EXECUTIVE SUMMARY

CP Optics is a nationwide distributor of luxury eyewear brands in the Philippines

from suppliers worldwide. The company’s main objective is to provide accessible

eyewear of the highest quality for our customers who, they feel, deserve the best.

Encoding error rates, late deliveries, quantity of non-moving inventory, and

returns due to incorrect order content and damages were measured and assessed in the

situation appraisal. Upon conducting a criterion analysis with potential losses and growth

rate as the criterion, the most significant problem found in CP Optics was determined to

be the encoding error rate. The encoding error rate deviated from the allowable target by

0.64%, which led to the mispricing of goods and was calculated to have an average

approximate loss in sales of P82,083.33 monthly.

The group then conducted interviews, experiments and observations with the

management to identify and validate root causes. Among the 8 root causes identified, 5

were validated namely eyewear attributes that are difficult to distinguish, insufficient

lighting conditions, poorly planned mental workloads for encoders, lack of standardized

coding procedures, and unqualified encoders.

The solutions generated for each root cause were evaluated using Kepner Tregoe

decision tree analysis where comparisons of solutions were made based on encoder

acceptance, Implementation and Operating costs and implementation time. The solutions
2
that are suggested are visual eyewear attribute guides, light replacement in the facility, a

scheduling system for encoders, an official manual and visual poster for the encoding

procedure, a performance tracking quality assurance procedure, and the redistribution of

eyewear based on encoder qualifications.

The proposed implementation plan follows 5 phases namely, (1) Solution

Presentation, (2) Preparation phase, (3) Solution Testing and Evaluation, (4) Overall

System Implementation, and (5) Evaluation. The system implementation is expected to

take 95 days thus, if the starting date of January 8, 2024 is to be implemented then the

projected completion date is April 12, 2024.

3
 TABLE OF CONTENTS

CHAPTER I: PROBLEM AND ITS SETTING 21

1.1. Company Profile 21
1.1.1. History of the Company 21
1.1.2. Company Objectives 22
1.1.2.1. Company Commitment 22
1.1.2.2. Company Vision 23
1.1.2.3. Company Mission 23
1.1.2.4. Brand Motto 23
1.1.2.5. Core Values 23
1.1.3. Nature of the Business 24
1.1.3.1. Products 24
1.1.3.2. Clients 25
1.1.4. Organizational Structure 26
1.1.4.1. Organizational Chart 26
1.1.5. Area of Concern 26
CHAPTER II: PRESENT SYSTEM 27
2.1. System Limits 27
2.1.1. Spatial Scope 27
2.1.2. Temporal Scope 29
2.1.3. Magnitudinal Scope 29
2.2. System Objectives 29
2.3. Partitioning and Linkages 33
2.3.1. Man 33
2.3.1.1. Job Roles 33
2.3.1.2. Wages 40
2.3.1.3. Working Shift 41
2.3.2. Material 41
2.3.2.1. Products 41
2.3.2.2. Classification of Products 42
2.3.2.3. Packaging 43
2.3.2.4. Documents 44
2.3.3. Machine 47
2.3.4. Information System 48
2.3.5. Method 52
2.3.5.1. Receiving 52
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 2.3.5.2. Inspection 57
2.3.5.3. Encoding 61
2.3.5.4. Stocking and Storing 66
2.3.5.5. Loading 69
2.3.5.6. Delivery 75
2.3.5.7. Returns 78
2.3.6. Warehouse Layout 81
CHAPTER III: SITUATION APPRAISAL 85
3.1. Strengths 87
3.2 Weaknesses 90
CHAPTER IV: PROBLEM ANALYSIS 96
4.1. Problem Prioritization 96
4.1.1. Shortlisting of Problems 96
4.1.2. Summary of Shortlisted Problems 99
4.1.3. Problem Criteria Analysis 100
4.1.3.1. Seriousness (80%) 100
4.1.3.2. Growth (20%) 101
4.1.4. Problem Evaluation 102
4.2. Problem Statement 109
4.3. Problem Analysis 109
4.3.1. Initial Stream Diagnosis 111
4.3.2. Cause Validation 113
4.3.2.1. Data Input 113
4.3.2.1.1. Eyewear Attributes are Difficult to Distinguish 113
4.3.2.2. Environmental Factors 115
4.3.2.2.1. Insufficient Lighting Conditions 115
4.3.2.2.2. Excessive Noise Distracts Workers 119
4.3.2.2.3. Encoding Workstation is Not Ergonomic 123
4.3.2.2.4. Mental Workloads are Poorly Planned 126
4.3.2.3. Information 128
4.3.2.3.1. Difficulty in Differentiating Code 128
4.3.2.3.2. Lack of Standardized Encoding Procedure 131
4.3.2.4. Man 147
4.3.2.4.1. Some Encoders are Unqualified 147
4.3.3. Final Stream Diagnosis 149
4.3.4. Percent Contribution 152

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CHAPTER 5: SOLUTION DESIGN 155
5.1. Objectives of the Solution 155
5.1.1. General Objective 155
5.1.2. Specific Objectives 155
5.2. Generation and Evaluation of Alternative Systems 155
5.2.1. Criteria for Evaluation of Alternative Solutions 156
5.2.1.1. Musts 156
5.2.1.2. Wants 157
5.2.2. Generation of Alternative Solutions 162
5.2.2.1. Alternative Solutions for Eyewear Attributes are Difficult to
Distinguish 163
5.2.2.2. Alternative Solutions for Insufficient Lighting Conditions 170
5.2.2.3. Alternative Solutions for Mental Workloads are Poorly Planned 179
5.2.2.4. Alternative Solutions for Lack of Standardized Encoding Procedure
188
5.2.2.5. Alternative Solutions for Some Encoders are Unqualified 198
5.2.3. Summary of Chosen Solutions 204
CHAPTER 6: PROPOSED SYSTEM 206
6.1. Revised System Overview 206
6.1.1. Partitioning by Man 209
6.1.1.1. Head Encoder 209
6.1.1.2. Irregular Encoder 211
6.1.2. Partitioning by Material 212
6.1.2.1. Eyewear Attribute Guides 213
6.1.2.2. Schedule with Appropriate Breaks 214
6.1.2.3. Official Written Manual 215
6.1.2.4. Encoding Procedure Visual Poster 217
6.1.3. Partitioning by Machine 219
6.1.4. Partitioning by Information System 220
6.1.4.1. Microsoft Excel 220
6.1.5. Partitioning by Method 222
6.1.5.1. Quality Assurance Procedure 222
6.1.5. Partitioning by Warehouse Layout 225
6.1.5.1. Lighting 225
6.2. Solution Evaluation 231
6.2.1. Integrated Cost Benefit Analysis 231
6.2.2. NPV Analysis 236

