2. ABOUT
PANGEA SILKSCREEN, INC.
Silkscreening
and
Embroidery
Company
All Orders are
12 Employees
Custom
Decorates and Buys Blank
resells Garments
3. Define Measure Analyze Improve Control
DEFINE – PROJECT CHARTER
PROBLEM STATEMENT
Project Name: Reduction of Fabric
The issue: Handling of defective goods Project
Flaws/Rejects
Michele LeSage
received and goods rejected after Sponsor:
Department: Production and
decorating processes. Accounting
Process: Screen printing
and Embroidery
Goods received damaged are
occasionally not processed for a credit. In TEAM MEMBERS
NAME DEPARTMENT
some cases, goods received incorrect are Christine Lorn Independent Consultant
even processed through production. Lance Gibson Accounting/Admin
Support
Laura Traverse Production Manager
Excessive time spent on researching
inventory discrepancies due to
unreported rejects or improperly invoiced
orders.
4. Define Measure Analyze Improve Control
DEFINE – PROJECT CHARTER
GOALS AND OBJECTIVES
• Improve the process of handling defective goods received as well as
defectives produced during printing or embroidery process.
• Reduce number of defectives inaccurately reported or not reported at
all.
Objectives
1. Create accounting and production processes for tracking and
differentiating between types of rejects/flaws.
Begin tracking and differentiating of types of rejects
Reduce errors in invoicing
2. Develop flow charts for handling rejects.
Reduce number of defects processed incorrectly.
Reduce number of defects not processed for credit
3. Begin regular reporting of rejects.
Awareness of cost of rejects and intent to reduce this cost
5. Define Measure Analyze Improve Control
DEFINE – FISHBONE DIAGRAM
Man Production Software
Lack of Interdepartmental Fail to properly fill out Sales Limited capabilities due to
Communication. Order paperwork Lack of industry specific options
Insufficient Training on reporting Fail to return defective goods Limited reporting options
Procedures After RA request
Insufficient Training on use of Fail to recognize incorrect
Accounting software Goods during inspection
Complacency due to Tenure Fail to report defectives
To Purchasing Department
Defect Reporting Errors
Fail to use correct GL account Poor lighting in sorting areas Fail to process return request
Improper procedure for Lack of organization in Use incorrect GL account for
invoicing rejects sorting areas Inventory adjustments
Recording shortages as rejects Insufficient documentation of Improperly record return/
When they were received defective Reporting procedures Replacements In Peachtree
Fail to include rejects during Lack of organization in Fail to record return/
invoicing Production facilities Replacements in Peachtree
Accounting Facilities Purchasing
8. Define Measure Analyze Improve Control
FLOW CHART –
REPORTING FABRIC FLAWS AND REJECTS
Receive and
Inspect Blank
Process order through
Goods
proper decorating process.
Inspect Finished
No Goods.
Visible
Flaws?
Receive and Inspect
Replacement Goods.
Yes
Visible
Defects?
Time to
replace goods
before Order Yes Request replacement
Due? goods from Purchasing Yes No
Department.
Fill out Paperwork
Fill out SO and
and send to
No
corresponding Defect
Invoicing.
Report, Send to Office.
Notify Purchasing Request Credit
Department of from Vendor for
defective goods. defective goods.
9. Define Measure Analyze Improve Control
IMPROVEMENT – CORRECTIVE ACTIONS
• Develop process instruction document to formally train
production staff on proper reporting procedures for defective
goods and rejects.
• Create forms for formally reporting defective goods received.
• Added 2 new GL accounts for tracking rejects and defective
goods in order to monitor lost sales.
• Develop written procedures for invoicing with rejects specific
to Peachtree Accounting software.
• Develop written procedures for processing returns of defective
goods.
• Train office staff to follow new procedures.
10. Define Measure Analyze Improve Control
WRITTEN PROCEDURES
Pangea Silkscreen, Inc.
Pangea Silkscreen, Inc.
Written by: Christine Lorn
Written by: Christine Lorn
Approved by: Michele LeSage
Approved by: Michele LeSage
Date Issued: 10.15.12 Date Issued: 10.15.12
Subject: Handling of Fabric Flaws and Rejects by Purchasing/Accounting Subject: Reporting of Fabric Flaws and Rejects by Production/Shipping
1. Purpose: To describe the actions necessary to correctly deal with fabric flaws and post-production 1. Purpose: To describe the actions necessary to correctly report fabric flaws and post-production
rejects. rejects.
