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defects and defectives, ppm (parts per million)
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  #1  
Old 18th September 2007, 10:17 AM
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Please Help! How do you decide what is an acceptable Internal and External PPM number?

How do you decide what an acceptable PPM number is for external and internal PPM?

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Old 18th September 2007, 10:28 AM
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Re: Ppm

This is difficult to answer and cannot be answered without knowing more information. Industry type and what you make. Also it should include top management's input. You may be able to acheive 0 ppm but doing such cause productivity to be so low there cannot be any profit. Also, some products inherently have a high internal rejection rate but the customer needs / wants it enough to justify the high scrap rate. Example: My company made a hardfacing powder used primarily by oil drilling companies to increase the life of their couplings therefore reducing their downtime of changing couplings. We could not make the product very effectivey with our process there was about a 50-60% internal rejection rate because the high Ni powder was hard to atomize, hard to mill (reduce size) therefore the larger particles were screened out and scrapped. The customers wanted the product enough to pay for the extra scrap rates so we made it.

In a normal situation it would be very low and usually automotive customers will not tolerate any PPM's. They want zero. They even want zero internal and will frequently work with you to get internal rejections down. This reduces their costs as well in theory because there is less risk of them getting a nonconforming product and you should decrease your costs.
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Old 18th September 2007, 11:56 AM
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Re: How do you decide what is acceptable internal or external PPM number?

There is no simple answer to this question, except that an acceptable external PPM number should be determined by your customer. Ideally as part of the "determination of requirements related to the product", your customer should identify what their requirements are. I assume in your case that your customer has not told you what they expect. You could try asking but depending on the industry segment you are in, your answer is likely to be zero ppm or else not specified.
In the circumstances where your customer does not specify external ppm, they are not likely to set an internal ppm target either. In which case it is up to you to determine a suitable target based on what you know to be the capability of the product/process or the financial consequences of making defect parts. An ISO/TS certified company would be expected to measure, analyse and improve both their internal and external ppm.
I am reminded of an old story where an electronics company asked for 100ppm from a Japanese supplier. The Japanese supplier asked to which address they wanted the defective parts (100 ppm) to be delivered to.
Thanks to Kevin McG for your informative Post and/or Attachment!
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Old 18th September 2007, 06:22 PM
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Re: How do you decide what is acceptable internal or external PPM number?

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In Reply to Parent Post by plastic View Post

How do you decide what an acceptable PPM number is for external and internal PPM?
Hello plastic,

Interesting question... Just for the "heck of it" I did a Google search on:
  • "100 ppm quality performance"
  • "0 ppm quality performance"
I found some of the "hits" very interesting. Want to try it?

Stijloor.
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Old 18th September 2007, 07:34 PM
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Re: How do you decide what is acceptable internal or external PPM number?

Great Question.

I believe that your goal should be reduced by 50% year over year with the ultimate goal of 0 ppm.

Your PPM also depends on the type of product that you are making. For example for machining type operations 0 ppm is achievable (back in 1997-1999, my company was at 0ppm for about 24 months supplying both Ford and Chrysler). For companies that make appearance items, it is a lot more difficult. Subjectivity in criteria such as color harmony and gloss is all over.

Another issue is how does your customer handle rejects. Some companies (Honda for example) every reject is written up as an HTR and counts against your PPM. Other OEMs can be more lenient based on your relationship and how fast you respond to concerns.

For internal PPM it is more complex, all depending on your operations, technology, experience of employees and available resources to reduce ppm. Internal PPM should be no more than 10x higher than your external ppm.

A good rule of thumb is to reduced by 50% every year. (more aggressive is OK).

In general to drive PPM down to close to 0, you must have or create a problem solving culture where everyone understands root cause analysis (prefer 5 Why analysis with concise problem statement, combined with review by experienced problem solver) and know how to fix issues at a reasonable cost using poke yoke (yes, do not need an $100,000 vision system to fix it).

New launches should be included in your PPM calculations from the first day of production. To keep your PPM low during a launch, consider processes like GM GP-12 or similar and use the data to address the issues found during your GP-12 activities.

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Old 18th September 2007, 07:55 PM
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Let Me Help You Re: How do you decide what is acceptable internal or external PPM number?

We may benchmark in the Six Sigma approach industry to set the PPM goal.

Sigma DPMO Capability
6 3.4 World class
5 230
4 6200 Industrial Average
3 67,000
2 310,000 Noncompetitive
1 700,000

For me the important is the actions after the planning.

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Thanks to Yew Jin for your informative Post and/or Attachment!
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Old 19th September 2007, 11:21 AM
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Re: How do you decide what is acceptable internal or external PPM number?

Quote:
In Reply to Parent Post by Yew Jin View Post

We may benchmark in the Six Sigma approach industry to set the PPM goal.

Sigma DPMO Capability
6 3.4 World class
5 230
4 6200 Industrial Average
3 67,000
2 310,000 Noncompetitive
1 700,000
Do you have actual data to support your contention that 6200 "DPMO" is the "Industrial Average," or that 310,000 is "noncompetitive"? What does "World class" mean?

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Old 19th September 2007, 11:41 AM
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Re: How do you decide what is acceptable internal or external PPM number?

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In Reply to Parent Post by Jim Wynne View Post

Do you have actual data to support your contention that 6200 "DPMO" is the "Industrial Average," or that 310,000 is "noncompetitive"? What does "World class" mean?
This may not provide the complete answer. At least there are some statistics to look at.

Stijloor.
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