Time
9 hours 3 minutes
Difficulty
Beginner
CEU/CPE
9

Video Transcription

00:00
Hi, guys. Welcome to getting started definition of six Sigma uncaf, Rin MacGyver. And today we're going to go over the term six Sigma and what its implications for the business are.
00:15
All right. So before we get started and giving you no context,
00:19
the average American company operates at a four signal level. What this means is you have a 0.6% defect rate, or 6000
00:30
210 defects per 1,000,000 opportunity.
00:36
So now that you have no context, but you know the statistics,
00:40
a sigma is a statistical term for standard deviation. So if you interact with any statisticians and you hear them talking about signal levels, what they're talking about is a standard deviation on a normal distribution or a bell shaped curve. Six Sigma
00:59
indicates
01:00
six standard deviations from the main on a normal distribution. So when we talk about six dinner deviations from the mean, what we're talking about is the mean being what your organization functions that on an average day for your defect rate
01:19
and your customer requirements.
01:22
So when you start adding standard deviations from the mean, what you start doing is including the likelihood of any of those defects.
01:33
So when you hear a six Sigma practitioner say that a organization is a world class organization, what we're saying is is that they function at a six Sigma level for accuracy or therefore, conversely, defects. So it has everything to do
01:52
with your average.
01:53
And then how many? How many defects you have from Bud.
01:59
So looking at a normal distribution, this should look fairly familiar for anybody who went to college and prayed to dear God that everybody landed in the one standard deviation from the mean.
02:12
So most people are familiar with these three standard deviations from the mean. So with that, 68.2% of all data on a normally destroy distributed,
02:27
normally distributed distribution curve
02:30
are going to be within one standard deviation of the mean and remember standard deviations can be wide or small, depending on the data they're pulled from
02:38
95.46 will be within two. Standard deviations of the mean
02:44
99.73 will be within three standard deviations of the main. This is where most statisticians operate is within that three standard deviations from the mean
02:58
six sigma operates in six standard deviations from the mean. So what that means is that all of your data or your accuracy is going to take place within six. Standard deviations of the mean will go over what those numbers actually look like. But when you look at a standard distribution curve,
03:17
you this is what you're going to look for first
03:20
from,
03:21
um,
03:23
deviations from the mean or signal levels.
03:25
What does this actually mean? So six Sigma is used to describe processes that are 99.999998 accurate or in a more operational sense of the words, they have 3.4 defects per 1,000,000 opportunities.
03:45
So if you have a 1,000,000 times that you run through this process,
03:50
3.4% of those times will not meet customer specifications.
03:55
That's what six signal means. So now when we talk about it in a signal rate standpoint, the Four Sigma that most most American companies function and means that you have about a zero excuse me, 0.6% rate of defect. This is good enough
04:15
for quite a few companies. So if you remember, we go back to the lean principles
04:19
where we seek perfection. That's where you start seeing the push from the four to the five to the Six Sigma. So you also, when we're reporting Sigma's can report in very small intervals. Sigma tables will calculate it out, too.
04:35
Believe it's for significant figures for how to report your signal levels. Generally, it's one significant figure, so it's a 4.5 sigma or a 5.2 sigma.
04:50
All right, so when we're talking about Six Sigma and what does Six Sigma mean if we remember that a sigma is a standard deviation from the mean on a normal distribution or a bell shaped curve? Six Sigma is a way to describe organizations respective of their defect rate.
05:11
So in a 1,000,000 chances
05:13
toe have a defect. They only had 3.4 defects. It is technically
05:19
a definition for six standard deviations from the mean at both positive and negative

Up Next

Lean Six Sigma Yellow Belt

This online Lean Six Sigma Yellow Belt course teaches you how and where to apply the Lean and Six Sigma process improvement methodologies. Once completed, you will have the knowledge to pass the Six Sigma Yellow Belt certification exam.

Instructed By

Instructor Profile Image
Kathryn McIver
Lead Instructor at Evidence-Based Management Association
Instructor