Statistical Process ControlAgendaIntroductionNumber of.docx

Statistical Process Control
Agenda
Introduction
Number of Ford Focus sold
Number of Ford Focus recalled
Summary and Recommendations
References
2
Introduction
Statistical Process Control
Method used for quality control
Ford Focus transmission problems
Statistical Process Control is a process that is used for quality
control of a item. It monitors and control any process to ensure
operations are at the full potential. In this case, Ford has been
having many transmission issues with the Focus since 2012.
3
Number of Ford Focus sold

I Chart represents 1k units per month for last 40 months
Second chart: Yearly sales
Sales decreased by 89,133
Sales for the Focus have been on a rollercoaster ride since
December 2015. When you observe the yearly sales you can see
this vehicle has been on a rapid decline in sales.
4
I Control Chart
Sample
Means12345678910111213141516171819202122232425262728
29303132333435363738394011131919161719141211991010131
413171516131210131171216131611997544721UCL1234567891
01112131415161718192021222324252627282930313233343536
3738394015.45277698908495615.45277698908495615.4527769
8908495615.45277698908495615.45277698908495615.4527769
8908495615.45277698908495615.45277698908495615.4527769
8908495615.45277698908495615.45277698908495615.4527769
8908495615.45277698908495615.45277698908495615.4527769
8908495615.45277698908495615.45277698908495615.4527769
8908495615.45277698908495615.45277698908495615.4527769
8908495615.45277698908495615.45277698908495615.4527769
8908495615.45277698908495615.45277698908495615.4527769
8908495615.45277698908495615.45277698908495615.4527769
8908495615.45277698908495615.45277698908495615.4527769
8908495615.45277698908495615.45277698908495615.4527769
8908495615.45277698908495615.45277698908495615.4527769
8908495615.452776989084956Mean12345678910111213141516
17181920212223242526272829303132333435363738394011.47
511.47511.47511.47511.47511.47511.47511.47511.47511.47511
.47511.47511.47511.47511.47511.47511.47511.47511.47511.47
511.47511.47511.47511.47511.47511.47511.47511.47511.47511
.47511.47511.47511.47511.47511.47511.47511.47511.47511.47
511.475LCL123456789101112131415161718192021222324252

627282930313233343536373839407.4972230109150447.49722
30109150447.4972230109150447.4972230109150447.49722301
09150447.4972230109150447.4972230109150447.49722301091
50447.4972230109150447.4972230109150447.49722301091504
47.4972230109150447.4972230109150447.4972230109150447.
4972230109150447.4972230109150447.4972230109150447.497
2230109150447.4972230109150447.4972230109150447.497223
0109150447.4972230109150447.4972230109150447.497223010
9150447.4972230109150447.4972230109150447.497223010915
0447.4972230109150447.4972230109150447.497223010915044
7.4972230109150447.4972230109150447.4972230109150447.4
972230109150447.4972230109150447.4972230109150447.4972
230109150447.4972230109150447.4972230109150447.4972230
10915044
Time Point
Thousand Per Month Value
Equipped cars with new shifting transmission (bad concept)
First year 3,469 reported problems
Consistent software updates or replacing transmission
Number of Ford Focus recalled
Vehicles were equipped with a “dry” method clutch instead of a
“wet” one. Caused vehicles to have problems downshifting.
When accelerating, vehicle would hesitate and keep it from
reaching speeds of a normal vehicle. There have been
consistent software updates and even replacing the transmission
2-4 times within a 3-4 year of ownership. This is clearly a Lean
Six Sigma Waste. It would fall under defects.

