DPMO – Defects Per Million Opportunities

DPMO is one of a few important Six Sigma metrics that you should get comfortable with if you’re associated with Six Sigma. In order to understand DPMO it's best if you first understand both the nomenclature and the minor nuances such as the difference between defect and defective.

DPMO Nomenclature:

• Defects = D
• Unit = U
• Opportunity to have a defect = O

Defining "defect", "defective" and "Opportunities"

Defective

Defective suggests that the value or function of the entire unit or product has been compromised. Defective items will always have at least one defect. Typically however, it takes multiple defects and/or critical defects to cause an item to be defective. To put it simply, defective is "broken", it can't be used or sold.

Defect

A defect is an error, mistake, flaw, fault or some type of imperfection that reduces the value of a product or unit. A single defect may or may not render the product or unit "defective" depending on the specifications of the customer. Defects

Defect vs. Defective Summary:

• Defect means that part of a unit is bad
• Defective means that the whole unit is bad.

Now let’s turn our attention to defining "opportunities" so that we can fully understand Defects per Million Opportunities (DPMO).

Opportunities:

Opportunities are the total number of possible defects. If for example a unit has 6 possible defects then each unit produced is equal to 6 defect opportunities. If we produce 100 of those units then there are 600 defect opportunities.

Calculating Defects per Million Opportunities

• The equation is DPMO = (D/(U*O))*1,000,000

First, find your total opportunities by multiplying the # of units by the # of defect opportunities per unit, then divide defects by your total opportunities then multiply by one million.  It's not a difficult metric but what makes it unique and effective is that it considers the various possible "defects" that a product or service might have and it provides a measure to observe performance relative to all possible mistakes a process can make.

Most organizations only measure the rate of defectives (you know, the broken ones! because they can't be sold). However, that only serves to limit the organizations ability to continuously improve it's process and output.  Let's look at a basic example:

• Assumptions:
  • Your organization produces pencils
  • There are 5 defect opportunities per pencil (lead, wood, eraser, eraser clasp and label)
  • Your organization averages of 4 defects every 100 units
• Defect Opportunities when producing 100 pencils = 5*100 or 500
• Defect rate = 4/500
• DPMO = 4/500*1,000,000 or 8000.

What is the reason or significance of 1,000,000"? Converting defect rates to a per million value becomes necessary when the performance of your process approaches Six Sigma. When this happens, the number of defects shrinks to virtually nothing....in fact, if you recall from the ‘What is Six Sigma’ module, it's 3.4 defects per million opportunities. By using 1,000,000 opportunities as the barometer we have the resolution in the measurement to count defects all the way up to Six Sigma.