Six Sigma itself is the go to method. In order to achieve Six Sigma you need to improve your process performance by minimizing the process variation so that your process he has enough room to fluctuate within the customer specification limits. Then shifting your process average so that it is centered between your customer specification limits and accomplishing these two process improvements along with stabilization and control. You can achieve Six Sigma This table shows each sigma levels corresponding defect rate and DPM more defects per million opportunities. The higher the Sigma level, the lower the defective rate and the PMO Process operating at one sigma has a defect rate of approximately 70%. This means that the process will generate defect free products only 30% of the time.
What about processes with more than one sigma level? A higher sigma level means a lower defect rate. Let's take a look at the defect rates of processes at different sigma levels are one sigma. We have 690,000 defects per million units. For two sigma, we have 308,000 defects per million units. three sigma is 66,800 defects per million units.
Four sigma is 6210 defects per million units, five sigma, we get to 230 defects per million you units and six sigma is 3.4 defects per million units. Cost of quality is a way to determine what is the cost of having defective goods. If you look at the cost of quality, the lower the Sigma level, the more defective products are produced, the higher the cost of quality, which leads to poor performance and financial losses. How does sigma level translate into some specific examples? Let's take a look at processes operating at three sigma. three sigma processes have a defect rate of approximately 7%.
What would happen if processes operated three sigma, virtually no modern computer would function. More than 10 million healthcare claims would be mishandled each year 54,000 chicks would be lost each night. by a large bank, more than half a million mistaken call details would be recorded each day by a call center. Which one sigma the situation looks much worse. Most manufacturing companies operate at five sigma. There are some that treat Six Sigma level of operations.
But it is good to remember that Six Sigma can be reached in manufacturing, but difficult to reach in services. In services, the benchmark will be three to four sigma, and very rarely above that. It is possible where we have repeated activities that can be automated, for example, in call center. So here is a difference that Six Sigma makes for us when we are able to get down to that three parts per million with respect to defect in our processes. For example, at three sigma, we lose 20,000 pieces of mail per hour, but with six sigma quality, we lost only seven, which is a big improvement. 5000 incorrect surgeries per week versus just 1.7 is a big difference.
How about outages of electricity of seven hours per month versus very rare one hour every 34 years on drug prescriptions, you know 54,000 prescriptions are wrong, which is not so good. However, with six sigma quality they should happen only once every 25 years. And how about landing airplanes or operating a nuclear power plant. There are industries in which working at Six Sigma may not be just good enough. It is very easy to see how Six Sigma quality can affect every single industry that we work In beat profit, nonprofit government, manufacturing, information technology, healthcare, customer service, and many others. So there are no limits in terms of the size or type of organization that can use Six Sigma successfully.
I now have two questions for you to test your understanding of decision. You see the questions on the screen. Take a moment and post session the think about an answer. The answer will appear once you click on the Play button. The first question is what is six sigma. In statistics, sigma is referred to standard deviation, which is a measure of variation.
You will come to the ended variation is the enemy of any quality process. We need to understand, manage and minimize process variation. The next question is what is six sigma? Six Sigma is an aspiration or go of Process Performance. A Six Sigma goal is for a process to operate approximately six sigma away from the customer's high and no specification limits