Run Chart

25

20
# of Errors

15

10

Time

Slotter Keying Letdown ITR ADJ Putaway Other

Question – 2
Prepare appropriate process control charts to see if the process is in control. Is the receiving
process in or out of control? 

P-chart of overall performance:
n=800
k=45
∑ yi=655
Centerline= ∑ yi/(k*n) = 655/36000=0.0182
UCL= p  3s p =0.0182+3*sqrt(0.0182*(1-0.0182)/800)=0.032
LCL= p  3s p =0.0182-3*sqrt(0.0182*(1-0.0182)/800)=0.004
All values are between 0.004 and 0.032; process is under control, but there might be a possibility
of the points 15,16 and 17 following the pattern Western electric rules that 2 out of 3 points are
below 2 standard deviation, but cannot be clearly inferred.

P-chart of module 1: breakpack items

UCL1=0.027+3*sqrt (0.027*(1-0.027)/400)=0.051
LCL1=0.027-3*sqrt (0.027*(1-0.027)/400)=0.003

some data points are not between 0.003 and 0.051; process is not under control as we can
observe points outside the control limits.

P-chart of module 3: full case items

UCL3=0.0094+3*sqrt(0.0094*(1-0.0094)/400)=0.024
LCL3=0.0094-3*sqrt(0.0094*(1-0.0094)/400)=0
After analyzing the above charts, we conclude that the process is not in control.

Question – 3
Customer service requirements determine that receiving process errors should never exceed 2
percent on any given day. What percentage of the days is likely to exceed 2 percent error, given
the current performance at receiving? Assume a total of 8,000 transactions per day, 4,000 in each
module.
655
µ= = 0.0182
36000

2
x = 100 = 0.02

Now, the formula for calculating “s”

0.0182(1−0.0182)
s=√ = 0.00149
8000

𝑋− µ 0.02− 0.0182
Z= = = 1.21
𝑠 0.00149

P (Z <0.02) = 0.8869

P(Z>0.02) = 1 - P (Z <0.02) = 1 – 0.8869 =0.1131= 11.31%

Question – 4
For more than 99% to have less than 2% of process error:
For P(Z) = 0.99, we get the Z value to be 2.33
So,
𝑥̅ − µ
Z= , where s= √(µ*(1- µ)/n)
𝑠

(0.02− µ)
2.33=
[√(µ∗(1− µ)/8000)]

µ =0.0167

As a result, it can be concluded that to ensure that 99% of the days have less than 2 percent error,
we need to reduce the average defective proportion from 0.0182 to 0.0167.

In addition, our group did a pareto diagram for different types of errors. From the Pareto chart
that is shown as below, it can be indicated that other error is the primary reason that causes
ineffectiveness, as it takes up the highest portion on the number of errors, which is
approximately around 36.95%. The second category is slotter error. As it can be inferred from
the chart, slotter error and other errors are the major causes. As other error takes the largest
percentage of the total, we suggest that Stalk could use a drill-down strategy to decrease minor
errors that could happen in the receiving process. After then, the company could focus on
reducing errors in the slotter function.

The same pattern can be observed when we look at each of the modules by their own. Slotter and
Others seems to be the two-main source of errors In particular, at module 3 Others is the most
frequent type of error which again suggest it should be broken down. However, the main difference
between the two modules seems to be with letdown type of errors which are much more frequent
at Module 1 than 3.

Question – 5
Can you think of a continuous improvement framework that Stalk can use as an engine to improve
performance in the receiving process and other processes at Springfield?

There are a lot of continues improvement processes available and most of them are based on the
same philosophy. However, a typical one for service delivery that can be used is the “model of
service quality”, also known as the Gaps model. The model of service quality identifies five gaps
that may cause customers to experience poor service quality.

Gap Brief description Recommendation for Stalk

Gap 1 Difference between the -Try to identify the severity of each of the
The Knowledge Gap target market’s expected errors.
service and management’s -How much is the delay experiencing the
perceptions of the target customers?
market’s expected service.
Gap 2 Difference between -Enabling a no ambiguity in the work role of
The standards Gap management’s perceptions employees would enable a more effective and
of customer expectations efficient company culture
and the translation into -Investesting more time and resources on
service procedures and employee training program and quality
specifications planning and quality inspection.
Gap 3 Difference between service -Measuring the process KPI more frequently to
The Delivery Gap quality specifications and check if process is in control or not.
the service actually -Digitization of the delivered goods would
delivered could, when implemented, improve the
performance of the organization. Specifically,
technologies like RFID or simple bar code
scanning can be very useful helping to record
all delivered goods digitally and tracking them.
Gap 4 Difference between service
The Communications delivery intentions and
Gap what is communicated to
the customer
Gap 5 It is the only gap that can
Customer be directly measured as the
satisfaction individual's perceptions of
given service minus the
individual's expectations of
a given service. (Customer
perception – customer
expectations or Gap 4 –
Gap 1). This is when the
cycle iterates again.
Clarifying differences in policies and procedures
across branches or divisions of the company.
In the event of a fault, notify the relevant
customer quickly and send the goods as soon
as possible.
Keep monitoring the customer satisfaction and
managing how the process can be improved.
Also the use a of tracking system (like a CRM
system) of the customer satisfaction will be
very useful in the implementation of a
continues improvement process.
Also, implementing policies when quality is not
met is advisable, like a cost reduction on the
following delivery to increases customer
loyalty.