Control Chart Mini Case for Class
A firm who is receiving many customer complaints about their orders has just hired you, as losing customers is very expensive. The complaints show that many customers are not receiving what they order and what they do receive is often not in a timely manner. Currently there is no quality control program (QC) (delineated by a quality control policy (QCP)) in place because the manager thought QC was just for goods, not services. You were hired because you understand production and quality control processes and control charts that include metrics for real time control mechanisms and end process evaluation. Currently the company does have data on how many orders are taken per day, and how many complaints they receive for a given day of orders (someone has gone to the trouble to link the complaints to the correct day); this data is the first set of data in the first sheet in the data file (labeled ‘Practice Charts over time’). The first sets of data in the following sheets consist of measurements you took over the course of one month for various process steps for the complete process in the total order/filling process. This process consists of the customer issuing a purchase order (PO), operations generating a pick list, filling the order, creating a shipping manifest, and then shipping the order. The second sets of data in those same sheets contain measurements that you took of those same steps (or complete process) the month after you implemented changes to the process.
1) Can you tell what the problem is with the first data set in the first sheet, what control chart can you make, and why would you (What are you assessing when you look at the chart)? Would you keep gathering this data and charting it? The second set of data in the first sheet is the same as the preceding data set except it is after implementation of your changes. How would you chart this data?
2) Why did you gather data for both pre and post QCP implementation for some of the different process steps and additional total process? Create the appropriate control charts? Write about what these charts show you.
3) What kind of quality control process/policy would you suggest for this process, all 19 steps? Be sure to consider the whole process and if there are any other areas (systems) you might want to quantify or if any of the current measures should be dropped.
4) From the results shown in your control charts and any other trends (what are the means and variation doing) you might see in the data, justify a raise for yourself from what you know about being stakeholder centric and continuous improvement. Average CM per order is $125.00. You estimate that the average cost per complaint is $500 due to personnel costs related to dealing with the complaint and finding new customers to replace the dissatisfied customers lost due to defective orders.
5) You utilized a workflow software suite, Savvion, to make the PO to pick list to picking steps seamless. Savvion, the training and implementation cost $500,000 and will cost $50000 per year to keep up. You also had to hire one more IS person at $120,000 per year cost to maintain Savvion and the associated database. Pick time costs you $30/hour and it costs an additional $25 for every order that was not filled completely and it is estimated that it costs $10 to rectify pick mistakes. The company accrues monthly, has a discount rate of 13% and insists that it is impossible to see more than four years into the future so all projects are evaluated on a four year time horizon.
Note: difference between bill of lading and shipping manifest is that the manifest does not include the shipping information.
The bill of lading should agree with the commercial invoice and show description, value, net and gross weight of shipped goods, volume and measurement, marks, number of packages, name and address of the consignee (The importer) and consignor, name and address of shipping company and/or shipping agent, name of vessel and date of sailing, port of loading and port of discharge. Marks and numbers should agree with those on the invoice and containers.
The manifest includes names and addresses of consignor and consignee, description and value of the exported goods, net and total weight, number of packages and their contents, number of containers and contents, numbers of seals, and L/C number (if applicable).