PPM Parts/millions and % Rejection. 

 

Parts Per Million:

Parts per million (ppm) is how many parts a certain molecule or compound makes up within the one million parts of the whole solution. It's typically used to describe concentrations of chemicals dissolved in a solvent (typically water) or compounds in soil.

 

PPM Rejection:

Customer Reject Rate is a quality measure reflecting the number of complete units rejected or returned by external customers, expressed in parts per million. The calculation should include parts reworked by customers. Applies to all shipped units including parts.

 

Calculate PPM:

Previously people use to calculate rejections / defects in %, many companies use to say that they work at 1% rejection level. Workmen use to feel satisfied that the rejection is too low (1%).

This PPM concept shows same results at wider perspective and creates good opportunity for reducing the rejects further :

1% Rejects means you manufactured 100 and 1 is rejected. PPM express this in other way as follows:

Million means 10 Lacs, so in PPM language same can be seen as 10000 rejects from 10 Lacks produced, this gives the feeling that there is huge rejects and even if you reduce it by 50 % 5000 rejects can be avoided.

Then comes concept of six sigma, here your rejects / failure level is only 3.4 PPM i.e. you generate only 3.4 rejects per 10 Lacks produced. Hence bringing rejects from 10000 nos (1%) to 3.4 nos is very big achievement and profit to any management. Few companies in India has achieved 3.4 PPM.

 

Calculation PPM Parts/millions and % Rejection :

If you sale 5000 parts and 100 parts rejected by customers in that month then : Rejection is 2%

PPM = (% rejects)x 10000 = 2 x 10000 = 20000 PPM OR other way is

PPM = (No. of Rejects) / ( total sale) x 1000000(10 Lacks) = 100/5000*10 Lacks = 20000 PPM

so you are working at 20000 PPM level for customers, which is very bad and should try to reduce to three digit level.