Six Sigma is a way to improve processes across the board by restructuring the organization from the top down. As a Six Sigma business strategy to increase profitability, it helps reduce errors throughout processes to where there are no more than 3.4 defects per million events. Six Sigma streamlines standard methods of practices to make an efficient whole.
One of the major components of Six Sigma is adding tolerances. A tolerance range takes into account the difference between the upper and lower limits of a specified range. In Six Sigma, tolerances can help you improve both the design and manufacturing of products.
Six Sigma is measured in defects per million or the number of defects divided by the number of opportunities available. This number is "normalized" to one million. A defect is anything that doesn't conform to standards.
Tolerances are a requirement in both product and process development. Tolerances allow for easier assembly of products and reducing errors during processes. Tolerances must be tightly monitored. If your tolerance specifications are too rigid, you may get great product/process results, but the costs may be a impediment.
If your tolerance specifications are not tight enough, your production standards will drop. Plus, you'll probably being doing a lot of reworks. Tolerance specifications should fall somewhere in the middle of these two extremes.
There are two standard methods in determining toleration specifications: the conventional method and the loss function method. The conventional method is built upon the specifications being designed by a project manager based on his experiences and perception. The overall cost of shoddy work influences the loss function method. It really doesn't matter which method you use; just continually use the same process.
If you decide to use the loss function method, past errors become very important. But, let's say that there's no past data to base your calculations on. You can use the Taguchi Method Tolerance Design to get an idea of change rates. It helps you approximate both the parameters and the coefficients. The loss method really relies on the project manager to understand his organization and variations. This method forces you to continually improve your processes.
The goal of Six Sigma is the strive for statistically zero errors in your projects, production line, processes. Tolerances set the stage for this by establishing the upper and lower specification boundaries. When implementing six sigma, don't forget to add the tolerance specifications.
For more information about calculating the loss function method, visit the Project Management Media Gallery. You can also check out 10 Six Sigma Templates You Can Download.