PPM and not a million parts

I have a question. If you have a supplier that ships to you annually approximately 200 parts a month for a yearly QTY of 1400. How do you calculate PPM? Or should I even be using PPM as measurable for the supplier?

Our company requires all supplier to be less than 50ppm. So of course 1 failure or 2 blows them completely out of the water.

Any help would be great?

Thanks

Here's the formula:

defective parts / shipped parts * 1,000,000

It's just like a percent calculation. "Percent" means "per 100" but technically you don't have to have 100 parts to calculate it.

If they ship one or two bad parts, then PPM does inflate their numbers. The whole point of reporting in DPPM is to show that a few bad parts isn't necessarily all that great.

By requiring <50 PPM You are essentially requiring defect-free product from this supplier. If that's not what you really want, or are willing to pay for, then your organization needs to choose a different goal.

PPM=[(parts failed)/(total parts shipped)]*1,000,000


Really, really gets ugly at low shipment levels...as you will see. 1 bad part out of 1400 is 714 PPM.

We were told by one of our B3(or formerly B3) customers that they expect PPM no more than single digits. Recently we had a 6 month PPM of 1, and a 3 month of "0". We were shipping large volumes. Of course the large volumes have reduced significantly, but we are still in single digit PPMs:

We ship pretty small volumes as well. Recently I started looking at percent of parts returned vs. parts shipped (returns/shipped)x(100). Our target is to be below .5% (or 1/2 of a percent). That comes out to 5 pcs. out of 1,000 as an "unacceptable" score.

IMO, whether or not you should use PPM scores for your suppliers depends on what are you trying to get out of it? In other words, is that the only measure that you value when determining whether or not to use a supplier? I think it better to look at the risk of YOU sending a bad part to your customer as a result of your VENDOR sending a bad part to you. That's not to say don't look at defect rates, just maybe don't make it the sole vendor metric.

Your company states ALL suppliers must be under 50 PPM (or else what..), so you're kinda stuck unless you have some other provisions written into you procedures/instructions. As was said earlier though, if it's not what you want you need to find a way to change it.

Having said that, maybe someone could elaborate on why PPM is the norm and not just percent scores?

Surely there is some good reasoning behind it...

Neil V. said:

Having said that, maybe someone could elaborate on why PPM is the norm and not just percent scores?

Surely there is some good reasoning behind it...

Click to expand...

No, there is no logical reason. I think it was another one of those things that sprang out of Motorola when Six Sigma was being born. Unless you're actually making (or buying) millions of things, it makes no sense on any level.

Neil V. said:

Having said that, maybe someone could elaborate on why PPM is the norm and not just percent scores?

Surely there is some good reasoning behind it...

Click to expand...

Neil,

For the many uninformed, it sounds impressive.

Stijloor.

Ha! Thanks (to both) for the confirmation.

Stijloor said:

For the many uninformed, it sounds impressive.

Click to expand...

That is exactly the point. People would think 1% sounded pretty good. For higher volume manufacturing, such as 250,000 parts per month, that is 2500 parts. No so good. So, they make it 1000 PPM. Ouch...sounds bad. A common target is 40 PPM, or .04%. Some folks can't get their head around that. Sounds insignificant, like chances for rain. PPM was meant to sound bad.

I used to teach a class with 100 points total for the semester. You might have a paper due that is worth 20 points. Is that worth skipping out on a night at the bar? 20 stinking points? By the end of the semester, the students had burned up so many points their grades were trashed. So, I changed the grading system to 1000 points. Now, it is "Hey, I got a 200 point paper due tomorrow, I have to get it done." Grades improved.

I think you can see my point....