Elsmar Cove Forum Header Graphic The Elsmar Cove Wiki More Free Files The Elsmar Cove Forums Discussion Thread Index Post Attachments Listing Failure Modes Services and Solutions to Problems Elsmar cove Forums Main Page Elsmar Cove Home Page
Miner's MSA (Measurement Systems Analysis) Blog 
Go Back   The Elsmar Cove Forum > Common Quality Assurance Processes and Tools > Supplier Quality Assurance and other Supplier Issues
Forum Username

Wooden Line

How to calculate supplier (vendor) PPM?

Wooden Line
Search the Elsmar Cove
Search Elsmar
Monitor the Elsmar Forum
Follow Marc & Elsmar
Elsmar Cove Forum RSS Feed  Marc Smith's Google+ Page  Marc Smith's Linked In Page   Marc Smith's Elsmar Cove YouTube Page  Marc Smith's Facebook Page  Elsmar Cove Twitter Feed
Elsmar Cove Groups
Elsmar Cove Google+ Group  Elsmar Cove LinkedIn Group  Elsmar Cove Facebook Group
Donate and $ Contributor Forum Access
Courtesy Quick Links

Links that Elsmar Cove visitors will find useful in your quest for knowledge:

Howard's
International Quality Services
Marcelo Antunes'
SQR Consulting
Bob Doering's
Correct SPC - Precision Machining

NIST's Engineering Statistics Handbook
IRCA - International Register of Certified Auditors
SAE - Society of Automotive Engineers
Quality Digest Portal
IEST - Institute of Environmental Sciences and Technology
ASQ - American Society for Quality
Reply
 
Thread Tools Search this Thread Rate Thread Content Display Modes
  #1  
Old 15th May 2006, 08:33 AM
m2kulkarni

 
 
Posts: 2
Question How to calculate supplier (vendor) PPM?

Hello!
This is my first post.I have first checked that this has not been answered before but if it has, please excuse me.

We are going in for a software powered solution for our company's functions. I need a to know how to calculate a vendor's PPM. This is further required to determine his rating. We have a few other criteria for the rating apart from the PPM for the period. (such as end customer issues, delivery etc)

1) I believe that correct PPM can be calculated when the lot is 100% inspected. We are accepting the lots after sample inspection. So, if the lot is accepted, even if it contains a few defective items, the PPM will be zero.
2) If after the lot is rejected after sample inspection, the PPM for that instance will be 1000000 even when the majority of the items will be OK.
3) What when there is further rejection of vendor supplied items on our assembly line.
4) What when after case#3 above, we re-inspect the stock (our inventory) and partially accept/reject the quantity.
5) Remember, I am going to map all this to the new software program.

Can sombody help?

Sponsored Links
  #2  
Old 15th May 2006, 09:34 AM
Jim Wynne's Avatar
Jim Wynne

 
 
Posts: 14,077
Quote:
In Reply to Parent Post by m2kulkarni

Hello!
This is my first post.I have first checked that this has not been answered before but if it has, please excuse me.

We are going in for a software powered solution for our company's functions. I need a to know how to calculate a vendor's PPM. This is further required to determine his rating. We have a few other criteria for the rating apart from the PPM for the period. (such as end customer issues, delivery etc)

1) I believe that correct PPM can be calculated when the lot is 100% inspected. We are accepting the lots after sample inspection. So, if the lot is accepted, even if it contains a few defective items, the PPM will be zero.
2) If after the lot is rejected after sample inspection, the PPM for that instance will be 1000000 even when the majority of the items will be OK.
3) What when there is further rejection of vendor supplied items on our assembly line.
4) What when after case#3 above, we re-inspect the stock (our inventory) and partially accept/reject the quantity.
5) Remember, I am going to map all this to the new software program.

