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Folks, we are currently have a DPPM (Defects Parts Per Million) of 7315. (4047 defects / 553244) Sigma level 3.2ish.
How does this compare as a general rule of thumb? :?

I've suggested to the Directors that this means we are loosing around 27% of sales. Which wasn't taken seriously by them. I'm worried that they think we are better than we are...or maybe its me?

Thanks for any help

HMac's picture

Hi - could you clarify the link between defects and losing sales? How does the number of defects "mean" you're losing 27% of sales? A little more background might help the discussion.

AManagerTool's picture

Additionally, DPPM has to be compared to similar processes. We have no idea what process you are talking about. 3.2 sigma might be great or it could be lousey. It depends on what process you are benchmarking.

stephenbooth_uk's picture

[quote="AManagerTool"]Additionally, DPPM has to be compared to similar processes. We have no idea what process you are talking about. 3.2 sigma might be great or it could be lousey. It depends on what process you are benchmarking.[/quote]

I agree. I don't recall the exact figure but, I attended a talk from a semiconductor supplier last year where they mentioned that on some chip lines for every chip that they sucessfully produce they produce a large number of 'duds'. Compared with other's int he market their failure rate is amongst the best if not the best. For them a 27% failure rate would be incredible.

If you're making disposable plastic cups then a 27% failure rate would probably be abysmal.

Really the only meaningful comparator is others in the same field as you. Otherwise you're comparing apples with air conditioners.

Stephen

ianrose's picture

we are in the precision steel fabrication and machined components field ... there was general gufaws at my assertion that we may be loosing around 27% of sales on costs associtated with Non-conformance; remakes, inspection, material, admin...etc etc etc... :cry:

stephenbooth_uk's picture

[quote="ianrose"]we are in the precision steel fabrication and machined components field ... there was general gufaws at my assertion that we may be loosing around 27% of sales on costs associtated with Non-conformance; remakes, inspection, material, admin...etc etc etc... :cry:[/quote]

Do you know what sort of failure rates your competitors have?

What evidence do you have for your assertion that you're losing 27% of sales on costs associated with non-conformance, remakes, inspection, material, admin etc? What analysis have you done to get to that figure? What would you do differently to reduce non-conformance &c and what would it cost?

Personally I think that the company I work for loses a lot of productivity because we have to walk to meetings and senior management moved our main office from 5 minutes walk from our main customer's main office out to 35 minutes walk from our main customer's main office. This not only means that we each lose an extra hour per meeting but also when we arrive we're typically not in the best frame of mind (or body) to conduct business. If I were to present this to senior managers just as a gut feeling (which it is at the moment) they would probably laugh at me, so I'm looking at how I can collate evidence and present it in a way that will convince them then provide recommendations on how to resolve it.

Stephen

lazerus's picture

27% of sales in terms of the possible profit? Do you have a quality management system for continual improvement? MT goals to bring your Six Sigma level down? In our business an acceptable rework rate is <5%, but it's a commodity based thing, not a precision engineering thing. The faster and more automated we can be, the more profit per job. It's a better measurement. We're willing to throw work away if the client is willing to pay for that level of perfection.

My $2

tcomeau's picture

[quote="ianrose"]...
I've suggested to the Directors that this means we are loosing around 27% of sales. [/quote]

I'll echo what others have said, and give you a rate that's a shocker.

You need to compare this to some industry standard.

If you're writing flight software for a crewed launch vehicle, that defect rate is far too high. The goal for that software is zero. Really, zero. The Shuttle program has had, I think, seven errors. Ever. And they count defects found in simulations as if they were flight failures.

If you're building infrared detectors for space-based observatories, the [u]success[/u] rate is around 25%. That is, around three out of every four chips is unusable. For one of Hubble's new instruments I think they are on their eighth detector and they are still grumbling about read noise.

So it really depends. Go find out what your competitors, or other people who do similar products, have for a defect rate. If yours is higher, then go back to your management with a comparison and some suggestions for how to get the defect rate down. If your defect rate is lower, figure out why and write it up for a quality journal or industry publication!

tc>