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 6.2.3. Safety and Health Compliance 237
6.2.4. Professional and Ethical Compliance 237
6.2.5. Risk Analysis 240
CHAPTER 7: IMPLEMENTATION PLAN 245
7.1. Implementation Plan 245
7.1.1. Phases of Implementation Plan 245
7.1.2. RACI 247
7.1.3. Implementation Plan Gantt Chart 250
REFERENCES 252
APPENDICES 256
Appendix A: Receiving Process Document 256
Appendix B: Sample Luxury Eyewear 257
Appendix C: Stocking and Storing Process Document 258
Appendix D: Loading Process Document 260
Appendix E: Delivery Process Document 261
Appendix F: Return Process Document 262
Appendix G: Warehouse Shelves 263
Appendix H: Excessive Noise Survey Data 265
Appendix I: Insufficient Lighting Survey Data 268
Appendix J: RULA Worksheet 271
Appendix K: Controlled Experiment Results (Without Time Limit) 273
Appendix L: Controlled Experiment Results (With Time Pressure) 285

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 LIST OF TABLES

CHAPTER 2: PRESENT SYSTEM

2.1 List of Specific Objectives, KPIs, and Formulas

2.2a List of Job Roles and their Descriptions

2.2b List of Job Roles and their Descriptions

2.3 Summary of Wages for Regular Workers

2.4 Summary of Contribution of Each Level

2.5 Summary of Packaging Materials

2.6a Summary of Documents Utilized in Warehouse Activities

2.6b Summary of Documents Utilized in Warehouse Activities

2.6c Summary of Documents Utilized in Warehouse Activities

2.7 Summary of Machines used in CP Optics

2.8 Play Script of the Receiving of Goods for Sale

2.9 Play Script of the Inspection Process

2.10 Play Script of the Encoding Process

2.11 Play Script of the Stocking and Storing Process

2.12 Play Script of the Loading Process

2.13 Play Script of the Delivery Process

2.14 Play Script of the Return Process

CHAPTER 3: SITUATION APPRAISAL

3.1 Comparison Between Monthly Targets and Actual Performance per KPI

8
3.2a Summary of SW Analysis

3.2b Summary of SW Analysis

3.3 Number of Orders, Late Delivery Frequency, and Late Delivery Rate per Month

3.4 Count of Returns due to Wrong Item Quantity/Type

3.5 Quantity of Received Items for Non-Luxury and Luxury Eyewear

3.6 Encoding Error Rate of Non-Luxury and Luxury Items

3.7 Count of Returns due to Damages

3.8a Summary of Quantity of Items Left in Storage for 6+ Months Based on Model

Together with its Selling Price

3.8b Summary of Quantity of Items Left in Storage for 6+ Months Based on Model

Together with its Selling Price

CHAPTER 4: PROBLEM ANALYSIS

4.1 Shortlisting of Weaknesses

4.2 Shortlisted Problems

4.3 Seriousness Criteria Scale

4.4 Growth Criteria Scale

4.5a Problem Evaluation Summary

4.5b Problem Evaluation Summary

4.6 Approximate Losses from Encoding Errors for Non-Luxury and Luxury Items

4.7 Summarized Growth Data Metrics for Weakness 1

4.8 Summary of Approximate Losses for Damaged Returned Items

4.9 Summarized Growth Data Metrics for Weakness 2

9
4.10 Steps for Validation Procedure of Eyewear Attributes are Difficult to Distinguish

4.11 Breakdown on Style Error, Color Code Error, and Size Error

4.12 Steps for Validation Procedure of Insufficient Lighting Conditions

4.13 Breakdown of Light Levels (lx) in the Encoding Workspace

4.14 Steps for Validation Procedure of Excessive Noise Distracts Workers

4.15 Breakdown of Noise Levels (dBA) in the Encoding Workspace

4.16 Steps for Validation Procedure of Encoding Workstation is Not Ergonomic

4.17 Breakdown of RULA Score for Each Encoder

4.18 Steps for Validation Procedure of Mental Workloads are Poorly Planned

4.19 Breakdown of NASA TLX Score for Each Encoder

4.20 Steps for Validation Procedure of Difficulty in Differentiating Code

4.21 Breakdown of Brand Code Error and Item Code Errors

4.22 Steps for Validation Procedure of Lack of Standardized Encoding Procedure

4.23 Frequency of Errors Between Old Eyewear and New Eyewear

4.24 Steps for Validation Procedure of Some Encoders are Unqualified

4.25 Frequency of Errors Between Regular Encoders and Irregular Encoders

4.26 Summary of Validated and Invalidated Probable Causes

4.27 Summary of Root Cause Assignability

4.28 Breakdown of Error Classifications Categorized Under RC1 to RC3

CHAPTER 5: PRESENT SYSTEM

5.1 High Level Requirements (Musts) for Solution Evaluation Criteria

5.2 Summarized Wants Criteria

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5.3a Summary Table for Results of Encoder Acceptance Score for All Alternative

Solutions

5.3b Summary Table for Results of Encoder Acceptance Score for All Alternative

Solutions

5.4 Solution Prioritization Based on Encoder Acceptance Score

5.5 Solution Prioritization Based on Implementation Costs

5.6 Solution Prioritization Based on Operating Costs

5.7 Solution Prioritization Based on Period of Implementation

5.8a Summary of Alternative Solutions

5.8b Summary of Alternative Solutions

5.9 Operating Cost, Implementation Cost, and Implementation Time Breakdowns for

Alternative Solution 1

5.10 Operating Cost, Implementation Cost, and Implementation Time Breakdowns for

Alternative Solution 2

5.11 Operating Cost, Implementation Cost, and Implementation Time Breakdowns for

Alternative Solution 3

5.12 KTDA for Alternative Solutions on Eyewear Attributes are Difficult to Distinguish

5.13 Operating Cost, Implementation Cost, and Implementation Time Breakdowns for

Alternative Solution 1

5.14 Summary of the Properties of LED and Fluorescent Tube Lights

5.15 Summary of LED Light Requirements

5.16 Operating Cost, Implementation Cost, and Implementation Time Breakdowns for

Alternative Solution 2
11
5.17 Operating Cost, Implementation Cost, and Implementation Time Breakdowns for

