Calculating PPM for Customers - Is this fudging PPM #'s?

bpritts said:
especially if they're comparing you to people selling
them transmissions that are 10 PPM. (and they're not sophisticated enough
to realize that a $500 transmission competes in a different playing field
from a $.02 bolt.
I agree, but would like to att a quick note about that one: A faulty $.02 bolt inside a $500 transmission could with the greatest of ease convert said item to $500 of scrap...

/Claes
 
C

CastaDave

Hi Cleverfox,

Just to give you my angle on this, I've recently started at the company I currently work for, and their PPM tracking was awful.

The mentality was that they would only record the PPM if the rejects actually got back to the site. Most of our customers (especially the European ones) would simply scrap the parts at their facility, due to the on-cost of returning them.

We would not then count these as PPM (even if the customer did).

When I started, our recorded PPM figure was 17ppm Year to Date (July 03). This despite the fact that they had Ford Q1 revoked for poor Quality performance, and various other customer's putting them on 'red' status. In their own naivity, the directors were completely unaware, because they believed everything the QM told them.

To stop this problem, I instigated a procedure that I used at my old company on how PPM was recorded, and is as follows:

Anything that the customer Returns or Scraps (i.e. Reject) classes as Reject PPM (RPPM).

Anything that the customer Rejects, but we re-work at their facility classes as Concern PPM (CPPM).

From this data, I then work out the Total PPM (TPPM).

All 3 PPM calculations are placed on a QOS chart, with Pareto's etc. The top 5 biggest concerns are then actioned, and reviewed on a weekly basis at the management meeting.

Our current TPPM figure is 820 (was 4,564 in August), so we are seeing an improvement.

Doing this in this way has allowed me to fully understand exactly how many products left this facility in an NOK condition, and therefore allows me to understand what problems we really have.

Smithy.
 
R

RosieA

Interesting approach, Smithy.

What my company does is to count anything in which an exchange of money or debits and credits takes place as a return and anything that has no financial impact as a complaint. this way we capture everything.
 
E

energy

Trust them?

Sam said:
Why do you let your customer "sort & scrap"? You have no control over the process, so why bother to count the scrap. Counting inaccurate results is no different tnen not counting at all.

Sam, When I first started reading the posts, I was amazed that so many people would take their customer's word for something as important as PPM. I want to see those parts. Verify that defect. Do MY CA. How do you know you are not giving credits where they are not due? Simple: If I physically receive it, I'll consider counting it, only after we have reviewed the reported problem. To take the Customer's word and issue credits is being naive IMHO. To include those numbers in your PPM, is, well, silly, for the lack of a better word. ;)
 
S

Sam

energy said:
Sam, When I first started reading the posts, I was amazed that so many people would take their customer's word for something as important as PPM. I want to see those parts. Verify that defect. Do MY CA. How do you know you are not giving credits where they are not due? Simple: If I physically receive it, I'll consider counting it, only after we have reviewed the reported problem. To take the Customer's word and issue credits is being naive IMHO. To include those numbers in your PPM, is, well, silly, for the lack of a better word. ;)

Ditto. That's why I don't condsider customer scrap in our figures. And we don't allow our customers to rework our product. If they want to scrap product then that is negotitated with sales.
 
B

Bigfoot

energy said:
Sam, When I first started reading the posts, I was amazed that so many people would take their customer's word for something as important as PPM. I want to see those parts. Verify that defect. Do MY CA. How do you know you are not giving credits where they are not due? Simple: If I physically receive it, I'll consider counting it, only after we have reviewed the reported problem. To take the Customer's word and issue credits is being naive IMHO. To include those numbers in your PPM, is, well, silly, for the lack of a better word. ;)

WOW! :eek: Such wisdom & coming from "energy". Just kidding ;) But really the value of tracking your PPM numbers come from real data, and doing / taking real corrective action. A previous employer thought they were doing very good with respect to the PPM's because much of it was not captured when a sort / rework was done at the customer location, and their C/A was cupcake stuff that sounded good but didn't fix the problems. They were reporting their PPM at about 17 PPM when I started with them in '98. 3 months later after a big blowout (100K suspect & reworked) the reality of what had been happening hit them like a ton of bricks. PPM went to over 4000 and all of a sudden there were a lot of questions being asked about many different things. Long story short when I left there many changes had occurred. Real corrective action was being done and the PPM for OEM's had been 0 to 1 for 24 months straight.

A second point which "energy" made very well was get the parts back. Although you can't say "No part, No problem" you need to take a firm stance on return of the product or your C/A system will look ineffective.
 
E

energy

You're surprised

Bigfoot said:
WOW! :eek: Such wisdom & coming from "energy". Just kidding ;)
A second point which "energy" made very well was get the parts back. Although you can't say "No part, No problem" you need to take a firm stance on return of the product or your C/A system will look ineffective.

I can understand your dismay. Just remember, I was doing this since 1966 and have seen it all. Just because I don't entertain the "new" theories of what QA is, doesn't mean we're out of touch! We just don't subscribe to the "new" methods of describing "old" stuff. It's not new. Just colored differently to look different. :agree:
 
B

Bigfoot

energy said:
I can understand your dismay. Just remember, I was doing this since 1966 and have seen it all. Just because I don't entertain the "new" theories of what QA is, doesn't mean we're out of touch! We just don't subscribe to the "new" methods of describing "old" stuff. It's not new. Just colored differently to look different. :agree:

Energy,
Dismay might be a bit to strong of a term. I think surprised fits better. Having read many of your comments in posts throughout the different threads in the forums your cynical side usually shows, or you play Devil's advocate and force the thread to look at what is being discussed in a different light, broadening the horizons (if you will) of those in the thread. :biglaugh: As for the "New" methods of describing old stuff, I am in total agreement with you!! :agree: Packaging it differently and giving something a fancy name like Sick Sigma is just better marketing of the old tools. Most companies I have worked for lacked the discipline and committment to stay the course with their SPC programs so when they adopted Sick Sigma "methodology" they were destined to marginal success. Anyhow I couldn't resist making the comment. Hopefully it didn't offend you.
 
E

energy

Absolutely not

Bigfoot said:
Energy,
Dismay might be a bit to strong of a term. I think surprised fits better. Having read many of your comments in posts throughout the different threads in the forums your cynical side usually shows, or you play Devil's advocate and force the thread to look at what is being discussed in a different light, broadening the horizons (if you will) of those in the thread. As for the "New" methods of describing old stuff, I am in total agreement with you!! :agree: Packaging it differently and giving something a fancy name like Sick Sigma is just better marketing of the old tools. Most companies I have worked for lacked the discipline and committment to stay the course with their SPC programs so when they adopted Sick Sigma "methodology" they were destined to marginal success. Anyhow I couldn't resist making the comment. Hopefully it didn't offend you.

Well, ain't you nice. I took it just like you meant it to be. True, I rarely get all somber and serious with a post. In the old days, my passion for what I believed and displayed intolerance for what others thought, got me in trouble. And rightly so. Thanks for noticing. :vfunny: :agree:
 
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