Can sombody help?
You've listed most of the reasons that PPM as a measure of supplier performance doesn't make sense. It represents an attempt to oversimplify what you've already found is a complex issue. Some of the issues your questions raise:
  • Sampling inspection: if you reject a lot based on sampling, what happens then? Is the lot returned to the supplier? Is it sorted in your building? If the former is true, you have no way of knowing for sure how many defective parts are in the lot, so you're better off just counting lots received vs. lots accepted. If the latter is true, then you're closer to knowing how many defectives there are (100% inspection isn't always 100% effective), but how do you know that the PPM ratio will hold up over the course of many received lots? If PPM isn't internally meaningful (i.e., you don't expect to ever receive a million of the thing in question), why PPM? Because everyone else is doing it?
  • Your #3 indicates that there might be issues with your sampling, and also reinforces the idea that inspection isn't foolproof.
  • How do PPM ratings contribute to improvement of suppliers' processes? How do you know that improved PPM levels aren't the result of increased sorting by the supplier?
Sponsored Links

  #3  
Old 16th May 2006, 10:39 PM
ganglai

 
 
Posts: 30
Agree, if there is no sorting after a lot is rejected, it is better to go with lot rejected vs. lot received.

Quote:
In Reply to Parent Post by Jim Wynne

How do PPM ratings contribute to improvement of suppliers' processes? How do you know that improved PPM levels aren't the result of increased sorting by the supplier?]
If supplier has introduced a new tech in inspection increasing the posibility of detection of certain defect, I think that also an improvenment. Just my thought.

Last edited by ganglai; 16th May 2006 at 10:41 PM.
  #4  
Old 28th June 2006, 04:38 PM
MikeP

 
 
Posts: 4
Re: How to calculate vendor (supplier) PPM?

Here is how we do it.
For defects found at receiving inspection it depends on the disposition:
Disposition of Accept Lot = 1 PPM
Disposition of Sort = Actual quantity found from sorting
Return to supplier = Quantity against PPM is based on the calculated number defective in the lot from the receiving inspeciton sample. We give the supplier the opportunity to adjust this quantity based on their sorting results.

For defects found in-process:
The actual number of defects found is counted against PPM

If it is a labeling or identificatoin type of nonconformace then we usually count them as 1.

An important axpect of calculating supplier PPM is to stay consistent and measure it the same with all suppliers. I also believe that the number of notifications to a supplier as well as the number of repeat ocurrences is another excellent meausure of supplier performace when used in conjucnction with PPM.

Mike
  #5  
Old 28th June 2006, 06:01 PM
qcman

 
 
Posts: 151
Re: How to calculate vendor (supplier) PPM?

A few customers hold me to ppm's but not too many.I do not use them against my suppliers because most are local and I'm on the phone with them as soon as rejects are found.I have found requiring them to come sort in house has reduce the amount of rejects in the first place do to the inconvenience it causes them.
  #6  
Old 28th June 2006, 07:24 PM
vanputten's Avatar
vanputten

 
 
Posts: 1,068
Re: How to calculate vendor (supplier) PPM?

You are mixing number of defective parts with the number of lots. either count lots or parts or defects but do not mix the unit of measure.

There is a thread called "Measuring Customer Complaints in PPM - How does your company define PPM?" that you should check out.

There is an Electronics Industry Association (EIA) standard for measuring PPM. EIA-554.

What parts per million? Lots Defective Per Million? Detected defects per Million Opportunities? Defective Parts Per Million?

"PPM" is simply a ratio.

What you are measuring = Total if you there were a million
Total Possible to measure One Million

PPM stands for Parts Per Million. What kind of parts? Good? Bad? With one defect? With multiple defects? DPPM before inspection? After inspection? Before test? After test? Internal? At one customer? At all customers?

PPM only defines a ratio of how many occurrences there have been if there were a million opportunities. But occurences of what?

I think most speak of DPPM. D = a part with at least one defect. PPM by itself is simply a ratio. We need to define what it is that we want to count per million.

If people believe there is only one way to count "PPM", and that everyone counts it the same, you are kidding yourself.

Defective parts per million? Defects per million opportunities? Defects and defective parts are different things. And at what stage in the process?

Where one measures this can make a huge difference. If someone is trying to convince you of there product performance with an internal "PPM" measure, we need to know from where in the process they have taken the measure. For example, a DPPM measure might be dramtically different before or after a 100% electrical test for electical parts.

When discussing particles suspended in a fluid, we could measure those "parts" in different ways - size, mass, density, weight, or any other characteristic.

What is it that is being counted and where in the process?

