How is PPM (Parts Per Million) Calculated?

[valletta]

How are ppm calculated in the automotive industry?

If a supplier commits to 10ppm, will this be on a per delivery bases, monthly, 3 monthly, yearly bases or on on total quantity supplied vs qty defective. I ask because customers immediately expect that we sort all stock when they find even one reject, because this will be over 10 ppm vs the delivery, but below when compared to total quantity delivered.

 

[Marc]

For starters, see:

ppm Calculation

and

ppm

 

[Jim Wynne]

How are ppm calculated in the automotive industry?

If a supplier commits to 10ppm, will this be on a per delivery bases, monthly, 3 monthly, yearly bases or on on total quantity supplied vs qty defective. I ask because customers immediately expect that we sort all stock when they find even one reject, because this will be over 10 ppm vs the delivery, but below when compared to total quantity delivered.

There is a wide swath of the OEM community that hasn't figured out that there might be a contradiction between "zero defects" and PPM allowance. In general, arguing this point will get you nowhere. Even if the supplier were to agree that it was incorrect to apply the PPM thing to a single lot, they would still hit you over the head with the zero defects cudgel.

 

[DRAMMAN]

The formula itself is the same for all industries.

(defects/opportunities)*1,000,000.

The question comes into what is considered a defects and what is considered an opportunity. From a supplier quality perspective a typical approach is to call the quantity shipped the "opportunity count" and the number of defects in that sipment is the "defect count". Setting the quality expectation at 10ppm is essentially telling you Zero Defects. It is nto uncommon for large manufacturing companies such as an automotice OEM to have very strict policies regarding inspecting supplier material. A very common policy is if any defects are found that either the company sorts and charges cost back to the supplier or the supplier sends someone to sort.

 

[AMIT BALLAL]

PPM Calculation formula:

(No. of defectives / total produced Or supplied Qty.) * 1000000


This can be calculated on monthly basis, as & when required , Or for part PPM (In order to analyse what is defect occurrence of the part).



Thanks,
Amit