5
Summary and Recommendations
Remove defected vehicles from roadways
Offer incentives to help remove defected vehicles
Should settle any pending lawsuits
Because the Focus has taken such a devasting lost over the
years. It is best for Ford to stop production on this vehicle. If
they continue to produce this vehicle, it could put someone in
the biggest danger, death. For the vehicles that are currently
being used, incentives should be given to return the vehicle.
These incentives would be use to purchased another vehicle in
Ford’s lineup. This should settle any lawsuits and help with
Ford’s market value and image.
6
References
Ford Focus Sales Numbers(2019). Retrieved from
http://fordauthority.com/fmc/ford-motor-company-sales-
numbers/ford-sales-numbers/ford-focus-sales-numbers/
Ford Focus - Problems, Statistics, and
Analysis(2019). Retrieved from
http://www.carproblemzoo.com/ford/focus/
Ford's Transmission Problem(n.d.). Retrieved from
http://www.fordtransmissionproblems.com/fords-transmission-
problem/
7

9
Executive Summary
Starbuck's Inc business operations dataset (Net revenues from
2000 to 2018) is used in developing and analyzing the three
quantitative forecasts. The three quantitative forecasts will be
compared against each other to identify the best method for
Starbuck Inc.
· Linear Regression Forecasting
· Simple Moving Average
· Exponential Moving Average
Linear Regression Forecasting
The linear regression technique is used to show a straight line
to data in the past.
· Regression is a functional relationship between two or more
correlated variables.
· Used for both time and relationship forecasting.
Y = B0 + B1X1, where B0 is the y-intercept, B1 is the gradient,
X is the independent variable, and Y is the dependent variable
(Box, Jenkins, Reinsel, & Ljung, 2015). The table below shows
the line of best fit to the data set.
Figure 1: Graph of a linear regression forecasting
10 = X- bar
11358.47 = Y-bar

1208.01 = b
-721.67 = a
Regression Equation is Y = 1,208.01X + 721.66667
Simple Moving Average (SMA) quantitative forecast
The simple moving average quantitative method
· Used to represent an average that "moves" through the time
series
· Arithmetic moving average obtained by calculating the
average net revenues over a given number of periods.
· Computed from the company's closing sales.
· 3-year simple moving average will be computed by adding the
annual net revenue for the last 3 years and dividing the
summative by 3.
Table 1: Table of 3-year Simple Moving Average
The computation is repeated for each net revenue on the chart,
and the average is calculated by dropping the oldest observation
and adding the newest observation (Liu, & Li, 2015). The graph
below is a plot which demonstrate data sequence in the table
above. The SMA begins on year 2003 and continues. The
number of periods in SMA is 3. Moreover, the values of mean
squared error (MSE) and mean absolute deviation (MAD) and
are 2561.46 and 8307494.37 respectively.
Figure 2: Graph of a simple moving average.
Exponential Moving Average (EMA) quantitative forecast
The Exponential Moving Averages is decreasing the lag by
applying the weighting factor which reduces exponentially.
· The weighting factors is based on the most recent data as well
as the total number of periods required.
· Three phases involved during the computation.
· First phase involves computing for SMA
· Second phase involve the computation of weighting factor
· Last phase involves the calculation of exponential weighted
moving average

Table 2: Exponential Moving Average
The weighting factor applied to the most recent data depends on
the number of period in the moving average. Weighting for a
short period is preferred than for a longer period. Therefore,
Starbuck`s 3-year period can be said to be more relevant. The
chart below illustrates the sequence of data and the exponential
smoothing from Table 2.
Figure 3: Graph of Exponential Moving Average
The best forecasts method for the company
Based on the three quantitative forecasts methods, exponential
moving average (EMA) forecast technique is more effective and
it should be employed in the company. Though this forecast
method seems more complex when compared to the other two
techniques, EMA forecast indicates a well-calculated forecast
value which considers all factors of production within a
company, hence producing an accurate and reasonable forecast.
Moreover, the EMA technique lowers the lag which is available
in SMA through advocating and implementing the use of
shorter-predictive periods as a way of improving the company`s
levels of accuracy.
Impact this forecast on the firm's financial metrics standpoint
The exponential moving-average forecast method will result in
several positive impacts on Starbucks' financial metrics. The
forecast technique will produce accurate and precise net revenue
forecast which will aid the management sector to come up with
more quality products and services catering to the needs of all
the customers. Customers satisfactory is directly proportional to
the company`s performance.
Furthermore, exponential moving-average forecast method will
help Starbuck company in the creation of more effective adverts
to attract the attention of more customers. Business companies
should consider exponential moving-average technique as the
best method for predicting the nature and performance of the
company.
Conclusion

