What is DPMO?
DPMO or Defects per Million Opportunities refers to a measure of procedure or service efficiency. It is part of a business management strategy called Six Sigma which aims to improve processes within organizations by means of identifying and analyzing the reasons behind “defects” in a particular process. If there are flaws in a particular process or defects in certain outputs, these are measured against a standard base of one (1) million opportunities. If for example a certain procedure has a total of 200 defects in 1000 opportunities or instances, then the DPMO may be calculated by dividing 200 over 1000 and multiplying the product with 1 million. Using this example, the process involved would get a 200,000 DPMO which is obviously not a good quality standard. Some people refer to DPMO as DPU or Defects per Unit.
The concept of Six Sigma revolves around process and/or procedural improvement by means of using statistical data involving the defects or errors of particular process or system. In a given organization, the aim is to identify defects and correct and/or manage them in the process to achieve efficiency goals in terms of production or procedural perfection. For the most part, about 3.4 DPMO is considered a very high quality standard for processes and procedures.
DPMO as a measurement of process efficiency may be used by different organizations and industries. The process of Six Sigma involves detailed documentation and assessment of the different processes affecting the delivery of service and/or products. Like in the case of manufacturing organizations, all various aspects and units involved in making a particular product is analyzed for possible errors in the system. After identification of the errors, solutions and strategies are formulated to address the specific error and hopefully improve the overall DPMO score. The basic goal is to gain process improvement through application of Six Sigma standards of business process management.
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