Measuring Customer Complaints in PPM - How does your company define PPM?

[wslabey]

How does your company's define PPM? I have a supplier who defines it as customer complaints divided by annual production volumes. A complaint is any communication from the customer where the customer is dissatisfied. It could be for one part that the customer is complaining about or a 100 parts. The complaint is only counted once. How does that definition compare to yours? For example,
180 complaints per year from the customers / 72,000 parts produced per year = 2500 ppm.

What bothers me about this supplier's definition is that major problem with defective batch is treated the same as a part in a batch that is defective.

[The Taz!]

PPM = PARTS Per Million. . . Period . . . Not Complaints Per Million Parts.

Sounds like someone not too versed in Quality Measures ( ) decided to make up a neat measure with their thumb print on it. Perhaps, for their modus operendi, this IS a meaningful measure.

This index (PPM) is a normalizing index that gives a common base of reference for all players. Change the components, and you change the frame of reference and meaning of the equation.

(Discrepent Parts/Total Parts) x 1,000,000

Per TS, your supplier is required to communicate by a means that is either your call or one agreed upon between you and the supplier.

IMHO, in this case, they can measure whatever they want for their internal purposes, but I think you have the say as to whether they reports to you in real PPM or another index.

Hope this is of help.

[wslabey]

Originally Posted by The Taz!

PPM = PARTS Per Million. . . Period . . . Not Complaints Per Million Parts.

Sounds like someone not too versed in Quality Measures ( ) decided to make up a neat measure with their thumb print on it. Perhaps, for their modus operendi, this IS a meaningful measure.

This index (PPM) is a normalizing index that gives a common base of reference for all players. Change the components, and you change the frame of reference and meaning of the equation.

(Discrepent Parts/Total Parts) x 1,000,000

Per TS, your supplier is required to communicate by a means that is either your call or one agreed upon between you and the supplier.

IMHO, in this case, they can measure whatever they want for their internal purposes, but I think you have the say as to whether they reports to you in real PPM or another index.

Hope this is of help.

Thanks. I was scratching my head as well when I heard the answer to how they measured PPM. It is a new measure -- CPM (complaints per million) I already put in a follow up phone call with the supplier regarding this and some other issues.

[Wes Bucey]

Originally Posted by wslabey

Thanks. I was scratching my head as well when I heard the answer to how they measured PPM. It is a new measure -- CPM (complaints per million) I already put in a follow up phone call with the supplier regarding this and some other issues.

Appropos "creative definitions"
We were once the "supplier dictated by the customer" for a proprietary "black box" subassembly sent to his contract assembler. We had a screwup in that the end customer gave us an erroneous address for "ship to."

Within 2 hours of the promised delivery time, the assembler's VP of manufacturing was on the phone to my shipping clerk, saying, "We've filed a GRIEF with [end customer] about your failure to deliver."

I sent the vp a fax of the customer's purchase order showing the erroneous address and a copy of UPS's message saying they would have the package on his dock by the close of business the same day. His response:
"We've filed another GRIEF with [end customer] because you didn't complete and return a proper GRIEF form."

Turns out we learned two things that day:

1. A GRIEF is non-ISO, non-ASQ term for "corrective action request" created by some clever guy at this assembler because "they give me grief"
2. The assembler was looking to make us look bad because he made a competing product that was passed over by the end customer in favor of ours (hence the GRIEF for not completing a proper GRIEF form we still have not seen two years later)

[Bill Ryan]

I'm with Taz (and your inclination that something wasn't right). Your supplier is, more than likely, woefully understating their PPM value.

Originally Posted by The Taz!

Perhaps, for their modus operendi, this IS a meaningful measure.

I haven't been able to see where the ratio presented could give any meaningful information. Perhaps if it were "No. of customer complaints/No. of customer orders" ????

Bill

[The Taz!]

The measure Bill stated is also a valid measure for internal use. . . and could be overly severe. Say you had four equal volume orders and one was rejected. . . that's a 25% failure rate. . . or 250,000 PPM (sorta). Not World Class by any means.

IMHO, the PPM normalized index is universally (almost) accepted and meaningful because it gives a rate of rejection of "product". . .not orders or complaints. It is also the index used by all of the big guys (Big 3).

I have been in the customer/competitor business before and it is . . .for lack of a better word, "interesting" to say the least. Took 2 years of solid work (and travel) to smooth waters and create a working relationship by yours truly.

Understanding customers' needs is key. They don't always know what they really want or need. But they ARE the customer. Help them, and you help yourself. (The same can be said for Bosses. . )

[wslabey]

Thanks for expanding on the topic, but the message seems to be more about how people interpret or define a concept. I have scheduled an all day on site visit with the supplier to review their process and documentation to get a better understanding of how they operate. By the way, this supplier is not a problem but we are in the initial phases of launching a new product line of which their components are key.

With regard to varied definitions of what is thought to be common universal concept is not always as universal as we think. We all have our defintiions. It is good to get an operational definition. For example, I had one supplier that was assembling a component that required four bolts to be installed (two at each end) to complete a fairly straightforward 3 piece assembly. The joints between the parts were adhered and sealed with some very aggressive 3M two-sided tape that made the assembly look like it was bolted together. The bolts were hidden and you could not tell if they were installed unless you looked inside the blow molded part through a very small access hole. Unfortunately, assembling without the bolts was a Hazard without Warning if the parts separated under load. My supplier said they had inspection in place to prevent this. This was a human operation and the person doing the assembly was self-inspecting. Unfortunately the lack of bolts was not easily detected. We had to perform a 100% field inspection to make sure all assemblies that were not bolted together were contained and replaced at our customer location. In hindsight, using my supplier's interpretation of inspection of would have required triple inspection or challenged my designers to error proof the design.

[jmp4429]

Sorry to drag up an old thread, but I just found it during a search for something unrelated.

My understanding from someone I attended a training course with is that Honda calculates PPM as parts per million dollars worth of product. That's real cute, because say your product mix includes one item worth $500,000 (hey, it's for McLaren or something, OK?) and one item worth $1.

Then say for both items, you ship 100% bad parts. For the expensive item, your PPM is 2 and for the cheap item, your PPM is a million.

So, this PPM$ doesn't tell you anything! 2 PPM? That doesn't sound too bad! Never mind the fact that you just sent them $1M worth of bad parts, and probably shut down their line.

Anyway, excuse the rant - can anyone verify this for me or is this an urban quality legend?