Evaluation and Selection of ERP Packages
Evaluation and selection of ERP package is an essential criterion for successful ERP implementation. Quality of selection will have a long term impact on the processes of the organization. It is also not easy to switch to another product with concomitant scale of investment and complexities. This evaluation and selection process should be properly directed […]
The Need for Person Independence in Software Project Management
The Perils of Person Dependence Imagine you are a project manager of a software project and are managing multiple resources. If by chance, one of your employees has an emergency (personal or otherwise) and has to take leave suddenly, your first priority should be to ensure that the employee gets time off and next, you […]
Users Interface and Users Management in ERP System
Users interface directly impact usability of an ERP system. A properly designed user interface provides proper accessibility to the intended functions of the system and enables execution of transactions. Earlier users accessed the system with dumb terminals (ASCII) which had lot of usability deficiencies and this led to subsequent adoption of Graphical Users Interface (often […]
Step 3A: Choosing the Correct Control Chart (Discrete Data)
If the data type that needs to be charted is discrete, then it must fall between one of binary or count types. As the name suggests in case of binary distribution, there are only two possibilities, success and failure, defective and not defective, whereas in the case of count type distribution there may be more […]
Role of Derivatives in Causing the Global Financial Crisis
The previous articles in the module have discussed how the global financial crisis has been caused due to a combination of factors starting with the collapse of the housing market in the US and then due to the integration of the global economy rapidly spread to other parts of the world. An aspect that was […]
Sigma or standard deviation is a statistical measure of dispersion in data. It is a measure which uses the characteristic of past data to make judgements about how the process will perform in the future. If a given set of data has normal probability distribution then the number of defects that will occur in the process over a period of time can be known depending upon the sigma level of the process.
The sigma (standard deviation) is multiplied with the numbers 1, 2, 3 etc to come up with a range. For example lets assume that the average of a data set is 10, while the sigma is 2. Hence 1 sigma will include all the data points between 10 +/-2 i.e. between 8 and 12. A 2 sigma measure would include 10+/-2(2) i.e. all data points between 6 and 14. So on and so forth.
However, it is a known fact that in a normal distribution the points tend to be around the mean. Therefore all the points will be closer to the average. Hence as one goes to farther and farther sigma levels the additional gains in terms of productivity are less.
To be a six sigma organization, the processes of an organization must be able to support this kind of efficiency sustainably. Building such robust processes requires a lot of intelligence and effort.
| Sigma Level | Defects/Million | Percentage Defects |
| 1 | 691462 | 69% |
| 2 | 308538 | 31% |
| 3 | 66807 | 6.7% |
| 4 | 6210 | 0.62% |
| 5 | 233 | 0.023% |
| 6 | 3.4 | 0.00034% |
| 7 | 0.019 | 0.0000019% |
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The Cost of Poorly Performing Processes – Need for Six Sigma
February 12, 2025
