Six Sigma Z Score - How To Calculate & Why Use?
Six Sigma is a popular model used by businesses in order to improve practices through the refinement of processes and the minimisation of errors and variance. Your Six Sigma level – or Z Score - is defined as the number of standard deviations that can fit between the average and most extreme results found in any given process.
Implemented properly across an entire company, Sigma Six can help businesses to save money, make money as well as making staff more connected and valued as they contribute to the business’ overall objectives. Proper training from a Six Sigma expert can help businesses to succeed with Six Sigma initiatives.
What is a Six Sigma Z Score?
Calculating a Z Score
When calculating a Z Score, it is essential to familiarise yourself with all of the key words involved:
- Z Score - Indicates how likely errors are within a system
- Mean - The average results within a given process
- Specified Limit - The upper or lower outlying limit to a process, outcomes close to these limits will have the most variance and a higher likelihood of errors
- Standard Deviation - A statistical measure of variance
A Z Score indicates the likelihood of errors within a system, or more accurately, it shows how many standard deviations can fit between the average results of a process and its specified limit.
To calculate your Z Score, the following formula is used:
This shows that to calculate Z (Z Score), you must subtract the mean process result (x̄) from the specified limit (SL) and then divide this number by the standard deviation (σ).
What is a Z Score?
As mentioned above, your Z Score indicates how likely errors are within a process
Essentially, a higher Z Score means there are more standard deviations within the defined limits and that the average results are further away from the outlying limit. This means that the majority of results - or output variables - are less likely to contain errors.
A lower Z Score means fewer standard deviations fit between the average and the specified limits, which means a greater amount of variance between results.
Variance within a system is bad because it means the quality of products and services can fluctuate, which results in lower customer satisfaction, business efficiency and productivity.
A Six Sigma Z score is particularly useful when implementing a Six Sigma project as it helps enterprises make comparisons during the Measure (M) and Control (C) phases of the DMAIC refinement process. Using these comparisons against an existing baseline can highlight where improvements could be made.
Why Use Six Sigma Z Scores
Using Six Sigma Z scores allows a company to monitor the quality and effectiveness of its output, therefore enabling them to work out solutions for providing the best possible quality products to its clients and customers.
Whilst its initial objective was to reduce the number of defects in a process, Six Sigma can also be applied to a range of business types in order to maximise productivity and results of all areas of a business. This is why companies considering using Six Sigma should roll it out across the company as a whole, for more streamline operation and to give all staff the confidence in its usage.
Ideally, the objective of Six Sigma will be to reduce losses caused by poor processes and poor working practices and deliver products and services of the highest quality to customers and clients. Both of these objectives will put a business in a better position financially as well as creating a better working environment.
Using a Six Sigma Z score can have many benefits for your business, but without proper training, it’s likely that the methods will be used ineffectively and can cost your business time and money rather than helping it to gain.
Get your business off the to the right start by hiring Six Sigma training providers to train your staff on all of the best practices and help make sure they are used effectively across your organisation. Fill out the form at the top of the page with your details and Expert Market will bring you a tailored search for your unique Six Sigma training needs.
Maximising your Z Score should be essential for any business worth its salt.
With the right training, your team could use Six Sigma methods to improve the way your business works, boosting efficiency and profits.
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