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When to start counting supplier PPM? Supplier Performance Metrics

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Related Topic Tags
ppm (parts per million), qms (quality management system), reject rate, supplier performance, supplier control and monitoring, metrics (measurables such as for objectives)
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  Post Number #1  
Old 28th August 2009, 01:54 AM
jperez25

 
 
Total Posts: 8
Please Help! When to start counting supplier PPM? Supplier Performance Metrics

Hi there. I have a question that I know does not have a black or white answer, but I'm basically looking for any interesting insights.

One of the metrics we use to measure supplier performance is supplier PPM, calculated in the conventional way or reject rate per million.

Now our systems are similar to B3, where we require our suppliers to submit a PPAP before starting production and then we have a further Job#1 date of the new product, which usually happens 3-4 months after our suppliers submit their PSWs. In this period of time we run our pre-production, which are saleable units to the customer.

Our current process is that anything that is rejected in the plant (IQ or in process) is considered in the supplier PPM calculation.

However, there is a question to whether we should only consider rejected parts after the Job1, since the first pre-production lots have a greater risk of quality issues (though supplier PSW should have been signed at this point of time).

Then the question is, considering the following two alternatives, which one is the one that represents more the supplier quality:
1) A metric that includes every rejected part when calculating the reject rate (this could include pre-series, prototypes, etc)?
2) A metric that include rejected parts after a 'stabilization period' of 3-4 months after supplier PSW?

The two options actually measure different things, Any of you see any particular benefit of using either one of the methods?

Javier

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  Post Number #2  
Old 28th August 2009, 08:00 AM
Kales Veggie's Avatar
Kales Veggie

 
 
Total Posts: 1,005
Re: When to start counting supplier PPM?

All rejects. Very simple. Why is it OK for supplier to send in rejects during the first 4 months?

If APQP/FMEA/Control Plan/PPAP/GP12(or similar) are done effectively, why would there be any rejects from your supplier?

A reject is a reject.....same goes for proto-types.
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  Post Number #3  
Old 28th August 2009, 11:28 AM
Jim Wynne's Avatar
Jim Wynne

 
 
Total Posts: 14,142
Re: When to start counting supplier PPM?

Quote:
In Reply to Parent Post by Kales Veggie View Post

All rejects. Very simple. Why is it OK for supplier to send in rejects during the first 4 months?

If APQP/FMEA/Control Plan/PPAP/GP12(or similar) are done effectively, why would there be any rejects from your supplier?

A reject is a reject.....same goes for proto-types.
The reason for rejection is important; sometimes in the prototype or pre-production phase the design is fluid and things get thrown out that aren't necessarily the fault of the supplier. During this period of time, the objective should be design validation, and the less finger-pointing and blame-seeking the better.

As to the OP's question, I don't think that PPM makes any sense at all unless you're actually dealing with millions of things. We ask suppliers to insure that their processes are stable and capable, but both of those things are based on the concept of randomness. If there's (for example) only a chance of 100 in 1,000,000 that any defect will occur, it doesn't mean that 1,000,000 individuals must be created in order to see the 100 defects. This means that if a supplier's PPM rate is 1000 today, it might not be 1000 after a million iterations. The point is that if we can't know what the actual rate might be after a million chances, there's no sense in using estimates that don't take long-term randomness into account.
  Post Number #4  
Old 30th August 2009, 01:29 PM
Kales Veggie's Avatar
Kales Veggie

 
 
Total Posts: 1,005
Re: When to start counting supplier PPM?

Quote:
In Reply to Parent Post by Jim Wynne View Post

The reason for rejection is important; sometimes in the prototype or pre-production phase the design is fluid and things get thrown out that aren't necessarily the fault of the supplier. During this period of time, the objective should be design validation, and the less finger-pointing and blame-seeking the better.

As to the OP's question, I don't think that PPM makes any sense at all unless you're actually dealing with millions of things. We ask suppliers to insure that their processes are stable and capable, but both of those things are based on the concept of randomness. If there's (for example) only a chance of 100 in 1,000,000 that any defect will occur, it doesn't mean that 1,000,000 individuals must be created in order to see the 100 defects. This means that if a supplier's PPM rate is 1000 today, it might not be 1000 after a million iterations. The point is that if we can't know what the actual rate might be after a million chances, there's no sense in using estimates that don't take long-term randomness into account.
Very simple again. Then it is not the fault of the supplier, but engineering or purchasing or whoever.

A supplier reject is a supplier reject.
  Post Number #5  
Old 30th August 2009, 03:29 PM
Jim Wynne's Avatar
Jim Wynne

 
 
Total Posts: 14,142
Re: When to start counting supplier PPM?

Quote:
In Reply to Parent Post by Kales Veggie View Post

Very simple again. Then it is not the fault of the supplier, but engineering or purchasing or whoever.

A supplier reject is a supplier reject.
What you don't seem to understand is that in the early stages, things can be very ambiguous, and move so quickly that it's difficult (and senseless) to try to ascribe blame. What's the point in starting the PPM clock when the product might be substantially different when real production begins? We all know that part of what got the US auto industry in trouble was (is?) their inveterate finger-pointing and blame-seeking. Why encourage it?
Thanks to Jim Wynne for your informative Post and/or Attachment!
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