Case Study: Excel Logistics Services

Quality Management Assignment

Under Guidance of Prof Dr. G Anand

Group No : 5
EPGP-11-088 Rahul Mallick
EPGP-11-098 Rishabh Verma
EPGP-11-097 Retee Adak
EPGP-11-076 Pooja Roy
EPGP-11-077 Prakash Kumar
EPGP-11-026 Biswajit Prusty
Question – 1
Help Stalk organize the data by preparing a run chart.
The run chart shown below displays all different types of errors from 06/01/94 - 07/14/94.
There are a couple fluctuations can be observed, such as other errors and slotter errors. For
example, the peak of other errors was at 06/11/94, reaching at 22, and the number of other
errors dropped dramatically from 06/13/94 to 06/17/94, which was at 0/ It can also be
noticed that each of ITR ADJ errors and Putaway errors demonstrated a fairly steady trend
and accounts for a small amount of number. Since the integrated run chart does not show
the centerline of each category (average), we decided to breakdown the categories and
create a run chart for each corresponding category in order to further explore the data. All
the charts are shown as below:
The overall
performance of
Receiving Process is
briefly tabulated here
 Number of errors

10
15
20
25
30

0
5
01/Jun
01/Jun
01/Jun
01/Jun
01/Jun
01/Jun
01/Jun
01/Jun
01/Jun
01/Jun
01/Jun
01/Jun
01/Jun
01/Jun
01/Jun
01/Jun
01/Jun

Dates
01/Jun
01/Jun
01/Jun
01/Jun
01/Jun
01/Jun
01/Jun
01/Jun
01/Jun
01/Jun
Run chart on total number of errors

01/Jun
01/Jun
01/Jun
01/Jun
01/Jun
01/Jun
01/Jun
Over all total errors
Brekpack Total erros
Full-case total errors
 Run Chart for Overall Performance Other Errors Run Chart for Overall Performance Letdown
Errors
25 6

Letdown Errors
Other Errors

20 4
15
Number of Other 2
10 Number of Letdoen
Errors 0
5 Errors

1-Jun
1-Jun
1-Jun
1-Jun
1-Jun
1-Jun
1-Jun

1-Jun
1-Jun
1-Jun
1-Jun
1-Jun
0

1-Jun

1-Jun
1-Jun
1-Jun
1-Jun
1-Jun
1-Jun
1-Jun
1-Jun
1-Jun

1-Jun
1-Jun

1-Jun
1-Jun
1-Jun
Dates

Dates
Run Chart for Overall Performance ITR ADJ
Run Chart for Overall Performance Slotter Errors Errors
20
2.5

ITR ADJ Errors

2
Slotter Errors

15
Number of
1.5
10 Slotter
Errors 1
Number of ITR ADJ
5 0.5
Errors
0

1-Jun
1-Jun
1-Jun
1-Jun
1-Jun
1-Jun
1-Jun
1-Jun
1-Jun
1-Jun
1-Jun
1-Jun
0
1-Jun
1-Jun
1-Jun
1-Jun
1-Jun
1-Jun
1-Jun
1-Jun
1-Jun
1-Jun
1-Jun
1-Jun
1-Jun
1-Jun
1-Jun

Dates
Dates
Run Chart for Overall Performance Putaway
Run Chart for Overall Performance Keying Errors
7 Errors
6
5 10
Keying Errors

Putaway Errors

4 8
Number
6
3 of Keying
Errors 4 Number of Putaway
2 Errors
2
1
0
1-Jun
1-Jun
1-Jun
1-Jun
1-Jun
1-Jun
1-Jun
1-Jun
1-Jun
1-Jun
1-Jun
1-Jun
0
1-Jun
1-Jun
1-Jun
1-Jun
1-Jun
1-Jun
1-Jun
1-Jun
1-Jun
1-Jun
1-Jun
1-Jun
1-Jun

