Six-Sigma Milestone: An Overall Sigma Level of an Organization

Abstract

In the literature of six sigma, one can see that an organization is classified as either ‘world-class’ or ‘industry average’ or ‘non-competitive’ based on the sigma level – the milestone – it achieves at a given point of time. It is well known that, in an organization, many critical processes exist. When an organization is termed as a ‘six sigma organization’, there exists a question whether all critical processes are at six-sigma level. If all such processes are not at six sigma level then how an overall sigma level is obtained needs further study. Hence, it is attempted to assign weights to all critical processes based on their importance and this information is used along with the defects per million (dpm) units produced by the respective process to determine the overall sigma level, called as ‘weight-based sigma level’ of an organization at a given point of time. As weights are assigned to the dpm's of the respective critical processes, the resulting dpm's are considered equally likely. The approach is described in detail and studied numerically to illustrate the effectiveness of the approach using various arbitrary values of weights and sigma levels.