What is Sigma?
Sigma is a statistical measure that indicates how closely data points are to the mean of a set. It is used to evaluate the quality and consistency of a process or system. The higher the sigma level, the better the performance and efficiency of the process. Sigma is often associated with Six Sigma, a methodology used to improve business processes by reducing defects and variability.
Sigma Definition
The sigma level of a process is calculated using the formula: Sigma = (Total number of defects or errors / Total opportunities for defects). A sigma value of 6 indicates that the process produces only 3.4 defects per million opportunities, which is considered a high level of quality.
Examples of Sigma Levels
- Six Sigma: 3.4 defects per million opportunities (99.99966% accuracy)
- Five Sigma: 233 defects per million opportunities (99.977% accuracy)
- Four Sigma: 6,210 defects per million opportunities (99.379% accuracy)
Case Studies
In a manufacturing plant, implementing Six Sigma principles resulted in a significant reduction in defects and improved product quality. The company saved millions of dollars by streamlining processes and reducing waste.
Statistics
Research shows that organizations with higher sigma levels are more likely to achieve customer satisfaction, increase profits, and gain a competitive edge in the market. Companies that adopt Six Sigma practices see an average increase in revenue of 28%.