Dates
Dates
Question – 2
Prepare appropriate process control charts to see if the process is in control. Is the receiving
process in or out of control?
P-chart of overall performance:
n=800
k=45
∑ yi=655
Centerline= ∑ yi/(k*n) = 655/36000=0.0182

UCL= p  3s p =0.0182+3*sqrt(0.0182*(1-0.0182)/800)=0.032
LCL= p  3s p =0.0182-3*sqrt(0.0182*(1-0.0182)/800)=0.004
 p-chart for overall performance
0.035
Proportion of Total Errors in overall in 800 Sample Size

0.03

0.025

0.02
p
P_Bar(Avg of P)
0.015 UCL
LCL

0.01

0.005

0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46

Total Number of Error exceeding 2% = 14 (In sample size 45)

31.11% of errors exceeds 2% of in Total Receiving process errors
All values are between 0.004 and 0.032; process is under control, but there might be a
possibility of the points 15,16 and 17 following the pattern Western electric rules that 2 out of 3
points are below 2 standard deviation, but cannot be clearly inferred.

P-chart of module 1: breakpack items

UCL1=0.027+3*sqrt (0.027*(1-0.027)/400)=0.051

LCL1=0.027-3*sqrt (0.027*(1-0.027)/400)=0.003
 Total Errors in Breakpack

10
15
20
25
30

0
5
1-Jun
1-Jun
1-Jun
1-Jun
1-Jun
1-Jun
1-Jun
1-Jun
1-Jun
1-Jun
1-Jun
1-Jun
1-Jun
1-Jun
1-Jun
1-Jun
1-Jun

Dates
1-Jun
1-Jun
1-Jun
1-Jun
1-Jun
1-Jun
1-Jun
1-Jun
1-Jun
1-Jun
1-Jun
Run Chart for Module 1 (BreakPack) Performance

1-Jun
1-Jun
1-Jun
1-Jun
1-Jun
1-Jun
Series1
 p-chart for Breakpack(Module1)total Errors
0.07

0.06
Proportion of Total Errors in BreakPack in 400 Sample Size

0.05

0.04
P_Bar(Avg
of P)

0.03
UCL

0.02
LCL

0.01

0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46

Module 1 process is out of control as few points are exceeding UCL

Some data points are not between 0.003 and 0.051; process is not under control as we can
observe points outside the control limits.

P-chart of module 3: full case items

UCL3=0.0094+3*sqrt(0.0094*(1-0.0094)/400)=0.024
LCL3=0.0094-3*sqrt(0.0094*(1-0.0094)/400)=0
 Proportion of Total Errors in FullCase in 400 Sample
Size

Total Errors in Full-Case

10
15
20
25

0
5

0
0.01
0.03
0.04
0.05
0.06

0.02
0.07
1-Jun 1-Jun
1-Jun 1-Jun
1-Jun 1-Jun
1-Jun 1-Jun
1-Jun 1-Jun
1-Jun 1-Jun
1-Jun 1-Jun
1-Jun 1-Jun
1-Jun 1-Jun
1-Jun 1-Jun
1-Jun 1-Jun
1-Jun 1-Jun
1-Jun 1-Jun
1-Jun 1-Jun
1-Jun 1-Jun
1-Jun 1-Jun
1-Jun 1-Jun
Dates

1-Jun 1-Jun
1-Jun 1-Jun
1-Jun 1-Jun
1-Jun 1-Jun
1-Jun 1-Jun
1-Jun 1-Jun
1-Jun 1-Jun
p-chart for FullCase(Module3)total Errors

1-Jun 1-Jun
1-Jun 1-Jun
1-Jun 1-Jun
Run Chart for Module 3 (Full-case) Performance

1-Jun 1-Jun
1-Jun 1-Jun
1-Jun 1-Jun
1-Jun 1-Jun
1-Jun 1-Jun
After analyzing the above charts, we conclude that the process is not in control.