2. Scope: Applicable to Purchasing and Accounting departments. 2. Scope: Applicable to Printing and Embroidery departments.
3. Procedure – Irregular Garments and Incorrectly Ordered Goods: 3. Procedure – Preproduction Inspection:
3.1. Upon receipt of Irregular Garment form – Return Only: 3.1. Inspect blank goods received from distributor
3.1.1. Request RA# and Call Tag for garment to be returned. 3.1.1. Check garment color to SO. Use mill color card if unsure of colorway.
3.1.2. Enter return information into Peachtree using RA# as invoice#, making sure to remove 3.1.2. Inspect for visible defects; rips, stains, irregular seams, irregular sizing, etc.
items from inventory (negative quantities). 3.2. If irregular garment(s) is found:
3.1.3. Change item GL account # to 3140400 3.2.1. Fill out Irregular Garment form and submit to Purchasing Department.
3.1.4. Mark as ‘waiting on bill’ and save. 3.2.2. Prepare irregular(s) for return to vendor.
3.1.5. Return call tag to Shipping Department, including RA#. 3.2.3. Mark clearly with RA# provided by Purchasing.
3.1.6. Update Sales Order in Peachtree to reflect new quantities. 3.2.4. Place package on back desk and await call tag.
3.2. Upon receipt of Irregular Garment form – Replacement Requested: 3.3. If no replacement is to be requested, proceed with order with current quantities.
3.2.1. Request RA# and Call Tag for garment to be returned. 3.4. If replacement is requested, hold order until replacement garment(s) arrive.
3.2.2. Print out confirmation for replacement goods. 3.5. If items have been ordered incorrectly:
3.2.3. Enter return information into Peachtree using RA# as invoice#, making sure to remove 3.5.1. Place incorrect items in empty box and prepare for shipping. Place on back desk.
3.5.2. Highlight items ordered incorrectly.
items from inventory (negative quantities).
3.5.3. Return PO and SO to Purchasing Department.
3.2.4. Enter replacement confirmation PO into Peachtree using default information.
3.5.4. Hold order for replacement goods.
3.2.5. Return Call Tag including RA# and Replacement PO to Shipping Department
4. Procedure – Postproduction Inspection:
3.3. Upon return of Sales Order/PO including items ordered incorrectly:
4.1. Inspect finished goods after print/embroidery process.
3.3.1. Request RA# for garment(s) to be returned.
4.1.1. Check garment for decoration alignment, Ink fastness, burning/shrinkage, thread
3.3.2. Enter return information into Peachtree using RA# as invoice#, making sure to remove
coverage, etc.
items from inventory (negative quantities).
4.2. If irregular garment(s) found:
3.3.3. Create Shipping Label for goods being returned using UPS Worldship. Be sure to put RA#
4.2.1. Clearly mark item as rejected on SO.
in the reference box. 4.2.2. Place rejected item in test fabric box.
3.3.4. Create new PO for replacement goods. Write new PO# in notes section of SO. 4.2.3. Submit SO for invoicing.
3.3.5. Enter replacement confirmation PO into Peachtree using default information.
3.3.6. Return Shipping Label including RA# and Replacement PO to Shipping Department
4. Procedure – Posting Postproduction Rejects:
4.1. Invoice all items on Sales Order.
4.2. Remove items from inventory on ‘Apply to Sales’ tab (negative quantities.
4.3. Change GL Account # to 3140500.
4.4. Proceed with regular invoicing procedure.
11. Define Measure Analyze Improve Control
NEW FORMS FOR REPORTING REJECTS
Irregular Garment Form
Please complete and return to Purchasing Department
Item # Color Size
Description of Irregularity
(Type and Location)
Replacement Requested? Yes No
PO# SO# Due Date:
Reported By:
For Office Use Only:
Date Rcd: RA# Date Shipped: Replacement PO#
12. Define Measure Analyze Improve Control
CONTROL
How will Pangea be able to monitor effectiveness?
An additional report will be added to the End of Month
reporting schedule which will be monitored for errors.
Most errors in this new procedure will be found during
month-end inventory analysis.
Future Benefits:
Pangea will now be able to track the quantities and
values of rejects produced as well as profits lost due to
defective goods received from vendors.
Less time will be spent on Month-end inventory.