Alternative Solution 3

5.18 KTDA for Alternative Solutions on Insufficient Lighting Conditions

5.19 Original 9-Hour Shift Schedule of Encoders

5.20 Recommended 9-Hour Shift Sample Schedule of Encoders

5.21 Operating Cost, Implementation Cost, and Implementation Time Breakdowns for

Alternative Solution 1

5.22 Operating Cost, Implementation Cost, and Implementation Time Breakdowns for

Alternative Solution 2

5.23 Operating Cost, Implementation Cost, and Implementation Time Breakdowns for

Alternative Solution 3

5.24 KTDA for Alternative Solutions on Mental Workloads are Poorly Planned

5.25 Operating Cost, Implementation Cost, and Implementation Time Breakdowns for

Alternative Solution 1

5.26 Operating Cost, Implementation Cost, and Implementation Time Breakdowns for

Alternative Solution 2

5.27 Operating Cost, Implementation Cost, and Implementation Time Breakdowns for

Alternative Solution 3

5.28 Operating Cost, Implementation Cost, and Implementation Time Breakdowns for

Alternative Solution 4

5.29 KTDA for Alternative Solutions on Lack of Standardized Encoding

5.30 Operating Cost, Implementation Cost, and Implementation Time Breakdowns for

Alternative Solution 1
12
5.31 Operating Cost, Implementation Cost, and Implementation Time Breakdowns for

Alternative Solution 2

5.32 Operating Cost, Implementation Cost, and Implementation Time Breakdowns for

Alternative Solution 3

5.33 KTDA for Alternative Solutions on Some Encoders are Unqualified

5.34a Summary of Chosen Solution Alternatives

5.34b Summary of Chosen Solution Alternatives

5.35 Applicability of Chosen Solutions to Validated Root Causes

CHAPTER 6: PRESENT SYSTEM

6.1 Summary of Root Causes and Proposed Solutions

6.2a Comparison of Current and Proposed Manpower

6.2b Comparison of Current and Proposed Manpower

6.3 Proposed Outline of the Official Written Manual

6.4 Comparison of Current and Proposed Material

6.5 Comparison of Current and Proposed Machine and Equipment

6.6 Comparison of Current and Proposed Method

6.7 Comparison of Current and Proposed Layout

6.8a Summary of Comparison for Current and Proposed System

6.8b Summary of Comparison for Current and Proposed System

6.8c Summary of Comparison for Current and Proposed System

6.9 Summary of Costs and Benefits Involved in the Proposed System

13
6.10 Benefit Breadown from the Implementation of Official Manual, Visual Poster, and

Quality Assurance Procedure

6.11 Benefit Breadown from Excluding Irregular Encoders from Encoding “New”/

Unregistered Pieces of Eyewear

6.12 Summary of Implementation and Annual Operating Costs

6.13 Cost Benefit Analysis

6.14 Risk Assessment Matrix

6.15a Potential Problems and their Risk Scores

6.15b Potential Problems and their Risk Scores

6.16a Potential Causes of the Problems and their Preventive and Corrective Actions

6.16b Potential Causes of the Problems and their Preventive and Corrective Actions

CHAPTER 7: IMPLEMENTATION PLAN

7.1 Phases of Implementation Plan

7.2 RACI Matrix Legend

7.3 RACI Matrix for Proposed System Implementation

14
 LIST OF FIGURES

CHAPTER 1: PROBLEM AND ITS SETTING

1.1 Company Logo of CP Optics

1.2 Organizational Chart of CP Optics

CHAPTER 2: PRESENT SYSTEM

2.1 Top View of the Main Warehouse and Office of CP Optics

2.2 Street View of the Main Warehouse and Office of CP Optics

2.3 Man Organization Chart of CP Optics

2.4 Gateway of Tally

2.5 Inventory Information in Tally

2.6 Stock Item List in Tally

2.7 SIPOC for the Receiving Process

2.8a Receiving Process Swimlane Diagram Part 1

2.8b Receiving Process Swimlane Diagram Part 2

2.9 SIPOC for the Inspection Process

2.10a Inspection Process Swimlane Diagram Part 1

2.10b Inspection Process Swimlane Diagram Part 2

2.11 Sample Barcode and Product Code for Brand Silhouette (Left) and Baldessarini

(Right)

2.12 Sample Barcode and Product Code for Silhouette

2.13 SIPOC for the Encoding Process

15
2.14a Encoding Process Swimlane Diagram Part 1

2.14b Encoding Process Swimlane Diagram Part 2

2.15 SIPOC for the Stocking and Storing Process

2.16 Stocking and Storing Process Swimlane Diagram

2.17 SIPOC for the Loading Process

2.18a Loading Process Swimlane Diagram Part 1

2.19b Loading Process Swimlane Diagram Part 2

2.20 SIPOC for the Delivery Process

2.21 Delivery Process Swimlane Diagram

2.22 SIPOC for the Return Process

2.23 Return Process Swimlane Diagram

2.24 Layout of Main Office Warehouse on the 26th Floor

2.25 Layout of Luxury Items Storage on the 5th Floor

2.26 Layout of Non-Luxury Items Storage on the 5th Floor

2.27 Layout of Warehouse Shelving Rack

CHAPTER 4: PRESENT SYSTEM

4.1 Encoding Error Rate per Month

4.2 Number of Returns due to Damaged Items per Month

4.3 P Chart of Encoding Errors found in Non Luxury (Top) and Luxury (Bottom)

Eyewear

4.4 Initial Stream Diagnosis Chart

4.5a Encoding Procedure Part 1

16
4.5b Encoding Procedure Part 2

4.6a Encoding Procedure with Highlighted Points of Failure Part 1

4.6b Encoding Procedure with Highlighted Points of Failure Part 2

4.7 Bar Chart of Frequency of Procedural Errors Committed by Encoders

4.8 Final Stream Diagnosis Chart

4.9 Pareto Chart of Assignable Causes

CHAPTER 5: SOLUTION DESIGN

5.1 Sample of Eyewear Attribute Guide and Visual Poster

5.2 Current Layout of Encoding Workstation

5.3 Proposed Layout of Encoding Workstation

5.4 Proposed Eyewear Attribute Guides and Posters

5.5 Proposed visual poster highlighting key reminders for the encoding procedure

CHAPTER 6: PROPOSED SYSTEM

6.1 Proposed Eyewear Attribute Guide Poster

6.2 Sample Encoding Schedule

6.3 Proposed Encoding Procedure Visual Poster

6.4 P Chart of Encoding Errors found in Non Luxury (Top) and Luxury (Bottom)

Eyewear

6.5 NP Chart of Encoding Errors

6.6 Current Lighting Layout in Encoding Workstation

6.7 Proposed Lighting Layout in Encoding Workstation

17
CHAPTER 7: CONCLUSION AND RECOMMENDATION

Figure 7.1 - Gantt Chart of Implementation Plan

18
 LIST OF EQUATIONS

CHAPTER 2: PRESENT SYSTEM

2.1 Encoding Error Rate

2.2 Avg. Returns Due to Wrong Order Content

2.3 Avg. Returns Due to Damages

2.4 Avg. Number of Late Deliveries

CHAPTER 4: PRESENT SYSTEM

4.1 Approximate Loss

4.2 Standardized Growth Rate

4.3 Approximated Loss

4.4 Standardized Growth Rate

CHAPTER 6: PROPOSED SYSTEM

6.1 % Errors due to Old Eyewears

6.2 %Errors due to New Eyewears

19
 LIST OF APPENDICES

Appendix A: Receiving Process Document

Appendix B: Sample Luxury Eyewear

Appendix C: Stocking and Storing Process Document

Appendix D: Loading Process Document

Appendix E: Delivery Process Document

Appendix F: Return Process Document

Appendix G: Warehouse Shelves

Appendix H: Excessive Noise Survey Data

Appendix I: Insufficient Lighting Survey Data

Appendix J: RULA Worksheet

Appendic K: Controlled Experiment Results (Without Time Limit)

Appendix L: Controlled Experiment Results (With Time Pressure)

20
 CHAPTER I: PROBLEM AND ITS SETTING

This chapter provides an overview of CP Optics, encompassing the company

profile, its present system and the problem statement. The company profile covers aspects
such as the nature of the business, product offerings and its organizational structure.

