A practical way of communicating the quality level of products produced or served to customers is through the quantity of defects per thousand or per million units. This KPI is easy to interpret and can be used to easily gauge increases in defects which can point to equipment or maintenance problems, production issues, and help point to skills deficiencies, The amount compared to (thousand or million) will depend on the industry and production levels.

In order to calculate the measure a random sample of production is taken and the defective units that don’t need the required standards are counted. So an example of this measure can be:

Wrench manufacturing Co.

Wrenches Manufactured this month: 23 030
Defective wrenches as per Quality tool standards: 12

Defects per thousand units produced: 0.52
23030 / 1000 = 23.03
12 / 23.03= 0.52

Other ways of evaluating levels of quality internally and externally, as perceived by customers, are: internal quality audits and a customer satisfaction index.