[BUY] Touchstone 4: Write a Quality Improvement Plan (QIP)

Touchstone 4: Write a Quality Improvement Plan (QIP)

OVERVIEW: You will act as an operations consultant and will outline a Quality Improvement Plan (QIP) for a small company. The QIP will apply concepts learned in the tutorials to help PhonePro resolve issues in efficiency, supply chain flow, and remaining viable in a competitive field. Your QIP will include recommendations with specific steps and a timeline for implementation.

BACKGROUND: PhonePro is a company that designs and manufactures phone cases. Their biggest differentiator is in utility design, such as combining phone cases with other storage to replace wallets or handbags, and rugged cases for hiking and climbing. While their cases were popular for several years, they have noticed declining sales and an increase in customer returns, citing the fact the cases do not last more than a few months and are unable to handle extensive usage, which is particularly a problem since durability is a key selling point and is backed by a generous warranty.

• PhonePro is offered in dozens of colors, many of which do not sell well, resulting in a lot of unsold inventory. This is further complicated by the attempt by the company to have each style available for all popular phones and stay up to date with the specific sizes of Apple and Android models. At the same time, there is often a shortage of the most popular sizes and colors.
• Although they manufacture their products in Montana, they are dependent upon suppliers from Malaysia and Thailand for rubber and suppliers in China for high-quality silicone. Unreliability of these suppliers has disrupted production schedules. There is also varied quality of materials from these suppliers, leading to the variability in quality of the phone cases that has in turn led to many customer returns.
• PhonePro sells most of their phones through distributors, particularly a few high-volume chain retail stores like Walmart and Target and online retailers like Amazon. Regardless of the retailer, the phone cases sell at $24 each; PhonePro gets $16 per order with the rest going to the retailer.
• They have been inefficient in filling orders when they are placed, often lagging several days behind the order, and getting the phone cases to the distribution centers around the country. This is further affected by the extreme weather in Montana, where heavy snowfall can close roads and delivery routes for days.
• They position themselves as a “green” company but have a high amount of waste from their production process.
• Workers have a great deal of autonomy and task variability but are disorganized.

Further problems that are caused by the operations problems:

• Negative online reviews from customers, due to quality issues
• High employee turnover due to low morale

Address each of these operational elements for PhonePro below. Each major element should be a level one heading in your paper, with 2-3 paragraphs analyzing the problem and making your recommendations.

Part One: The Supply Chain

• How can PhonePro make their procurement of materials more reliable?
• How can PhonePro maintain and improve distribution?
• What inventory optimization strategies can improve efficiency during the manufacturing process?
• Name at least one recommendation in these areas that will solve a problem identified in the scenario, using the concepts in the tutorials and performing calculations when necessary.

See Fluctuations in the Supply Chain.

Part Two: Production Efficiency

• What are the utilization and efficiency of PhonePro, based on these figures?
  • Their average is 25,000-30,000 units per month.
  • Operating at full capacity around the clock, their facilities are capable of producing 40,000 units per month.
  • Based on staffing hours, maintenance needs, and other mitigating factors, they can realistically produce 32,000 units per month. If they could solve other logistical problems, they feel they could sell that many without either backlog of inventory or unmet demand.
• What factors from the scenario may be leading to the inefficiency?
• What measures could they take to anticipate and meet demand given the challenges of the market? Recommend one or more manufacturing models or concepts from the tutorials, such as Lean, Six Sigma, and TQM. Give specific aspects of any model you recommend and how it will help with the specific problems identified above.
• In all, there should be three specific recommendations of changes to their process; these may be all part of one model or taken from different models, as long as there are three specific recommendations that would work well together.

See Challenge 3.1, Manufacturing Models, and Challenge 4.1, Methods of Quality Control.

Part Three: Cost-Volume-Profit Analysis

Based on the information below, calculate the variable and fixed costs at their current location. See Location Planning and Analysis for detailed instruction and an example.

• Remember that PhonePro sells between 25,000-30,000 units a month at a retail price of $24. The retailer gets $8 of this, and PhonePro collects $16.
• Materials cost 30% of the retail cost, or an average of $7.20 per unit.
• They have 18-20 workers on the factory floor who are paid hourly, dependent on production. These workers make an average of $13/hour, and the facilities are in