1.1. Company Profile

1.1.1. History of the Company

CP Optics, formerly known as CP Marketing, was founded by Mr. Ghanshyam

Advani back in 1984 and was named after the founder’s second son, Chander Prakesh.

Years of experience as a salesman for an eyewear company provided Mr. Advani with

sufficient knowledge to open his own business of importing and distributing eyewear.

Initially, the company began distributing globally recognized Italian and French brands

such as Indo, Benetton, and Versace. The company was then able to expand the number

of brands distributed and acquired sole distributorship of brands such as Fred Lunettes,

Louis F. Lamy, Gianni Versus, and many more. In 2002, the family business began to

incorporate more specialized brands such as Tag Heuer Sports Vision and Spalding, and

the following year the company expanded its market to include the youth by distributing

the brand Kaleido.

As of today, the company caters to a wide consumer market with brands for adults

to infants. The company is one of the leading distributors of eyewear in the Philippines,

with its premium brands carefully selected and retailed at different optical clinics

nationwide. CP Optics’ warehouses are present in two locations, Makati and Sucat, with

21
the company’s main office located in the Makati warehouse/building. The Sucat

warehouse is utilized by both CP Optics and its sister companies.

Figure 1.1 - Company Logo of CP Optics

1.1.2. Company Objectives

1.1.2.1. Company Commitment

It is our foremost policy to be professionally honest and practice fair trade. What

we design, manufacture, and sell must fulfill what we understand and promise to our

customers as product quality. We sustain a systematic and coordinated effort to ensure the

same.

We believe that maintaining high standards of quality and service will lead to

positive performance turning customers themselves into product promoters. This, in turn,

will bring us greater goodwill and profits.

22
 1.1.2.2. Company Vision

CP Optic’s vision is to be a center for excellent eyewear brands. We will be a

vital source of eyewear needs that caters to infants, children, teens, fashionable and active

men, and women.

1.1.2.3. Company Mission

CP Optic’s primary mission and objective is to create and market products of the

highest quality for our customers, who, we feel, deserve the best. And it is our

responsibility to ensure that they get it. Higher productivity, efficiency, convenience, and

comfort mean that we serve the community profitability through the imaginative

utilization of resources – human, material, and financial.

1.1.2.4. Brand Motto

The brand motto of CP Optics is “Sustaining excellence through people, product

& values”.

1.1.2.5. Core Values

Quality

We aim to ensure that all products and services we offer are of the highest quality.

Integrity

We value honesty, fairness, and truthfulness in all our dealings with customers and

suppliers.

23
Customer-Focused

We strive to go above and beyond to exceed customer expectations and create a positive

customer experience.

Continuous Improvement

We aim to continuously improve all aspects of our business in order to utilize our

resources more efficiently and ultimately serve our customers better.

1.1.3. Nature of the Business

CP Optics is a prominent distributor and retailer of luxury eyewear brands in the

Philippines from suppliers worldwide, namely Austria, Australia, China, Hong Kong, and

Singapore. The company also distributes non-luxury eyewear brands nationwide. With

years of experience, the company has established its position in the eyewear market by

catering to a large demographic of customers.

1.1.3.1. Products

CP Optics facilitates the distribution of a variety of eyewear from manufacturers

to retail stores. The eyewear products that they distribute are mainly divided into luxury

and non-luxury eyewear. Luxury brands tend to choose a single distributor and thus are

more strict with requirements such as sales quotas. In the Philippines, CP optics is the

sole distributor for the following luxury brands: Fred Lunettes, Louis F. Lamy, Gianni

Versace, Benetton, Sisley, Lacoste, Trussadi, Stefanel, Kipling, Nina Ricci, Marithe

Francois Girbaud, Celine Dion, Levis, and many more. The price of luxury eyewear

ranges from P12,000 to P40,000. A sample luxury eyewear piece can be found in

24
Appendix B1. Non Luxury eyewear is further divided into low-tier and mid-tier.

Compared to luxury eyewear, whose prices vary greatly, low-tier and mid-tier eyewear

have prices ranging from P1,000 to P2,500 and P7,000 to P11,000, respectively. In

addition, CP Optics sells spare parts for eyewear, such as nose pads, cloths, screws, and

other frame parts.

1.1.3.2. Clients

CP Optics generates its revenue through wholesale and consignment channels.

Approximately 60% of their supply comes through consignment, while the remaining

40% are outright deliveries. CP Optics' clients are optical retail stores that have registered

ophthalmologists, including popular brands like Ideal Vision and Vision Express. For

deliveries within NCR, the company uses its in-house logistics team, whereas 3PL

providers like Entrego and 2GO are used for deliveries outside of NCR.

25
 1.1.4. Organizational Structure

1.1.4.1. Organizational Chart

Figure 1.2 - Organizational Chart

1.1.5. Area of Concern

This study will focus on the Makati warehouse of CP Optics, which is located at

2210 Chino Roces Avenue, Makati City. The study will center itself on the warehouse

operations of the Makati warehouse, which starts from the receiving of eyewear,

inspection, encoding, and storage until eyewear is loaded for delivery and returns. The

Sucat warehouse is excluded from this study as it shares its operations with CP Optics’

sister companies.

26
 CHAPTER II: PRESENT SYSTEM
This chapter discusses the present system and delves into the scope, objectives,
and partitioning of the system. An overview of the company’s current system is explained
in this section.

2.1. System Limits

The system limits of this study will be divided into spatial, temporal, and

magnitudinal scopes.

2.1.1. Spatial Scope

The spatial scope of this study is the warehouse and office of CP Optics which is

located in Cityland Tower, Pasong Tamo, 2210 Chino Roces Avenue, Makati City (refer

to Figure 2.1 and Figure 2.2). The company has a total of three warehousing rooms

which are all included in the study. The main warehousing room and office share the

same unit on the 26th floor, while the two other warehousing rooms are in separate units

located on the 5th floor. The 26th floor only houses luxury eyewear, while each

warehouse on the 5th floor houses both luxury and non-luxury eyewear. Deliveries

outside NCR are not included in this system study.

