How to calculate supplier PPM with multiple units

Hey,
How do you calculate DPPM for any supplier that provides you with different type of material, like LB, ft, or pcs... Example

Supplier X
Item 1: 4000Lb
Item 1: 300Oz
Item 2: 200pcs
Item 3: 50 ft

What I normally did was mixing units, until I notice some times we received the same item on Oz and Lb, so I just converted everything to Lb... But now that I am examining more in details the information, I can see that I receive some other items that are measured on ft, or peaces.

How can I calculate a PPM for a supplier like this?

I have the same issue in my plant.

All units of measure are not equal, so I break down my ppm rates by each UOM within the supplier.

Thanks for your answer Rosie! I think is a very simple solution..

However, the complications come when you want to evaluate the supplier as just one supplier... Averaging supplier % of acceptance? Is for example a same problem if we want to know the suppliers PPM for your factory, you can not mix them, but you need to have a target for the total suppliers at your plant... the same you need a single target for your individual supplier.
Regards,
Valles


Rosie wrote:
I have the same issue in my plant.

All units of measure are not equal, so I break down my ppm rates by each UOM within the supplier.

EX:
Suppplier A:

_Receipts UOM 2008 Rejects UOM % Accept ppm_
20,977 ft. 0.77 ft. 99.99% 37
14,712 pcs. 69 pcs. 99.53% 4,690
50,227 lbs. lbs. 100.00% 0

vallesj said:

Hey,
How do you calculate DPPM for any supplier that provides you with different type of material, like LB, ft, or pcs... Example

Supplier X
Item 1: 4000Lb
Item 1: 300Oz
Item 2: 200pcs
Item 3: 50 ft

What I normally did was mixing units, until I notice some times we received the same item on Oz and Lb, so I just converted everything to Lb... But now that I am examining more in details the information, I can see that I receive some other items that are measured on ft, or peaces.

How can I calculate a PPM for a supplier like this?

Click to expand...

You can't, and expect the results to be helpful or reasonable. You need to know the impact that supplier performance has on your business, and you do that by counting money, not counting defective units, and especially not with an artificial yardstick like PPM.

DDPME.... Defective dollar per million expended?

vallesj said:

DDPME.... Defective dollar per million expended?

Click to expand...

Have a look at this current discussion for evidence of the tangled webs that get weaved by using PPM as a cudgel yardstick.

What do you want from your suppliers? If you're like most, you want a conforming product delivered on time at a reasonable price. How does keeping track of PPM levels help you to achieve what you want? It doesn't. It's an arbitrary system that people do because other people do it.

When you have a problem with a supplier, you need to determine its impact. Is it an outlier that's not likely to reoccur? Is it a major "spill" that shuts your line down and causes you to miss your customers' dates? Why should you use the same metric to deal with both circumstances? If you're hurt, you're hurt, and you need to take steps to avoid being hurt in the future. If you're not hurt, relatively speaking, let your supplier know what happened, debit him for the fallout, and get on with your life.

Thanks for your comments and suggestions, I think I got to a point accepted by mybosses:
1. Separate a supplier that provided you with different kind of products, into different categories, so you will have PPM for the LB and PPM for the pieces.

2. Not only PPM represents the pain from the supplier, also how much cost of quality is affecting you.

3. OTD is not considered by the moment.

Coming from this, we will be generating a bubble chart showing as bubbles the different suppliers, well only the top suppliers, with the size of the bubble being the money we pay to them. The Y axis will be PPM, and the X axis will be the Cost of Quality, or the cost we are charging them for every issue.

Jim, any thoughts on how you break the dependency on ppm, when you have a multi-divisional Corp. whose management adores the ppm metric?

Rosie,
I think you can not get away from the PPM, however you can mix it with the other "Company" important metrics. On this case my company is pushing hard on COPQ, so I included on the metric. But is possible that the next time they will push on delivery. The scorecard metric that includes the company most important variables will be the option, however PPM still has to be included somehow, but not as the only deterministic variable. The weight you assign for each variable will need a deep discussion within the company to establish in a way it works well there.

RosieA said:

Jim, any thoughts on how you break the dependency on ppm, when you have a multi-divisional Corp. whose management adores the ppm metric?

Click to expand...

It's not easy, especially if you have customers who use it and expect you to use it too. If it's strictly internal, the only hope you have is to demonstrate that use of PPM may hide important information and cause you to lose focus on what's important--the money.