Page 244 - The Six Sigma Project Planner

Normalized Yield and Sigma Level
To compute the normalized yield, which is a kind of average, for an N-process or N-
product department or organization, use the following equation:

( DPMO 1 DPMO 2 ... DPMO n
Normalized Yield = 1- 1,000,000) ( 1,000,000) ( 1,000,000)
x
1-
1-

(Equation 2)

For example, consider a four-process organization with the following DPMO levels for
each process:

Process DPMO DPMO/1,000,000 1-(DPMO/1,000,000)
Billing 5,000 0.005000 0.9950000
Shipping 15,000 0.015000 0.9850000

Manufacturing 1,000 0.001000 0.9990000
Receiving 50 0.000050 0.9999500

4
Normalized Yield = 0.995 x 0.985 x 0.999 x 0.99995 = 0.99472

The figure below shows the Excel spreadsheet for this example.

Figure 49. Excel Spreadsheet for Calculating Normalized Yield

Normalized yield

The sigma-level equivalent of this four-process organization’s normalized yield is 4.1.
This would be the estimated “organization” sigma level. Normalized yield should be
considered a handy accounting device for measuring overall system quality. Because it
is a type of average, it is not necessarily indicative of any particular product or process

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