Case 2- Tip Top Market

Cam Thi Vu

Due date: 12 March, 2017

BSM 405

Submitted to

Prof. Mike Witiw

I. Executive summary

1. Case problems
A large number of complaints from customers was received in our store. These complaints cover
a broad range of areas such as customer service, checkout logistic or store atmosphere.
2. Case outline
Every Tuesday for nine weeks, Tip Top Market diligently recorded all of the complaints or
comments sent in by customers. There were a total of 184 complaints on those nine Tuesdays
On July 15th, several changes were implemented to reduce out- of-stock issues, improve store
maintenance and reduce checkout lines and pricing problems but no improvement was reflected.
3. Recommendations
Out-of-stock problem
- Implementing a perpetual inventory system and creating Point of sale system
- Building forecast model
Store maintenance problems
- Periodically upgrade and maintain equipment in the store such as air conditioner, shopping cart,
ATM and make sure to keep the store clean.
- Arrange and reposition the stalls more reasonable so that customers can easily find the goods.
Food quality problems
- Find reliable suppliers for raw material.
- Regularly checking expired date and review the process of preserving food
Employees behavior
- Provide training courses for employees.
Pricing problems
- Price adjustment and sales promotion
Checkout problems
- Provide training course for cashiers to work more efficient.
- Set up new checkout counters

II. Data analysis

1. Check sheet analysis
Complaints Date
June June 8 June June June July 6 July July July
1 15 22 29 13 20 27
1 Out of stock II IIII III IIII IIII I IIII IIII II IIII IIII
IIII IIII III IIII II
2 Food IIII II IIII II IIII I IIII II I
quality
problems
3 Store III IIII III III III IIII II IIII IIII IIII
maintenance IIII
problems
4 Employees II I I I I I
behavior
5 Pricing III III IIII II I II III IIII III I
problems
6 Hard to find II I III I I
thing
7 Checkout II II I III I II II
problems

The check sheet gives information about the number of complaints from customers every

Tuesday from June 1st to July 27th. As can be seen from the check sheet, there was a

considerable increase in the complaint about out-of-stock problem. It started with only two

complaints to 12 complaints from June 1st to July 27th. Conversely, complaints about food

quality tended to decrease over the following weeks. Complaint about food quality problem

accounted for the highest number in the first week of seven claims, but until July 13th, there was

no complaint about this issue anymore. Then, store maintenance seems to appear as a serious

problem with our supermarket. We always get at least three complaints per day about this

problem. Other issues still receive complaints every week, and there is no sign of decline.
As mentioned above, there were changes applied on July 15 to reduce out-of-stock

complaints, improve store maintenance, and reduce checkout lines and pricing problems.

However, it seems that these changes have not worked to reduce the claim. Out-of stock

complaints still rose every week, and complaints about long waiting lines at checkout and pricing

issues still received regularly. Therefore, new strategies are needed to improve these situations.

For example, we should consider adjusting the price of some products to stimulate shopping or
set up new checkout counter to reduce the waiting line. Besides, a training course for all

employees is needed. Employees must understand about customer communication and always

ready to support customers when they cannot find things.

2. Pareto diagram analysis

70 100.00%

90.00%
60
80.00%
50 70.00%

60.00%
40
50.00%
30
40.00%
Frequency
20 30.00% Cumulative percentage
20.00%
10
10.00%

0 0.00%

The Pareto diagram shows the relative frequency causes of complaints of customers in

our supermarket. Applied 20:80 rule, it is clear from the diagram that out-of-stock issues, store

maintenance and food quality problem are having the most significant effect on customer

dissatisfaction. The other categories have trivial effect. Therefore, if we concentrate our effort in

the top three categories, then we could be able to reduce 80 % of complaints. However, as

mentioned in check sheet analysis, complaints about the food quality problem are on downward

trend. Thus, we just need to maintain this situation and focus on out-of-stock and store
maintenance issues to decrease 60% of complaints. We need to solve these problems as soon as

possible because these problems can have lasting consequences concerning customer loyalty and

lifetime value.

As mentioned from above, to improve out-of- stock problem, perpetual inventory system

and Point of sale system are needed. Once these systems are implemented, goods will be ordered

as they are sold. It also allows managers to observe the trend in the market and be able to store

goods that have high demand in their area. Thus, it helps reduce paperwork so managers can

focus on different tasks. Besides, managers should create a forecast model in order to look at past

data of sale and easier to determine which goods are needed to order.

Additionally, the store should regularly be maintained. Many customers complain that

our store is too hot or too cold. Therefore, the air conditional should be repaired or replaced. The

second most complaint about this problem is about the hygiene of the store. We should consider

hiring more sanitation staffs. If we already have enough staff, I recommend opening training

courses for them to work more efficiently and savings cost. Besides, shelves should also be

rearranged to help customers find items easier. We can sort goods by different category to solve

this problem. Moreover, music played in the store also needs to be changed to stimulate shopping

and not cause discomfort to customers.

3. Run chart analysis

 Number of complaints
25

20

15
Number of complaints
10

The run chart shows figures for number complaint during the period from June 1st to July

27th. As we can see from the chart, the numbers of complaints from customer fluctuate slightly

around 20 complaints per day. There is no sign that the changes applied on July 15 reflected

improvement. Therefore, the similar level of complaints will continue in the future until more

focused and efficient strategies are implemented.

III. Attachments

1. Information for check sheet

 2. Calculation for Pareto diagram

Complaints Frequency Cumulative Cumulative

frequency percentage
Out of stock 61 61 33.15%
Store maintenance 41 102 55.43 %
problems
Food quality 27 129 70.11%
problems
Pricing problems 27 156 84.78%
Checkout problems 13 169 91.85%
Hard to find thing 8 177 96.20%
Employees behavior 7 184 100%
184

3. Calculation for Run chart

Date Number of complaints

June 1st 21
June 8th 20
June 15th 23
June 22nd 18
June 29th 18
July 6th 22
July 13th 19
July 20th 22
July 27th 22