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I need a way to measure PPM that will provide a useful tool for benchmarking

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  Post Number #1  
Old 17th October 2000, 01:42 PM

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Let Me Help You I need a way to measure PPM that will provide a useful tool for benchmarking

Im looking for replies to help our organization define the best way to measure PPM that will provide a useful tool for benchmarking, trend, and management review purposes. Please provide your answer to the following question:

1,000,000 parts are shipped during the period and assume all situations are shipped during the period.

Situation 1: 20,000 are returned because upon incoming inspection by the customer it was determined that 50% of the parts were out of specification due to a undersized diameter (cavity 1 and 2 of a 4 cavity mold). All 20,000 parts are returned cavity 1 and 2 are sorted and scrapped, the remaining 10,000 are re-shipped to the customer.

Situation 2: 20,000 parts are returned from the customer because two different parts were mixed together. All parts are returned, sorted in-house, and then re-shipped to the customer.

Situation 3: 20,000 parts are returned from the customer because the wrong label was on the parts. Upon return, the correct label was affixed and the parts were re-shipped to the customer.

Situation 4: 20,000 parts are shipped to the customer, found to exhibit non-conforming parting line flash but deviated and used as is by the customer. Corrective action is requested.

Situation 5: 20,000 parts are shipped to the customer and found to me manufactured with degregated material. Parts were scrapped at the customer and credit was issued to their account.


Additionally, if anyone knows where reference material may be available, please provide.

Thanks to everyone taking the time to review and respond!

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  Post Number #2  
Old 17th October 2000, 02:51 PM
Al Dyer

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I see your point as I replied in your email. If this is taken as an ongoing situation and not 5 individual scenarios I believe the total parts shipped as 1,050,000 and the total parts rejected as 100,000 which I believe is a PPM of 95,230.

Any help?


Your PPM would be 20,000. PPM does not consider sort and rework activities. Maybe not fair but hopefully consistant.

I base this comment on working with the Automotive industry which is not always known for consistancy.


Al Dyer
Mngt. Rep.
JAE Tech Inc.

[This message has been edited by Al Dyer (edited 17 October 2000).]
  Post Number #3  
Old 17th October 2000, 03:41 PM
John C

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With 70k plus rejects out of 1M shipped, and given the pattern of the fallout, you can stop worrying about ppm alltogether for a while. What you need now is to stop counting and start watching, so as to sort out your process problems. Even when you have done this, keep in mind the old saying; 'You can't fatten a pig by weighing it'.
rgds, John C
  Post Number #4  
Old 18th October 2000, 07:55 AM

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Al, you said,
Originally posted by Al Dyer:
Your PPM would be 20,000. PPM does not consider sort and rework activities.
By rework, do you mean GSHENK's situation number 5, where the customer gave a deviation and used 'as is'?

I don't think that situation 3 should be considered rework. The label may be an integral part of the product.

For instance, in my line, a product without a UL label is automatically rejected, by our customer, local inspectors, etc. Without the label the liability of the product shoots though the roof, and many insurance companies won't pay claims on fires caused by unlabelled products.

We can't just send a label out to be affixed without also sending a UL inspector. The part has to be returned as a reject.

Secondly, situation 1 resulted in 10,000 parts scrapped and situation 5 resulted in 20,000 parts scrapped, for a total of 30,000 out of a lot of 1,000,000. Wouldn't the ppm, ignoring situation 3, be 30,000?

(Haven't had to deal with ppm myself, so put up with my questions.)

  Post Number #5  
Old 18th October 2000, 09:24 AM

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You shipped one million parts to your customer, he returned 100,000 defective parts. From your customer's viewpoint this is 100,000 PPM defective. Which is probably not acceptable.
Whatever you do internally to color the results will not change the view of the customer.
In my dealings with DaimlerChrysler, the cutoff point for an acceptable supplier (quality) is 50PPM.
  Post Number #6  
Old 18th October 2000, 10:10 AM
Al Dyer

Total Posts: n/a


This is a difficult situation to follow considering the variables.

1:Through all 5 situations how many total parts have been shipped to the customer.

2: If I read the situation correctly there were 100,000 parts shipped with some type of nonconformance.

3: In situations 4 and 5 are the 40,000 parts shipped on top of the original 1,000,000 shipped? By re-shipping the nonconforming parts we are adding to the original shipment of 1,000,000.

No matter what type of nonconformance or deviation, the 100,000 nonconforming parts are added to the overall PPM.

Maybe GSCHENK could clear it up. We need to know the total number of product shipped (from shippers?) versus the total number of nonconformances reported by the customer (C/A Reports).

I do agree that if PPM's are where they are there is a systemic problem that needs to be addressed.


  Post Number #7  
Old 18th October 2000, 11:29 AM

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For the information of everyone, the situations I presented are examples in an attempt to define a protocol for measuring.

The total parts shipped during the period is 1,000,000 plus the re-shipment of 10,000 from situation 1, 20,000 from situation 2, and 20,000 from shipment 3.

Thanks for the info thus far!
  Post Number #8  
Old 19th October 2000, 12:18 AM

Total Posts: n/a
In response to an E-mail to GSCHENK:

Yes, I would still consider situation #4, the parts were identified by the customer as nonconforming. Even in situation #1 20000 returned 10000 defective, from the viewpoint of the customer it was 20000 defective.
Yes, I guessed that you were providing examples of different situations that occur from time to time, that's why I did not elaborate on the defect rate.
I do not know of any examples that provide direction on the use of PPM. I do know that if it is not used properly it can create havoc, both internally and with your customer.
Daimlerchrysler rates their supplier's using the PPM criteria; Max 50PPM for an acceptable rating. As an example we recently hit 83PPM, 2 parts defective out of 24000. The only way to improve is to ship additional quantities with no defects. We will not make it with only two months left in the year.
Improvement of PPM is based entirely on quantity. If you ship small quantities it will hurt you, if you ship large quantities it will either help you or hurt you depending on the quantity of defective product.
IMO, be careful when setting rules for PPM, get buy-in from others in your company. Establish goals to show improvement,i.e, if your present PPM is 2700PPM set a goal 1350 PPM to be met within a year. Lower the goal on successive years.
Hope this helps.


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