Calculating Customer Returns ppm

Helmut Jilling · Feb 13, 2014

mjoakin said:
I see there was no answer to this, and I have one more questions. I need to calculate my internal PPM, but, I have (lets say) 4 different products, ie:

Product A - 1000 units, 2 rejections
Product B - 2500 units, 35 rejections
Product C - 1750 units, 5 rejections
Product D - 1970 units, 0 rejections

Product B will have the greater PPM, but I want to calculate my internal PPM.

If I sum all rejections and divide it by produced units, the company PPM will be affected due to Product B, my internal PPM will be 5,817 ppm, which is unacceptable.

Now, if I have a 5th product, product E, where the units (due to they are small parts or easy parts) are 45,000 with 0 rejections, this will decrease my PPM to 804 ppm.

How can I get an accurate calculation? I don't think is right when you have a problematic product and an easy one, and such variations of produced/rejected units affects the final PPM that way.

You are not limited to one measurement. Measure the data several different ways. Do a general measurement of ppm, and do some variations if it is appropriate. For example, if you have a particular part or customer that you want to monitor better, measure ppm for just that data also.

Measure ppm as the number of DEFECTS, not the number of rejects. If your customer rejects a lot of 1000 pcs, because they found two defects, the true performance measure is based on the 2 defective parts, not the 998 rejected good parts.

Measure the number of customer incidences, not just pppm.

And lastly, the correct question to ask is, "what do we want to know?" That will direct you to what should be measured.

gpainter · Feb 13, 2014

One can make numbers show what they want. What is going on in process B? Can it be improved? Will you be allowed to improve it? This is an area where you need to look- is it profitable to continue manufacturing Product B? You had said that E would be smaller and easier. If size is a determing factor of quality-then you could group by size to get a better picture.

Calculating Customer Returns ppm

Helmut Jilling

Auditor / Consultant

gpainter

Quite Involved in Discussions

Similar threads