According to the three quantitative forecast methods, the
exponential moving average appears to be the best method for
Starbuck Company and other business companies as well. The
EMA responds to the data fluctuation quicker than a simple
moving average. Therefore, it produces accurate and price
forecast.
References
Box, G. E., Jenkins, G. M., Reinsel, G. C., & Ljung, G. M.
(2015). Time series analysis: forecasting and control. John
Wiley & Sons.
Liu, D. J., & Li, L. (2015). Application study of comprehensive
forecasting model based on entropy weighting method on trend
of PM2. 5 concentration in Guangzhou, China. International
journal of environmental research and public health, 12(6),
7085-7099..
Flowchart Improvement Process

Overview
An “as is” shows the current logistics of a business process in a
organization.
The process shows how business process works today.
An “as is” processes of sales department in a local organization
will help us understand how the stakeholders routinely perform
business
To understand the current state, interviews is among the
common techniques used to collect information.
Analyzing business process helps business:
Minimize waste of resources
Clarify actual- operation step-by-step
Business analysts are able to ask the right questions.
Both current and future state are important because they help an
organization become more client-focused.
An organization can adjust to meet its team needs..
*
Current State
Quotation
Customer agree to buy
End
Sign the contract
Stock?
Deliver soon after receiving payment
Deliver goods
Receipt of goods
After sales services
Prepare production
Arrange deposit

Yes
No
No
Yes
Process Improvement The process of sales runs through various
steps as indicated in the current flowchart.Once a customer
agrees to buy our products he/she signs a contract. If the
customer agrees to proceed with the process products are
delivered after receiving the payment.Goods are then delivered
and receipts of goods issued. Lastly after sales services such as
transportation or discounts are extended to customers. Process
improvement is a process of identifying, analyzing as well as
improving the current processes to meet new goals and
objectives (Davenport, 2015).
Process improvement:
Define, measure, analyze, improve and control internal
processes.
*
Future State

Business has remarkably transformed.
In the current environment consumers want a simplified process
Unlike in the current state, sales process should be simplified to
minimize time and reduce cost.
Start
Look for a product
Did you find it?
Did you need it?
No
Yes
Forecast Due to advancement in technology, it is essential to
embrace technology in sales process (Taylor & Letham,
2018).The current state is more of traditional and lengthy.To
eliminate delay, the future state should be made simple by
eliminating various logistics such as manual processing of
receipts.From a judgmental forecasting, the future process will
be efficient considering that it has minimized time and will
reduce cost of operations.Reduction in overall cost will increase
the business profit margins.
Forecasting helps in taking proactive measures.
Helps to make logical decisions.
Helps to cut business costs.
*
Summary Ultimately a process improvement process aims at
improving results. Apparently improving results is a
challenging tasks for project managers.As such, leaders needs a

proven methodology to help accomplish set goals and
objectives. Using six Sigma roadmap managers are able to
improve results. The first step is to set the project up for
successMeasure the current baseline for the process- data
collection is necessary at this point. Analyze the root cause of
the problem- In regard to the bank time completion and costly
process are the major problems. Understanding what needs to
change- Make the process more efficient. Understand how to
maintain the process- In this case it should be done through data
collection and conducing surveys to understand customers
feelings and satisfaction. The ultimate goal of the improved
process is to reduce the time the bank takes to process loan to
book (Wang, Ashfaq & Fu, 2015).
The new process also hopes to increase efficiency Reduce
unnecessary costs
*
References Wang, X. Z., Ashfaq, R. A. R., & Fu, A. M. (2015).
Fuzziness based sample categorization for classifier
performance improvement. Journal of Intelligent & Fuzzy
Systems, 29(3), 1185-1196.Davenport, T. H. (2015). Process
management for knowledge work. In Handbook on Business
Process Management 1 (pp. 17-35). Springer, Berlin,
Heidelberg.Taylor, S. J., & Letham, B. (2018). Forecasting at
scale. The American Statistician, 72(1), 37-45.
Project Management
Agenda
Introduction
Problem Definition

Customer surveys
Data Gathering
Plant tours/audits
Data Analysis and
Solution
Development
Statistical tools
Cost Impact and Payoff Analysis
Decision trees
Implementation
Responsibility charts
References
Ralph Lauren Corporation
A global leader in the apparel
Also in designing, marketing and distributing premium lifestyle
products
The company has experienced challenges with regard to its
operating model and therefore experiencing poor performance
levels.

