Definition of Opportunity:« Back to Glossary Index
Most of us understand the word “opportunity” as part of our everyday vernacular. An “opportunity” is defined in the common dictionary as “a favorable combination of circumstances, time, and place.” That doesn’t really cover it all when we are looking at it through the Six Sigma lens.
Overview: What is an opportunity?
In Six Sigma, an opportunity is defined as the total number of chances for a defect. To expand, an opportunity is an area in a process, service, product, or another system where there is the possibility for there to be a defect.
3 benefits of opportunities
There are a few benefits to being able to identify areas of opportunity:
1. Reaching Six Sigma level of quality
By finding areas of opportunity, spotting defects, and then making moves to eliminate them, a company can move towards having a Six Sigma level of quality in their processes.
2. Opportunities are key to process improvement
In the process improvement method known as DMAIC, defining and analyzing opportunities are both key steps.
3. They are key to finding your Sigma level
Knowing the chance for opportunities is necessary to find out what Sigma level your business is currently operating at.
Why are opportunities important to understand?
Understanding opportunities is important for the following reasons:
1. You need to know where things can go wrong
Having a full understanding of where there are opportunities for defects gives you a more well-rounded view of your business operations and processes. This can help you prepare for issues.
2. You need to know where things can improve.
Understanding where there are opportunities for defects allows you to have the chance to figure out how to eliminate them as much as possible and improve how your processes are done.
3. It is important in making calculations
You need to understand opportunities in order to figure various metrics that are important to business. Some examples would be DPO (Defects Per Opportunity) and DPMO (Defects Per Million Opportunities).
An industry example of opportunities
Tami has a small greeting card business that she is looking to expand. First, though, she feels like she needs to get a handle on quality control. She decides to look at a sample order of 100 and to determine the DPO. She figures that each order has three opportunities for defect. These are the cards being damaged, incomplete, or displaying improper formatting.
Out of the sampling, she finds 3 cards that are damaged, 2 that are incomplete, and 1 that has a formatting issue. That comes to a total of 6 cards that have faults.
(Number of Defects)/(Number of Units * Number of Defects Opportunities Per Unit)
6 / (100 * 3)
6 / 300 = .02
From this sampling, it is determined that there is a .02 chance of defect per item. Out of each set of 100, there are 2 defect opportunities. Tami has to decide if this is satisfactory or if she should now analyze her processes to bring this number down even further.
3 best practices when thinking about opportunities
Here are some practices to keep in mind when it comes to opportunities:
1. Recognize the link between opportunities and defects
In simple terms, the higher the number of opportunities available, the greater the chance for defects.
2. Limit opportunities
Reducing the number of opportunities helps to control the quality output of your processes.
3. Take the time to analyze opportunities
One of the best ways to limit opportunities is to properly analyze them once they are identified. Thoroughly look over how they can be modified or even eliminated in order to minimize the chance for faults.
Frequently Asked Questions (FAQ) about opportunities
1. How do opportunities factor into reaching Six Sigma level?
To achieve Six Sigma, processes must not go beyond 3.4 defects per million opportunities.
2. How is DPO (Defects Per Opportunity) calculated?
DPO is calculated by dividing the Total Number of Defects by Total Opportunity.
3. What is NPMO?
NPMO is the abbreviation of Nonconformities Per Million Opportunities and is interchangeable with Defects Per Million Opportunities.
When we think of opportunity in everyday life, we think of it as something to maximize. In Six Sigma, however, opportunities are the chances to commit errors. When we think of opportunity in everyday life, we think of it as something to maximize. In Six Sigma, however, opportunities are the chances to commit errors. Obviously, it is important to know how these two definitions of the same word differ from one another. In regular life, you should seize every opportunity you can. In Six Sigma, opportunities are to be minimized in order to have as few faults as possible in an order.« Back to Dictionary Index