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How to Calculate Sigma Level in Cost Reduction

Six Sigma – iSixSigma Forums Old Forums General How to Calculate Sigma Level in Cost Reduction

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  • #30624

    NewBee
    Participant

    Here is a cost reduction project.
    Current Cost = 150
    Project Target = 135
    Best Case Scenario = 125.
    Question is..   What is starting & ending Sigma level for the project?
     

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    #79973

    RT
    Member

    NewBee,
    If SS was that easy everyone would be doing it!
    First you have to define what a defect or defective is.  And statistics or probability doesn’t work well with only one data point.  I think your project needs to be broken down to things such as what am I trying to improve (CTQ’s) how good am I today (baseline) what constitutes improvement (spec limits, goals etc.)  This is a very basic explanation but if you buy a book or take a class that gives you the process concepts I think you will see how it fits into your project or program.
    just my opinion

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