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Exercise

PDI is a package delivery service that offers pickup and delivery within a 15-minute window for a fee. However, customers have complained about deliveries not meeting this window 20% more in the last 6 months. The problem is that PDI's current dispatch procedures aim for 30 minutes of travel time one way, but this sometimes results in delays over 45 minutes qualifying for rebates, or idle time under 30 minutes for field operators. While customers appreciate rebates, they prefer deliveries within the promised 15-minute window.

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184 views3 pages

Exercise

PDI is a package delivery service that offers pickup and delivery within a 15-minute window for a fee. However, customers have complained about deliveries not meeting this window 20% more in the last 6 months. The problem is that PDI's current dispatch procedures aim for 30 minutes of travel time one way, but this sometimes results in delays over 45 minutes qualifying for rebates, or idle time under 30 minutes for field operators. While customers appreciate rebates, they prefer deliveries within the promised 15-minute window.

Uploaded by

Pulak
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Exercise: Problem Statement

Please refer to the case study given below and construct a Problem Statement for the
situation described in the case study.
Case Study: Precision Delivery Inc.
Precision Delivery Inc. (PDI) is a package pickup and delivery service for homes and small
businesses. PDI specializes in packages 50 pounds or less and has a full-price rebate policy
for any pickup or delivery made outside the customer-designated 15-minute window. PDI
advertising proudly states, “Pick-up and delivery at your convenience, not ours.”
PDI has facilities at 2 locations, Downtown and Suburbia, each servicing customers within
a 15-mile radius with pickup and deliveries made by truck or bicycle. Customers designate
a 15-minute window for their packages to be picked up or delivered. PDI charges
customers $5 per package plus $1 per pound (50-pound maximum).
PDI Sales Operators receive pickup and delivery requests by phone from customers.
Dispatchers issue instructions to Field Operators for pickups and deliveries. To ensure
prompt service, Dispatchers plan for 30 minutes of travel time, one way, for each pickup
or delivery and target arrival time for the start of the 15-minute window. Under current
procedures, travel time in excess of 45 minutes will result in a rebate and travel time less
than 30 minutes results in idle time for the Field Operator. Field Operators return directly
to the dispatch facility after each pickup or delivery.
PDI pays a subcontractor who offers bike and truck time on demand, only for round-trip
road time and idle time at the customer destination. PDI accountants have calculated the
Field Operations variable cost for delivery, pickup, and idle time at $7.50/hour for bicycles
and $15.00/hour for trucks. All other costs are fixed at $5,000 per week. Pickups and
deliveries are made Monday through Friday, 8:00 a.m. to 4:00 p.m.
Over the last six months, Sales Operators have reported a 20% increase in customer
concern for the timeliness of deliveries and pickup. In response, Sales Operators were
instructed to remind customers of the PDI price rebate policy. Additionally, a short survey
was sent out to a small group of established customers. Survey results disclosed an
appreciation of price rebates, but a preference for deliveries within the promised 15-
minute window.

Same Case Study is used to create the SIPOC for the package delivery or
pick up process.
Exercise: COPQ
Please refer to the case study given below and identify the various Failure Costs along with their
respective categories:
Case Study: Team Training, Inc.
Team Training, Inc (TTI) provides training services to a wide variety of service and
manufacturing companies. The person who answers the phone at TTI doesn’t have the time or
knowledge to answer questions from callers. He transfers each caller to the appropriate
person. Often, the “appropriate person” is not in the office. Some clients or potential clients
hang up rather than leave voice mail messages because they need information right away.
TTI’s marketing representative prepares a contract to be signed by the client requesting the
training. Several iterations of the contract are often needed until, finally, the contract matches
the customer’s needs. Every version of the contract is proofread by a TTI clerk before mailing it
to the client.
Occasionally, a TTI representative misinterprets a client’s needs. In these cases, the training
misses the mark and the client is not pleased.
It is difficult to reach people at the client organizations. So, the TTI materials representative
estimates the number of course manuals needed for a given training session. Of course, she
over-estimates to make sure everyone has a manual. Rush print jobs and overnight shipments
of manuals are routine.
List of Failure Costs:

Description of the Failure Category of Failure Cost

1. The person who answers the phone


at TTI doesn’t have the time or
External Failure Cost
knowledge to answer questions from
callers

2. Often, the “appropriate person” is


Internal Failure Cost
not in the office.

3. Some clients or potential clients


hang up rather than leave voice mail
External Failure Cost
messages because they need
information right away.
4. Several iterations of the contract are
often needed until, finally, the
Appraisal Cost and Internal Failure Cost
contract matches the customer’s
needs.
5. Every version of the contract is
proofread by a TTI clerk before Appraisal Cost
mailing it to the client.

6. Occasionally, a TTI representative


Internal Failure Cost
misinterprets a client’s needs.

7. Training misses the mark and the


External Failure Cost
client is not pleased

8. TTI materials representative


estimates the number of course
Internal Failure Cost
manuals needed for a given training
session

9. Of course, she over-estimates to


Prevention Cost
make sure everyone has a manual

10. Rush print jobs and overnight


Internal Failure Cost
shipments of manuals are routine.

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