27
Figure 2.1 - Top View of the Main Warehouse and Office of CP Optics

Figure 2.2 - Street View of the Main Warehouse and Office of CP Optics

28
 2.1.2. Temporal Scope

The temporal scope of this study is from January 2022 - December 2022. The

study will utilize data obtained from various sources, including meetings held online,

in-person observation, and documentation like images, audio, and video recordings.

2.1.3. Magnitudinal Scope

The magnitudinal scope will focus on the warehouse and inventory operations of

CP Optics for luxury and non-luxury eyewear. The process starts from the receiving of

eyewear, inspection, encoding, and storage until eyewear is loaded for delivery and

returns.

2.2. System Objectives

The main objective of CP Optics is to efficiently and effectively distribute

high-quality eyewear products from their suppliers to retail stores. As such, CP Optics

aims to build an efficient and reliable warehousing system from the receiving,

inspecting, and storing of goods until their packaging and delivery. In order to achieve

this, the following specific objectives, along with their respective key performance

indicators (KPIs) and formulas, are shown in Table 2.1.

29
 Table 2.1
List of Specific Objectives, KPIs, and Formulas

Supporting Specific Objective KPI

1. To have an average encoding error rate 1. Average encoding error rate per
of 0% per month month (log changes)

2. To have, on average, fewer than ten 2. Average number of returned items

item returns per month due to wrong due to wrong order content (wrong
order content quantity and/or item type) (Return
Slip)

3. To have, on average, fewer than ten 3. Average number of returned items

returned damaged items per month due to damages (Return Slip)

4. To have, on average, fewer than five 4. Average number of late deliveries

late deliveries per month per month (Delivery Note)

5. To minimize the number of items not 5. Quantity of items that have not
moving for more than 6 months in the been moved for 6+ months as of
warehouse December 31, 2022 (Aging Log
Journal)

Below is a comprehensive explanation of each KPI along with its method of

calculation. Each metric is on a per-month basis.

KPI 1: Average encoding error rate per month

Encoding errors represent the frequency in which the Stock Keeping Unit (SKU)

or the code of items in their system was changed. Measuring this number would be a

direct performance metric for the encoding process, which may possibly affect overall

warehousing accuracy and the return rate. This is due to the fact that the code name in the

system would be tied to both the physical attributes of an eyewear piece as well as its

cost. Thus, a deviation or incorrect code name would affect all processes which utilize

30
those two aspects of the eyewear. Using the total number of eyewear pieces received and

encoded from January 2022 to December 2022, the encoding error rate was obtained

using the formula given in Eq. 2.1.

𝑁𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑒𝑛𝑐𝑜𝑑𝑒𝑑 𝑖𝑡𝑒𝑚𝑠 𝑡ℎ𝑎𝑡 ℎ𝑎𝑑

𝑠𝑦𝑠𝑡𝑒𝑚 𝑙𝑜𝑔 𝑐ℎ𝑎𝑛𝑔𝑒𝑠 𝑡ℎ𝑟𝑜𝑢𝑔ℎ𝑜𝑢𝑡 𝑡ℎ𝑒 𝑦𝑒𝑎𝑟
𝐸𝑛𝑐𝑜𝑑𝑖𝑛𝑔 𝐸𝑟𝑟𝑜𝑟 𝑅𝑎𝑡𝑒 = 𝑇𝑜𝑡𝑎𝑙 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑖𝑡𝑒𝑚𝑠 𝑒𝑛𝑐𝑜𝑑𝑒𝑑
𝑡ℎ𝑟𝑜𝑢𝑔ℎ𝑜𝑢𝑡 𝑡ℎ𝑒 𝑦𝑒𝑎𝑟
(Eq 2.1)

KPI 2: Average number of returned items per month due to incorrect order content

(incorrect quantity and/or wrong item type)

Returns due to incorrect order content refer to the number of items returned to the

warehouse due to incorrect quantity and/or item type. This is checked by the sales

assistant of the retail store upon delivery. This data was taken from the Return Slip forms,

which indicated item type and/or quantity as its reason for return. This KPI would be a

direct measure of the performance of the processes of the picking and packing as it is

their task to ensure that the quantity and items picked and pack match what the

customers/stores are expecting in the delivery.

𝑇𝑜𝑡𝑎𝑙 𝑖𝑡𝑒𝑚𝑠 𝑟𝑒𝑡𝑢𝑟𝑛𝑒𝑑 𝑑𝑢𝑒

𝑡𝑜 𝑤𝑟𝑜𝑛𝑔 𝑜𝑟𝑑𝑒𝑟 𝑐𝑜𝑛𝑡𝑒𝑛𝑡
𝐴𝑣𝑔. 𝑅𝑒𝑡𝑢𝑟𝑛𝑠 𝐷𝑢𝑒 𝑡𝑜 𝑊𝑟𝑜𝑛𝑔 𝑂𝑟𝑑𝑒𝑟 𝐶𝑜𝑛𝑡𝑒𝑛𝑡 = 12 𝑚𝑜𝑛𝑡ℎ𝑠
(Eq. 2.2)

KPI 3: Average number of returned items per month due to damages

Returns due to damages represent the total count of the number of items returned

to the warehouse due to the items being physically damaged or defective in the physical

delivery when checked by the sales assistant. This data was also taken from the Return

31
Slip forms, which indicated damages or defective as its reason for return. This KPI would

be a direct measure of the performance of the processes of the picking and packing as

well as the safety of the delivery handling by the delivery team, as it is their task to

ensure that the items picked, packed, and delivered go through damage checks to match

the standards that the customers/stores are expecting in the delivery. Thus, the possible

points of damage may be in any one of those three processes.

𝑇𝑜𝑡𝑎𝑙 𝐼𝑡𝑒𝑚𝑠 𝑟𝑒𝑡𝑢𝑟𝑛𝑒𝑑 𝑑𝑢𝑒 𝑡𝑜 𝑑𝑎𝑚𝑎𝑔𝑒𝑠

𝐴𝑣𝑔. 𝑅𝑒𝑡𝑢𝑟𝑛𝑠 𝐷𝑢𝑒 𝑡𝑜 𝐷𝑎𝑚𝑎𝑔𝑒𝑠 = 12 𝑚𝑜𝑛𝑡ℎ𝑠
(Eq. 2.3)

KPI 4: Average number of late deliveries per month

The late delivery KPI would be a measure of how many unique delivery orders

(unique by order location and time) are delivered beyond the prescribed date found in the

delivery notes.

