Tuesday, April 19, 2011

The Fallacy of PPM


10 and 20,000. What are those numbers? They are the goals for Customer PPM and Manufacturing PPM (2% reject rate) at a typical automotive Tier 1 supplier. If Engineering is allowed to design and Manufacturing is allowed to build to a 20,000 PPM Quality level then how can a company reach the goal of 10 PPM toward the Customer?

I think that companies kid themselves into believing that there is a difference between what Engineering and Manufacturing do and what the Customer receives. They wrongly assume that the problems CREATED in Engineering and Manufacturing will magically disappear as the product moves through the process. They usually assume, even subconsciously, that Quality will find the problems. Unfortunately, Quality ran out of magic pixie dust a long time ago, if it even existed at all. Nobody can inspect Quality into a product.

When are the managers of these companies, C-level managers, going to wake up and see this particular fallacy for what it is and do something about it? I don’t ask these questions from the normal, hum-drum “there goes the Quality guy again, spouting off about PPM” level. I ask these questions from the competitive survival level. What do you think the Chinese and Indian companies are doing right now? Learning from the best and ignoring the rest. When they rise up to the global stage with innovative, inexpensive and infallible products, where will you be? Chasing PPM or some “Zero Defect Program”? Awarding each other Black Belts and counting the phantom cost savings from continuous improvement? Worried about Cpk and Gage R&R numbers? Wake up…or you will see that the past few years have been a walk in the park compared to what’s coming. The previous American and European automotive recession was driven primarily by financial and marketing-related issues. The next one will be driven by Quality; there will be no recovery.