In the context of process improvement, what does the term "sigma level" refer to?

The term "sigma level" pertains specifically to the standard of quality and performance metrics in a process improvement context. It indicates how many standard deviations a process's output is from the mean, with the concept stemming from statistical process control.

In practical terms, a higher sigma level signifies fewer defects in a process. For instance, a process operating at a six sigma level ensures that only 3.4 defects occur per million opportunities, which reflects a high level of quality and reliability. This quantitative measure helps organizations understand their process capability and guides efforts to minimize variability and improve quality.

While employee productivity, market competitiveness, and revenue to costs are important business metrics, they do not directly relate to the sigma level or its indication of process quality and performance. Thus, the designation of sigma level focuses exclusively on the measurement of defects and the precision of processes, distinguishing it as a critical concept within Six Sigma methodologies.