𝑇𝑜𝑡𝑎𝑙 𝐿𝑎𝑡𝑒 𝑑𝑒𝑙𝑖𝑣𝑒𝑟𝑖𝑒𝑠

𝐴𝑣𝑔. 𝑁𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝐿𝑎𝑡𝑒 𝐷𝑒𝑙𝑖𝑣𝑒𝑟𝑖𝑒𝑠 = 12 𝑚𝑜𝑛𝑡ℎ𝑠
(Eq 2.4)

KPI 5: Quantity of items that have not been moved for 6+ months

The information system of CP Optics has a feature that notifies its users through

an aging journal log of which items and quantities have not moved for 6 or more months.

This number is a significant key performance indicator because it would indicate that

there may be an issue with the warehousing that is keeping the items in storage for

prolonged periods of time. The raw data for this KPI was taken from the logs on the date

32
December 31, 2022, which encapsulates all items and quantities at this point in time that

were encoded into the system but had not yet been delivered to any stores. The measured

number of this KPI is the count of non moving items as of December 31, 2022. A sample

log of non moving items in TERP can be found in Appendix C2.

2.3. Partitioning and Linkages

2.3.1. Man

2.3.1.1. Job Roles

There are a total of 35 employees working in the warehouse department in

Cityland Tower. Figure 1.5 below illustrates the job roles involved in the warehouse

department, together with the number of manpower under each role.

Figure 2.3 - Man Organization Chart

The duties and responsibilities of the different job roles are summarized in Table

2.2.

33
 Table 2.2a
List of Job Roles and their Descriptions

Job Role Description

Supply Chain Oversees all the activity relating to supply chain, which includes
Officer the sourcing, procurement, transportation, and delivery of goods
and services. The SCO ranks highest in the organizational chart for
the Warehouse department, thus having the overall power and
managerial responsibilities to make any major decisions regarding
the department.

Head Inbound Oversees inbound activities such as receiving, storing, and

managing incoming goods and materials. This ensures that
inventory is accurately tracked, organized and ready for outbound.
This includes overseeing the overall encoding and storage process
of the goods within the internal database system.

Assistant Flexible roles which are responsible for a significant portion of the
physical/labor intensive tasks, which include report filing,
inspection, physical count of inventory, individual quality checks,
and labeling of products.

Head Outbound Oversees outbound processes relating to storage, handling , and

shipping of products and materials to customers or other external
entities. This includes coordination with the head Inbound,
Inventory controller and Logistics head, as well as the management
of Delivery Drivers and Assistants.

Pick and Manpower used for the picking and packing process, which
Packers happens before outbound processes. This includes packing the
products in their designated packaging as well as organizing the
products to be picked up by outbound personnel.

34
 Table 2.2b
List of Job Roles and their Descriptions

Job Role Description

Inventory In charge of ensuring that inventory records of the physical

Controller warehouse are in line with other company-related systems such as
accounting and the digital database.

Logistics Head Oversees the overall logistics process, which includes coordinating
and managing the movement of goods and materials throughout the
supply chain, from sourcing and procurement to storage,
transportation, and delivery to customers.

Delivery Driver Tasked with operating the Delivery truck when transporting goods
to their delivery locations.

Delivery Assists the Delivery Driver with deliveries mainly through physical
Assistant transportation of products as well as coordination with the
customers once met on-site.

Encoder Tasked with copying and encoding the unique individual codes of
the products once received from the suppliers to the internal digital
database.

Head Encoder: Oversees the entire encoding process by

supervising a group of encoders who are in charge of precisely
converting the barcodes of suppliers into the company’s own
format.

Regular Encoder: Individuals who are full time employees in CP

Optics who are converting the barcodes of suppliers into the
company’s own format.

Irregular Encoder: Individuals employed by CP Optic’s sister

company, who occasionally assist the encoding department of CP
Optics during periods of high sales volume.

Further elaboration of the job roles within CP Optics’s warehouse system is

discussed below.

35
Supply Chain Officer

The Supply Chain Officer is responsible for all activities related to the supply

chain, from sourcing to the delivery of the goods. The officer is mainly involved in the

stocking and storing process of the warehouse. They are tasked with the role of assigning

storage spaces for incoming goods. Prior to the arrival of goods, the Supply Chain Officer

informs the Warehouse Inbound Assistants of the designated area for each good/item.

Once the items have been stored, the task of logging the location of the goods into the

system also falls under their responsibility.

Head Inbound

The Head Inbound is responsible for all the inbound activities, such as receiving

and managing the goods carried out in the warehouse goods. They are the ones in charge

of receiving Purchase Orders from the purchasing team and creating the Receiving

Report to be given to the Inbound Assistants. Once the goods have been received and

inspected by the Assistants, the Head Inbound will obtain photos of the goods with their

corresponding container number and order details. These images will then be sent to the

Merchandiser as proof of having received the goods. They also oversee the encoding and

storage process of the goods into the company’s system.

36
Inbound Assistants

The Assistants in the warehouse are responsible for most of the labor intensive

tasks such as filing of documents/reports, inventory checks, and inspections. The Inbound

Assistants are responsible for receiving goods and cross checking of items provided by

the supplier. In the receiving process, they are also in charge of unloading the goods and

obtaining images as proof for the supplier. They are also responsible for the individual

inspection of each good received, in which they inform the Head Inbound of any

discrepancies or damages found. Stocking and storing of the goods in the warehouse also

fall under their responsibility. The Assistants constantly communicate with their superiors

throughout each task carried out.

Head Outbound

The Head Outbound is in charge of all the outbound activities, such as item

retrieval and shipping of the goods. Loading the goods to be delivered is part of their

responsibility. They receive the order list and create the appropriate delivery schedule of

the ordered goods for the Pickers and Packers. Once the orders are packed, the Head

Outbound is responsible for the preparation of the delivery note for the Delivery

Assistants and Delivery Drivers. They also oversee and account for the delivery of goods

to retail stores or other customers. Throughout the duration of the outbound activities, the

Head Outbound coordinates with the Inventory Controller and Logistics Head for each

task.

37
Pick and Packers

The Pick and Packers are responsible for the packing and organizing of products

to be delivered. They are mainly involved in the loading process, and their task begins

once the Head Outbound provides them with the order list. They are in charge of

preparing, cross-checking, transporting, and inspecting the goods to be delivered. Once

the delivery note is received, the goods are packed into boxes and loaded into the delivery

trucks with the help of the Delivery Assistants.

Inventory Controller

The Inventory Controller is in charge of ensuring that inventory records of the

physical warehouse are in line with other company-related systems such as accounting

and the digital database. This responsibility would include the checking of nonmoving

items.

Logistics Head

The Logistics Head is in charge of overseeing the overall logistics process. Their

responsibilities include the coordination and management of the goods received from the

suppliers. They are also in charge of managing the Delivery Assistants and Delivery

Drivers for the outbound activities.

38
Delivery Assistant

Delivery Assistants decide on the route that Delivery Drivers must take. Their

responsibility is to ensure that the Delivery Drivers reach their destination without taking

any wrong turns as well as coordination for recieval with the sales assistant. The Delivery

Assistants will also coordinate with the customer representative and help them unload the

goods from the L300.

