opportunities as our goal. This means that we will have a 6 sigma process now in order to have in the future (with the correction of 1.5) a 4.5 sigma process which produces 3.4 defects per million opportunities. Notice: Sigma with a capital S is used above to denote the process Sigma, which is different than the typical statistical reference to sigma with a small s which denotes the standard deviation.

Understanding the Formula


Defects Per Million Opportunities (DPMO) = ((Total Defects) / (Total Opportunities)) * 1,000,000 Defects (%) = ((Total Defects) / (Total Opportunities)) * 100 Yield (%) = 100 (Defects Percentage) process Sigma = NORMSINV(1-((Total Defects) / (Total Opportunities))) + 1.5 Alternatively, process Sigma = 0.8406 + SQRT(29.37 2.221 * (ln(DPMO))). Reference: Breyfogle, F., 1999. Implementing Six Sigma: Smarter Solutions Using Statistical Methods. 2nd ed. John Wiley & Sons.

Understanding Negative Sigma


Sigma value is simply a modified Z score (Table of the Standard Normal (z) Distribution). Sigma (with a capital S) is not the same thing as the standard

deviation of a process, referred to as sigma (with a lower case s or as the greek letter s). Consequently, it is quite possible to get a negative sigma value. A negative sigma value means that most of your product or service (process) is completely outside your customers specification range.

DPM 2 5 9 13 21 32 48 72 108 159 233 337 483 687 968

DPM and Process Sigma Table Short-Term Process Long-Term Process Sigma (st) Sigma (lt) 6.0 4.5 5.9 4.4 5.8 4.3 5.7 4.2 5.6 4.1 5.5 4.0 5.4 3.9 5.3 3.8 5.2 3.7 5.1 3.6 5.0 3.5 4.9 3.4 4.8 3.3 4.7 3.2 4.6 3.1

Yield 99.99966 99.99954 99.99915 99.9987 99.9979 99.9968 99.995 99.993 99.989 99.984 99.98 99.97 99.95 99.93 99.90

1,350 1,866 2,555 3,467 4.661 6,210 8,198 10,724 13,903 17,864 22,750 28,716 35,930 44,565 54,799 66,807 80,757 96,801 115,070 135,666 158,655 184,060 211,855 241,964 274,253 308,538 344,578 382,089 420,740 460,172 500,000 539,828 579,260 617,911 655,422 691,462 725,747 758,036

4.5 4.4 4.3 4.2 4.1 4.0 3.9 3.8 3.7 3.6 3.5 3.4 3.3 3.2 3.1 3.0 2.9 2.8 2.7 2.6 2.5 2.4 2.3 2.2 2.1 2.0 1.9 1.8 1.7 1.6 1.5 1.4 1.3 1.2 1.1 1.0 0.9 0.8

3.0 2.9 2.8 2.7 2.6 2.5 2.4 2.3 2.2 2.1 2.0 1.9 1.8 1.7 1.6 1.5 1.4 1.3 1.2 1.1 1.0 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0.0 -0.1 -0.2 -0.3 -0.4 -0.5 -0.6 -0.7

99.87 99.81 99.74 99.65 99.5 99.4 99.2 98.9 98.6 98.2 97.7 97.1 96.4 95.5 94.5 93.3 91.9 90.3 88.5 86.4 84.1 81.6 78.8 75.8 72.6 69.1 65.5 61.8 57.9 54.0 50.0 46.0 42.1 38.2 34.5 30.9 27.4 24.2

788,145 815,940 841,345 864,334 884,930 903,199 919,243 933,193

0.7 0.6 0.5 0.4 0.3 0.2 0.1 0.0

-0.8 -0.9 -1.0 -1.1 -1.2 -1.3 -1.4 -1.5

21.2 18.4 15.9 13.6 11.5 9.7 8.1 6.7

An Explanation of the 1.5 Sigma Shift 6 sigma actually translates to about 2 Defects Per Billion Opportunities (DPBO), and 3.4 Defects Per Million Opportunities (DPMO), which we normally define as 6 sigma and corresponds to a sigma value of 4.5. Where does this 1.5 sigma difference come from? Motorola has determined, through years of process and data collection, that processes vary and drift over time - what they call the LongTerm Dynamic Mean Variation. This variation typically falls between 1.4 and 1.6. By offsetting normal distribution by a 1.5 standard deviation on either side, the adjustment takes into account what happens to every process over many cycles of manufacturing Simply put, accommodating shift and drift is our 'fudge factor,' or a way to allow for unexpected errors or movement over time. Using 1.5 sigma as a standard deviation gives us a strong advantage in improving quality not only in industrial process and designs, but in commercial processes as well. It allows us to design products and services that are relatively impervious, or 'robust', to natural, unavoidable sources of variation in processes, components, and materials. The reporting convention of Six Sigma requires the process capability to be reported in short-term sigma -- without the presence of special cause variation. Long-term sigma is determined by subtracting 1.5 sigma from our short-term sigma calculation to account for the process shift that is known to occur over time. After a process has been improved using the Six Sigma DMAIC methodology, we calculate the process standard deviation and sigma value. These are considered

to be short-term values because the data only contains common cause variation -- DMAIC projects and the associated collection of process data occur over a period of months, rather than years. Long-term data, on the other hand, contains common cause variation and special (or assignable) cause variation. Because short-term data does not contain this special cause variation, it will typically be of a higher process capability than the long-term data. This difference is the 1.5 sigma shift. Given adequate process data, you can determine the factor most appropriate for your process.

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