PPM by itself only indicates a ratio. It doesn't tell you anything more than that. What per a million, where, how measured, how was the data collected?

Regards,

Dirk
  #7  
Old 12th March 2007, 04:12 AM
m2kulkarni

 
 
Posts: 2
Re: How to calculate vendor (supplier) PPM?

Thanks to all the Gurus who have responded to my query. I have learned a lot from your replies.I regret my late response.

The vendor PPM is mainly calculated to 'rate' the vendors and also to use those PPM numbers for further improvements. The Supplier Quality Assurance department in my company uses these figures for their performance related moving charts.

Also, these numbers rate the defect because higher the PPM, more efforts are put in to bring down the PPM number.

As I am involved in implementing an ERP system which calculates the PPM based on the formulas that I feed it; I am supposed to freeze the method of calculation, which I have done as per the Quality department's directives.

The only loopholes that remain are academic by nature; just see whether you can help me here.

e.g. If supplier supplies a lot in January and rejection occures in February; what should be the PPM for Jan and Feb? (the system adds all the receipts in one month and stores it as the supply of that month, the rejection of one month is added up to calculate the rejection for one month)

In my testing the system told me:
Supply for Jan=X, rejection=0, PPM=0
Supply for Feb=0, rejection=Y, PPM=0
  #8  
Old 12th March 2007, 07:47 AM
potdar

 
 
Posts: 508
Re: How to calculate vendor (supplier) PPM?

My simple suggestion. If you are in the decision maker's chair, reject ppm as a measure of incoming quality because this ratio (as understood) does not really convey the performance or the reliability of your supplier. Ppm serves well as a measure of the supplier's process control - not as a measure of his outgoing (your incoming) quality.

I will clarify at the risk of sounding too basic. The supplier uses a process for making the parts to be shipped to you. This process has an inbuilt variability. So it is going to make certain parts that are defective and lie ouside your specified limits. Ppm defective is an excellent measure for measuring the possibility of such parts being produced.

It is quite possible that your supplier's process is hopelessly out of control and produces say 70% (not ppm) rejects. He inspects them, segragates them, reworks them, reinspects them, ... and finaly ships them to you. Now you find say 1 part defective in a lot of 1 million. Can you really assign a very god rating based on these results to him? Not really I would say. What is the guarantee that the next lot would maintain the same quality?

So if at all you would like to use a ppm measure, you should go to the process capability level. Working at the incoming inspection stage a simple accepted quantity / received quantity ratio is considered sufficient. Normaly this gets represented as a fraction or as a %.
Reply

Lower Navigation Bar
Go Back   The Elsmar Cove Forum > Common Quality Assurance Processes and Tools > Supplier Quality Assurance and other Supplier Issues

Do you find this discussion thread helpful and informational?


Bookmarks


Visitors Currently Viewing this Thread: 1 (0 Registered Visitors (Members) and 1 Unregistered Guest Visitors)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Forum Search
Display Modes Rate Thread Content
Rate Thread Content:

Forum Posting Settings
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off


Similar Discussion Threads
Discussion Thread Title Thread Starter Forum Replies Last Post or Poll Vote
Calculating PPM - Standard practice to calculate PPM from parts returned? Dawn Statistical Analysis Tools, Techniques and SPC 25 10th January 2011 07:56 AM
Approved Vendor (Supplier) List contain Vendor Evaluation? rlsavard Supplier Quality Assurance and other Supplier Issues 6 18th January 2010 11:27 PM
Calculate DPPM/PPM for second yield rework Charlie H Quality Tools, Improvement and Analysis 1 7th October 2008 10:11 AM
How to calculate supplier PPM with multiple units vallesj Supplier Quality Assurance and other Supplier Issues 9 3rd September 2008 09:03 AM
Supplier Disruption vs. PPM - Is PPM an overrated quality measurement? Steve Watkins Supplier Quality Assurance and other Supplier Issues 5 29th January 2007 11:26 AM



The time now is 11:21 AM. All times are GMT -4.
Your time zone can be changed in your UserCP --> Options.


   


Marc Timothy Smith - Elsmar.com
8466 LeSourdsville-West Chester Road, Olde West Chester, Ohio 45069-1929
513 341-6272
NOTE: This forum uses "cookies".