Key Points

• Your Process Sigma correlates to how many defects you’ll find per million opportunities.
• The calculation is relatively simple, needing only a few data points to understand.
• Understanding what the value indicates can lead to more efficient processes as a whole.

Consider a power company for illustration purposes: A power company measures its performance in uptime of available power to its 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. Here’s 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 counterpoint. I always like to think back to the pioneer of Six Sigma, Motorola. They built pagers that did not require testing before 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 backward 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) 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 when the customer didn’t 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 straightforward, 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 iSix Sigma Process Sigma Calculator – just input your process opportunities and defects.

Step 5: Look Up Process Sigma

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

How It Relates To Your Production

While you’ve learned all about how to calculate Sigma Level, that doesn’t tell the whole story. A simple fact you have to keep in mind is that this is a measurement intended to track flaws and effects in production. Being able to calculate it or at least just reference it, shows where problems lie in your current workflow.

Now, this isn’t only measurement you have for addressing flaws and defects in processes. As you’ll see in the following section, it is just the tip of the proverbial iceberg.

Understanding Sigma Level: Other Tools and Techniques

So, we have a strong foundation in calculating Sigma Level, but what next? Thankfully, you’ve got no shortage of great tools to make the most of knowing your process’s Sigma Level. As such, you’ll want to take a close look at how it relates to Cpk, which you can find in our guide here.

Additionally, if you need a tool to quickly swap between your yield and Sigma Level, I’d recommend our conversion table. It’s a brisk read, and it’ll show you exactly what you need in no time.

Assumptions

No analysis would be complete without properly noting the assumptions made. In the above table, we have assumed that the standard Sigma shift of 1.5 is appropriate (the 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 using one-tail values of the normal distribution.