Our company is trying to determine the best way to calculate ppm for distributors of manufactured electronic parts. If a supplier sends us a reel of resistors that has a qty of 100,000 do we count this as 100,000 defects on their ppm or 1 since they only commited one picking error.

This also beings up the issue of calculating an overall ppm when the parts come in with different units of measure ie. each, ft, litres. Can ppm values based on different units be averged togther. ie ppm of each, ppm for length.

The common defintion for PPM is Defective parts per million. So, yes, every defective part would count. Non-defective parts should not be factored in because they were not defective.

Defective ppmo is a little different. The theory here is that a complicated system (ie: transmission) has many more opportunities for defects than a simple metal bracket. So, measuring the number of defective UNITS could be a pretty high number, based on the complexity. There is some validity to this, but most customers track it based on units, not opportunities. Internally, some companies base it on opportunities, especially if they are running a six sigma program.

So, here's how it would look.

Defects per million units would be based on defects / 1,000,000 parts. 1 defect in a million parts would be expressed as 1 ppm.

Defects per million opportunities would be based on number of parts x number of potential defects per unit (opportunities). So, 1 defect in 10,000 parts x 100 potential defects per unit (opportunities) would be 1 ppmo.