The accuracy of a sensor like this is going to depend on a number of different characteristics of the system into which it is integrated. For instance, if you look at the “Example of output distance characteristics” graph on page 4 of the sensor’s datasheet, you will see that the output voltage can vary a bit based on the amount of light the object being measured reflects. In most cases, it would probably not be very practical to expect 1mm of accuracy out of the sensor, though it might be possible to achieve that in a system with very consistent objects being sensed, lighting conditions, and electrical characteristics. We do not have any other specific sensors to recommend for that level of accuracy.