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 slide deck was presented to the TeamMBA Class of 2011 on August 28, 2010.

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NGCSU TeamMBA Capstone: Project Review

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

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