Delivery Driver

Delivery Drivers are responsible for ensuring that goods are delivered safely and

on time. They must follow the delivery schedule set by the Head Outbound and the route

set by the Delivery Assistant. No Delivery Driver is allowed to leave without an

Assistant.

Encoder

Encoders are responsible for encoding unique codes for each piece of eyewear.

Once the eyewear has been received and cleared for inspection, each item is checked

individually and cross-checked against the model number on the box and the model code

on the temples of the eyewear before being assigned a distinctive barcode, which is then

entered into a database. There are three types of encoders: head encoder, regular and

irregular. Head encoders and regular encoders are tasked with the everyday encoding of

eyewear, including eyewears for within-day deliveries, future deliveries and backlogs. In

addition to this, the head encoders oversees the whole encoding operation as they are the

39
most experienced in the field. Irregular encoders are encoders from CP Optic’s sister

company, and they assist the encoding department of CP Optics during periods of high

sales volume.

2.3.1.2. Wages

The wages of each of the 34 employees vary depending on their job roles. The

salaries of certain employees such as Supply Chain Officers, Logistic Heads, and

Inbound and Outbound Heads vary in accordance with their years of experience and

expertise in the specific role. Table 2.3 shows the summary of the minimum wages for

newly-hired and regular employees.

Table 2.3
Summary of Wages for Regular Workers

Type of Wage Rate

Basic Php 575 (per day)

Overtime Php 75 - Php 80 (per hour)

The company utilizes the services of an employment agency for hiring new

employees. Doing so provides the company with security that the new hire fits both the

company’s standards and requirements. The new hires undergo a 6-month probationary

period prior to their regularization. Once hired in the company, these regular employees

are provided with medical insurance from the Health Maintenance Organization (HMO)

that includes accident, dental, and other medical insurance. Accident insurance is mostly

provided to employees that are more at risk of accidents, such as Delivery Drivers,

Pickers, and Packers. The company also employs a per diem policy when it comes to

40
employees’ overtime hours. The per diem policy includes allowances for both food and

travel expenses.

2.3.1.3. Working Shift

The Warehouse Manager, Head Inbound and Outbound, Logistics Head, and

Inventory Controller work a nine-hour work shift, from 8 am to 5 pm, for five days per

week. They are also required to work a whole nine-hour shift for one Saturday every

month. These employees work at least 45 hours a week for 21 days per month. The

warehouse has two shifts per day, the first shift is from 8 am to 5 pm while the second

shift is from 6 pm to 4 am.

Delivery Drivers and Delivery Assistants are required to work 8 hour shifts per

day for five days a week. These employees generally work the second shift, 6 pm to 4

am, in order to accommodate the deliveries to before or after mall hours. Overtime hours

of employees are subjective depending on the workload or tasks to be performed.

2.3.2. Material

The materials used in the warehousing and logistics department of CP optics are

the following: documents, equipment, and packaging materials.

2.3.2.1. Products

CP optics offers a variety of eyeglasses, each of which is unique due to a variety

of characteristics. But, before you can select a specific eyewear for your needs, there are

various factors to consider in order to select the ideal eyeglasses. Numerous types of
41
eyewear are classified according to its type, material, and shape. The first way of

categorizing frames is by their type. Full-rimmed, semi-rimless, rimless, low bridge and

wire are the usual frame types. Moreover, the most generally used frame materials for

these are plastic, acetate, wood grain, metal, and finally, titanium. Finally, glasses are also

categorized by shape. There are a variety of frame and lens shapes that distinguish each

pair of glasses. These shapes include rectangle, oval, round, square, large, horn, browline,

aviator, cat-eye, oversized, and geometric.

Each eyewear maker has a unique barcode that is exclusive to their brand, size,

shape, and many other factors, making it tough to remember what each barcode stands

for. Furthermore, while each pair of glasses may appear identical to the naked eye, the

barcode may change by just one little aspect. For example, barcode A3613 might be

labeled as Brand A oval shaped black eyewear, whilst A3612 could be classified as Brand

A oval shaped dark gray eyewear, both of which may appear extremely similar.

2.3.2.2. Classification of Products

The company’s products can be categorized into 2 different levels, namely:

luxury, and non-luxury. This method of categorizing items based on their sales

contribution assists the company in prioritizing and monitoring high-value items. Luxury

eyewear items are considered to be the most important items in the warehouse and are

priced at a much higher price range of P12,000 and above. This category also contributes

the fewest items to the warehouse but provides the most value. Non-luxury eyewear, on

the other hand, are eyewear with a lower value and a price range of less than P12,000 that

contribute to a larger quantity in the company. Non-luxury eyewear is also seen to house
42
the vast majority of the eyewear in the warehouse. Table 2.4 shows the contribution of

quantity and sales for each classification.

Table 2.4
Summary of Contribution of Each Level

Classification Sales Contribution

Luxury 55%

Non-Luxury 45%

2.3.2.3. Packaging

Table 2.5 shows the list of packaging materials used by the warehousing and

logistics departments in their operations.

Table 2.5
Summary of Packaging Materials

Packaging Material Function

Bubble Wrap To protect fragile items during shipping

and transportation

Corrugated box To keep moisture away from eyewear

Scotch Tape or Normal Clear Tape To seal the boxes and secure contents

Stretch Film To protect eyewear from dust, moisture,

and dirt
Protects eyewear from sliding around
inside box

Plastic Pouch Takes up less space and easy to transport

Gift Wrapper and Crumpled Paper To fill gaps within the box
Offers protection for the eyewear inside
the box

Cotton Bag Offers strong and durable protection for

the corrugated box

43
 2.3.2.4. Documents

The documents that are used in the warehouse activities are listed below, Table

2.6, with their acronyms and uses.

Table 2.6a
Summary of Documents Utilized in Warehouse Activities

Documents Purpose: Details Given by: Received

by:

Receiving To confirm that the items 1. Item Codes Purchasing Warehouse

Report (RR) received from the supplier 2. Quantities Assistants
match the Packing List
provided. The Receiving
Report also notes if there is
any damage to the goods.

Purchasing Issued by customers, 1. Item Codes Customers Purchaser

Order (PO) outlining the details of a 2. Quantities
transaction such as type, 3. Price
quantity, and price of goods.