Introduction
Ralph Lauren Corporation was started in 1967 with just men’s
ties. Now it’s a global leader in the apparel especially in
designing, marketing and distributing premium lifestyle
products. The company has experienced challenges with regard
to its operating model and therefore experiencing poor
performance levels.
3
Problem Definition
Excess Inventory Problems
The lead-time for production and delivery of products
Approximately 15 months
Problematic
leads to mismatch between supply and demand
Lacks a centralized system of controlling inventory and
optimization
Led to an inventory growth of 26% against a 7% growth in sales
Discounting and transfers to outlets have resulted in extra costs
and lower profit margins
The lead-time for production and delivery of products is

approximately 15 months which is very long. This is
problematic because it leads to a mismatch between supply and
demand at the time the products are available for consumption.
In addition, the company lacks a centralized system of
controlling inventory and optimization. This has led to an
inventory growth of 26% against a 7% growth in sales for the
past three years. Moreover, discounting and transfers to outlets
have resulted in extra costs and lower profit margins.
4
Reduced focus on core brand strength
Ralph Lauren, Polo, and Lauren
account for a vast majority of the brand strength and
performance
30% of the styles make up 70% of the business while 65% of
the styles are considered unproductive
Developing a transformational plan, to
Streamline operations and raise the operations margins
Problem Definition (cont)
The company’s three core brands are Ralph Lauren, Polo, and
Lauren. They account for a vast majority of the brand strength
and performance. However, 30% of the styles make up 70% of

the business while 65% of the styles are considered
unproductive. The company is therefore in the process of
developing a transformational plan to streamline operations and
raise the operations margins by end of the financial year 2019.
For the plan to succeed the company needs to adopt important
items from the operations toolkit for supply chain management.
5
Customer survey
Customers form the bedrock of the business
Conduct an extensive customer survey to understand several
things
First, understand who its customers are
How and where to reach them effectively
Secondly, provide insight on changing demand patterns
Explain reasons for low sales and identify potential gaps within
the market
Finally, identify idle products
Channel resources to more in demand products.
Since customers form the bedrock of the business or rather
determine the success of the business. Ralph Lauren needs to
conduct an extensive customer survey to understand several

things. First, the company needs to understand who its
customers are and how and where to reach them effectively.
Secondly, a customer survey will provide insight on changing
demand patterns, explain reasons for low sales and identify
potential gaps within the market. Finally, a customer survey
will help the company identify idle products and channel
resources to more in demand products.
6
Gathering Data
To effectively understand the extent of the problems
Plan or make decisions on the most needed transformations
Collect data on all its processes, employees, inventory, costs
and organizational structure
Data collection is very important and serves various purposes
Provides a basis for decision making
Identify the exact value of its problems and their underlying
causes
Gathering data is to effectively understand the extent of the
problems facing the company and plan or make decisions on the

most needed transformations.The company needs to collect data
on all its processes, employees, inventory, costs and
organizational structure. Data provides a basis for decision
making. It also enables the company identify the exact value of
its problems and their underlying causes.
7
Plant tours/Audits
Conduct an extensive audit of all its warehouses and stores
Identify all inventories held
Analysis actual costs associated with holding the inventory
Enables the company to segment or categorize inventory stocks
Idle inventory, fast moving and moderately moving inventory
Focus on reducing or doing away with some of its inventory
lines
Low demand or even the costly inventory lines in terms of
storage and cost.
The company needs to conduct an extensive audit of all its
warehouses and stores to identify all inventories held and the
actual costs associated with holding the inventory.This is a very
useful exercise as it enables the company to segment or

categorize inventory stocks into idle inventory, fast moving and
moderately moving inventory. Once this is done the company
can now focus on reducing or doing away with some of its
inventory lines especially those that have low demand or even
the costly inventory lines in terms of storage and cost.
8
Data Analysis and

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