DPMO - Supply Chain Metric

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DPMO: Defects Per Million Opportunities
DPMO is a Six Sigma* calculation used to indicate the amount of defects in a process per one million opportunities.
To calculate: Total Number of Defects / Total Number of Opportunities for a Defect. Then multiply the answer by 1 Million.
The challenge here is determining exactly what qualifies as a defect. Some defects can pass through a quality inspection and have little impact on the end product. Other defects can result in re-work or scrap.
DPMO is sometimes used instead of Defect per Unit to allow for comparison between processes with different levels of complexity.
*Six Sigma uses statistical analysis to measure a companies performance by identifying defects in a manufacturing process. The goal of Six Sigma is to reduce process output variation to + or - six standard deviations. This results in no more than 3.4 defects per million opportunities.
Our goal is to guide companies that are looking to optimize their Supply Chain. Originally, we intended on answering questions about Inventory Control, Sourcing, Manufacturing, Distribution and Supply Chain Metrics. However, we currently do not have the resources to answer individual questions. 



 
 
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