iSixSigma

Sigma Level Calculation

Six Sigma – iSixSigma Forums General Forums Tools & Templates Sigma Level Calculation

Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • #53645

    goradia
    Participant

    Note: I’m new to Six Sigma process improvement

    I’ve a situation where I’ve to calulate my company’s annual saving if current process Sigma level is increased by 1.

    I’ve following data in hand:

    a. Current Process Sigma Level : 3.54
    b. The plan produces around 1 million package and each package cost $2.

    I’m not sure how to calulate my annual saving if Sigma level is increased by 1.

    Any pointers in solving this would be greatly appreciated.

    Thanks,
    HG

    0
    #190982

    Strayer
    Participant

    You have insufficient data. COPQ (cost of poor quality) varies depending on when each defect occurs in the process, how long it persists until detected, what is done when it is detected (scrap/rework), and cumulative cost at that point. Add in material risk of loss (remediation/liability/penalty/goodwill) if the defect is undetected. Even if you can measure current COPQ there is no established ratio between COPQ and process sigma. Don’t try to go there. You will do better by researching case studies and other pubished reports of savings resulting from a 1 sigma improvement and extrapolating.

    0
    #190983

    Andrew Banks
    Participant

    Very convenient that the plant produces 1 million parts per year. Is this a homework question?

    I’ll give you a hint – find a Process Sigma to DPMO table…

    0
    #190984

    goradia
    Participant

    Thanks for the response.

    I’ve figured out the solution to my issues.

    Thanks,
    HG

    0
Viewing 4 posts - 1 through 4 (of 4 total)

You must be logged in to reply to this topic.