NGCSU TeamMBA Capstone: Project Review

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Mike Hoffman, TeamMBA Class of 2010, walks through the steps his team (Vivian Chi, Jessica Dobbs, Michael Blair and Rob Pauley) followed to complete their TeamMBA Capstone project in April 2010. This …

Mike Hoffman, TeamMBA Class of 2010, walks through the steps his team (Vivian Chi, Jessica Dobbs, Michael Blair and Rob Pauley) followed to complete their TeamMBA Capstone project in April 2010. This slide deck was presented to the TeamMBA Class of 2011 on August 28, 2010.

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Transcript

  • 1. Cost of Quality at Avon Atlanta
    MBA Team 3
    Michael Blair
    Vivian Chi
    Jessica Dobbs
    Michael Hoffman
    Robert Pauley
  • 2. Overview of Project
    Assess the cost of quality at Avon Atlanta
    Quality measures driven by “DPMO” rate
    DPMO – (Defects Per Million Opportunities) accuracy of order fulfillment based on random audits of completed orders
    Determine the financial impact of DPMO rate
    Provide recommendations for improving (i.e.; decreasing) the DPMO rate
  • 3. Why This Project?
    Project has support of local management
    Project specific to Avon Atlanta site
    Can be managed (controlled) locally
    Access to necessary data, facility, and key stakeholders
    Assessment of quality and relevant metrics with relationship to cost has not been determined
  • 4. Project Activities(Milestones)
    • Analysis of order fulfillment process
    • 5. Analysis of facility volumes and throughput
    • 6. Analysis of error rates (DPMO)
    • 7. Development and Analysis of Client Survey
    • 8. Determination of costs associated with errors in order fulfillment
    • 9. Recommended Solutions
  • Process Flow
    Order Entry
    Station Light item processed
    Invoice and Pick Tray
    Y
    SLS Item?
    N
    CPA Item?
    Cart Pick Item Processed
    Y
    Inspection at random
    N
    MAS Item Process
    Items Shipped
  • 10. DPMO Statistics
    2009 DPMO Rate
    1310 defects per million pieces shipped
    Individual Area
  • 11. Representative Survey
    • Purpose: To capture the level of satisfaction of the Avon Representatives in the Atlanta Distribution District.
    • 12. Development: Joint process between Avon Atlanta and MBA Team.
    • 13. Topics Covered:
    • 14. Merchandise Appeal
    • 15. Quality of Order Fulfillment
    • 16. Customer Service Quality
    • 17. Open Comments
    • 18. Overall Confidence in Avon Atlanta
  • Representative Survey Findings
    • Dissatisfaction with Order Fulfillment Accuracy
    • 19. 10.5% not confident in Avon order accuracy
    • 20. Why???
    • 21. 33% reported missing items of 2 or more on average
    • 22. 20% received incorrect items of 2-3 on average
    • 23. 41% Dissatisfied with Customer Service willingness to help
    • 24. 54% Dissatisfied with knowledge of Customer Service
  • Cost Analysis
    • Total Branch Cost associated with fulfilling defects
    • 25. Cost per fulfilling error
  • Recommendations
    • 100 % Verification after MAS loading
    • 26. In motion scales
    • 27. Weight Based procedure for error correction
    • 28. Auditor station at error correction area
    • 29. Change in auditor process of error corrections.
    • 30. Notes:
    • 31. Hand held scanner technologies for CPA
    • 32. Added procedure to cross check line balancing changes to correspond with campaign change days.
  • 2 Scales to read expected weight of order
    Flow of conveyor belt
  • 33. Financial Evaluation of Technology Recommendation
  • 34. Summary
    DPMO Rate 2009 - ~1310
    Cost approximately $950K
    Or $4.14/defect
    ~ $716/DPMO unit (volume ~173MM)
    Suggest Improvement in MAS area
    Automated weight scales
    Cost to Implement - $159K
    Savings/year - $100K
    Payback – 2.25yrs, NPV=$200K(10yrs), IRR=44.2
  • 35. Challenges
    Project Specific
    Gathering technology based responses
    Gathering research data
    Software constraints
    Guard against project “scope creep”
    Capstone Specific
    Time
    Team member is employee
    Communication
  • 36. Hindsight – What Was Our Project
    Analysis of Business Processes
    Analysis of current metrics and relevance
    Customer Survey
    Capital Costing Project
    Recommended solutions with cost benefits to company
  • 37. Keys to Success
    Good Communication
    Chose well defined project
    Recognize (and exploit) team members strengths
    Assign tasks and hold team members to timelines and deliverables
    Team member worked for project company
  • 38. Questions