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PPM
Parts Per Million (PPM) is quality performance method used in the manufacturing and automotive industries to measure the number of defective parts per one million parts produced or delivered. It helps track supplier performance, ensures continuous improvement, and supports customer satisfaction goals.
It is an essential component of supplier quality management and is often referenced in customer contracts and audits.
¶ What is PPM?
PPM = Parts Per Million
It’s a defect rate metric calculated to determine how many defective units exist in every one million parts:
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PPM = (Number of Defective Parts / Total Parts Supplied) × 1,000,000
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It provides a standardized way to compare performance across suppliers, products, and timeframes.
¶ When is PPM Used?
PPM is typically used in the following contexts:
- Supplier performance evaluation
- Ongoing quality monitoring
- Customer audits and reviews
- Continuous improvement tracking
- Setting internal and external quality goals
¶ PPM Classification and Targets
| PPM-Range | Performance | Level Remarks |
|---|---|---|
| 0 - 50 | World Class | Near zero-defect production |
| 51 - 500 | Excellent | Consistently high-quality supply |
| 501 - 1000 | Acceptable | Improvement areas may be needed |
| 1001 - 10,000 | Concerning | Action required to address the issues |
| > 10,000 | Poor | Unacceptable; Requires immediate action |
¶ Why PPM Matters
- Quantifies defect rates objectively
- Enables supplier comparison and benchmarking
- Drives process improvements and cost reduction
- Aligns quality goals across supply chain
- Supports root cause analysis and corrective actions
¶ Key Inputs for PPM Calculation
- Total parts delivered
- Total non-conforming parts (defects or returns)
- Time period (e.g., monthly, quarterly, yearly)
- Defect type/category
¶ PPM Reporting & Analysis and PPM metrics can be
- Auto-calculated from inspection and return data
- Segmented by supplier, part number, or customer
- Visualized in dashboards (trend charts, Pareto analysis)
- Exported in reports for management and audits
- Linked to CAPA (Corrective and Preventive Action Plan) workflows
¶ Tools Often Used
- Perfeckto QMS System to manage and analyse PPM metrics