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Ppk is an index of process performance which tells how well a system is meeting specifications. Ppk calculations use actual sigma (sigma of the individuals), and shows how the system is actually running when compared to the specifications. This index also takes into account how well the process is centered within the specification limits.

If Ppk is 1.0... ...the system is producing 99.73% of its output within specifications. The larger the Ppk, the less the variation between process output and specifications.

If Ppk is between 0 and 1.0... ...not all process output meets specifications.

If the system is centered on its target value... ...Ppk should be used in conjunction with the Pp index. If the system is centered on its target value, Ppk and Pp will be equal. If they are not equal, the smaller the difference between these indices, the more centered the process is.

Discussion thread: Ppk vs Cpk - A Good, clear explanation