1-Jun 1-Jun
1-Jun 1-Jun
UCL
LCL 0
p value
p bar value
Series1
Question – 3
Customer service requirements determine that receiving process errors should never exceed 2
percent on any given day. What percentage of the days is likely to exceed 2 percent error, given
the current performance at receiving? Assume a total of 8,000 transactions per day, 4,000 in each
module.
655
µ = 36000 = 0.0182
2
x = 100 = 0.02

Now, the formula for calculating “s”

0.0182(1−0.0182)
s= = 0.00149
8000

𝑋− µ 0.02− 0.0182
Z= = = 1.21
𝑠 0.00149

P (Z <0.02) = 0.8869
P(Z>0.02) = 1 - P (Z <0.02) = 1 – 0.8869 =0.1131= 11.31%
Question – 4
For more than 99% to have less than 2% of process error:
For P(Z) = 0.99, we get the Z value to be 2.33
So,
𝑥ҧ − µ
Z= , where s= √(µ*(1- µ)/n)
𝑠

(0.02− µ)
2.33=
[√(µ∗(1− µ)/8000)]

µ =0.0167

As a result, it can be concluded that to ensure that 99% of the days have less than 2 percent error,
we need to reduce the average defective proportion from 0.0182 to 0.0167.

In addition, our group did a pareto diagram for different types of errors. From the Pareto chart
that is shown as below, it can be indicated that other error is the primary reason that causes
ineffectiveness, as it takes up the highest portion on the number of errors, which is approximately
around 36.95%. The second category is slotter error. As it can be inferred from the chart, slotter
error and other errors are the major causes. As other error takes the largest percentage of the total,
we suggest that Stalk could use a drill-down strategy to decrease minor errors that could happen
in the receiving process. After then, the company could focus on reducing errors in the slotter
function.
The same pattern can be observed when we look at each of the modules by their own. Slotter
and Others seems to be the two-main source of errors In particular, at module 3 Others is the
most frequent type of error which again suggest it should be broken down. However, the
main difference between the two modules seems to be with letdown type of errors which are
much more frequent at Module 1 than 3.
Question – 5
Can you think of a continuous improvement framework that Stalk can use as an engine to improve
performance in the receiving process and other processes at Springfield?
There are a lot of continues improvement processes available and most of them are based on the same
philosophy. However, a typical one for service delivery that can be used is the “model of service quality”,
also known as the Gaps model. The model of service quality identifies five gaps that may cause customers to
experience poor service quality.
Gap Brief description Recommendation for Stalk
Gap 1 Difference between the target market’s -Try to identify the severity of each of the errors.
The Knowledge Gap expected service and management’s -How much is the delay experiencing the customers?
perceptions of the target market’s expected
service.
Gap 2 Difference between management’s -Enabling a no ambiguity in the work role of employees would enable a
The standards Gap perceptions of customer expectations and more effective and efficient company culture
the translation into service procedures and -Investesting more time and resources on employee training program and
specifications quality planning and quality inspection.
Gap 3 Difference between service quality -Measuring the process KPI more frequently to check if process is in control
The Delivery Gap specifications and the service actually or not.
delivered -Digitization of the delivered goods would could, when implemented,
improve the performance of the organization. Specifically, technologies like
RFID or simple bar code scanning can be very useful helping to record all
delivered goods digitally and tracking them.

Gap 4 Difference between service delivery Clarifying differences in policies and procedures across branches or
The Communications Gap intentions and what is communicated to the divisions of the company.
customer In the event of a fault, notify the relevant customer quickly and send the
goods as soon as possible.

Gap 5 It is the only gap that can be directly
Customer satisfaction measured as the individual's perceptions of
given service minus the individual's
expectations of a given service. (Customer
perception – customer expectations or Gap
4 – Gap 1). This is when the cycle iterates
again.
Keep monitoring the customer satisfaction and managing how the process
can be improved. Also the use a of tracking system (like a CRM system) of
the customer satisfaction will be very useful in the implementation of a
continues improvement process.
Also, implementing policies when quality is not met is advisable, like a cost
reduction on the following delivery to increases customer loyalty.