(refer to Appendix A1 for a

sample PO)

Return Slip Used to track returned goods 1. Date Customer or Delivery

(RS) from customers or retailers. 2. Supplier Optical Assistant
Serves as an official record Name
of the return and includes 3. Description
details such as the reason for
4. Reference
the return, quantity of goods, Number
original Purchase Order 5. Quantity
number, and other relevant 6. Amount
information. 7. Reason for
Return
(refer to Appendix F1 for a * May vary per
sample RS) customer

44
 Table 2.6b
Summary of Documents Utilized in Warehouse Activities

Documents Purpose: Details Given by: Received

by:

Inventory Used to show the internal 1. Items Accounting Logistics

Transfer movement of inventory from Details and Head
Order (ITO) one location to another. 2. Source and Inventory
Provides details on the Destination Team
quantity, description, and of Transfer
location of the inventory 3. Date of
being transferred, as well as Transfer
the destination location

(refer to Appendix E2 for a

sample ITO)

Pick List Identifies the items that need 1. Item Codes Sales Team Pickers
to be picked for an order. 2. Quantity and
Includes details such as the 3. Description Accounting
specific items and their 4. Location
locations on shelves

Packing List Identifies and verifies the 1. Item Codes Warehouse Packers
contents of the box once 2. Quantity Manager
items have been picked and 3. Description
packed. It includes details 4. Partial
such as the specific items Dimensions
contained in the box. 5. Weight

(refer to Appendix D1 for a

sample packing list)

Aging Stock Automated system that 1. Item Codes Accounting Upper

Journal monitors inventory that has 2. Quantity Management
(ASJ) not moved for a specific 3. Price
period. The system alerts 4. Time
when an SKU has not been
moved for six months

(refer to Appendix C2 for a

sample ASJ)

45
 Table 2.6c
Summary of Documents Utilized in Warehouse Activities

Documents Purpose: Details: Given by: Received

by:

Delivery Accompanies the 1. Supplier Head Pickers and

Note (DN) transportation of goods from and buyer Outbound Packers,
a warehouse to a customer. It details Delivery
includes information such as 2. Description Assistants
the names and addresses of of goods
the warehouse and customer, 3. Item Details
a description of the items 4. Date
being transported, and serves 5. Reference
as proof of delivery. Numbers

(refer to Appendix E1 for a

sample DN)

Security Used to track and monitor 1. Item Security Upper

Log (SL) the movement of people and descriptions Management
items within a secure area. It 2. Quantity
can include details such as 3. Vehicle
the names of employees plate
entering and exiting, the number
items that come in and out 4. Timestamps
(without specifying the exact
quantity, just the number of
boxes), plate numbers of
vehicles, and trucks that go
in and out.

Inventory Used in the physical count of 1. Item codes Accounting Inventory

Count inventory to track the 2. Location and Controller
Sheet (ICS) inventory being counted. It 3. Quantity Inventory
serves as a reference when Team
comparing the actual
inventory with the amount in
the system to ensure the
accuracy of inventory
records.

(refer to Appendix C1 for a

sample ICS)

46
 2.3.3. Machine

The use of machines enables CP Optics to become more efficient in their

warehousing processes. The machines used in their warehouse operations include desktop

computers, printers, hand pallets, and L300 trucks. These machines are all used to assist

workers in completing their tasks. Table 2.7 shows the different types of equipment used

in the warehouse as well as their respective functions and quantity.

Table 2.7
Summary of Machines used in CP Optics

MACHINE QUANTITY FUNCTION PICTURE

Desktop 2 Used for internal

Computer communication within
departments and inventory
management

Printer 1 To print essential

documents like the Pick
List and the Purchase
Order

Hand Pallets 3 Primary mode of transfer

of pallets from the
warehouse to the loading
station

L300 4 Delivers both non-luxury

and luxury items form
warehouse to customers.

47
 2.3.4. Information System

Tally Enterprise Resource Planning (TERP) software is presently used by CP

Optics. This software is a large-scale application that monitors the items that move

through and out of a warehouse system. Although the majority of the organization uses

the program, the inventory component is mostly used by the encoding and inventory

team. This software is used by CP Optics to keep track of eyewear inventory, which

includes items that come in and out of the warehouse as well as the current stock for each

item. The system also tracks the product code of each specific eyewear, which can later

be categorized by brand name, code, and size that is generated in a Stock Item list to ease

product identification. Furthermore, the system takes notes on specific customer orders

and saves them as a record for future use. Figure 2.4 illustrates the starting menu of TERP

with the different functions and subsections available.

48
 Figure 2.4 - Gateway of Tally

The Gateway of Tally serves as the main menu of the software and is where the

accounts information, inventory information and the other categories that can be found.

The inventory information in the Gateway of TALLY is where the stock item list of the

several eyewear that CP optics can be found. This can be seen in Figure 2.5 below.

49
 Figure 2.5 - Inventory Information in Tally

The Stock Item list in Figure 1.8, in the Tally software is a document that shows

the several products and quantities that CP Optics handles. The product name, product

code, product description, current stock, out of stock, ordered, price, delivered, and item

location are all stored in this section of the system, allowing the inventory and delivery

teams to know the availability and location of certain eyewear. The items in this folder

can subsequently be filtered into specific classifications, making it easier to locate things.

50
In Figure 2.6, a search box is provided to make it simple to look for certain eyeglasses in

the stock list.

Figure 2.6 - Stock Item List in Tally

51
 2.3.5. Method

This section will cover the warehouse operations of CP Optics starting from the

receiving of eyewear in the warehouse to its delivery. The entire procedure consists of

nine stages which are, Receiving, Inspection, Encoding, Stocking and Storing, Loading,

Delivery, and Returns..

2.3.5.1. Receiving

The receiving process includes the acceptance of eyewear from suppliers into the

Makati warehouse. The receiving process starts when the Purchasing Team gives a

Purchase Order to Head of Inbound and ends when boxes of eyewear are unloaded from

the truck onto the staging area. A sample Purchase Order can be found in Appendix A1.

Goods for sale are products that have been ordered from the supplier by the

company. These goods are intended to be sold to customers. Table 2.8 shows the play

script process of the receiving of goods for sale. Figures 2.7 and 2.8 show the SIPOC and

swimlane of the receiving process, respectively.

52
 Table 2.8
Play Script of the Receiving of Goods for Sale

Action by Step Action Performed

Head Inbound 1 RECEIVE Purchase Order from purchasing team

2 PREPARE Receiving Report based on purchase

order

3 DISTRIBUTE Receiving Report to inbound

assistants

Security 4 LOG IN arrival of L300 in log book

Inbound Assistants 5 UNLOAD items from L300 onto the staging area

6 CROSS CHECK the following with Receiving

Report
- Quantity of boxes
- Order code

7 COMPARE received boxes with sample photo

provided by supplier

8 TAKE a photo of the following:

- Overview of all packed boxes within the
same order
- Close up view of intact serial numbers

9 SAVE photos with corresponding container

number and order details

10 SEND photos to head inbound

Head Inbound 11 FORWARD photos to Merchandiser

53
 Suppliers Input Process Output Customers

-Purchasing team -Purchase Order Receiving -Receiving Report -Inbound

-Head inbound -Receiving Report Process -Physical Item Assistants
-Inbound -Manpower Confirmation -Encoders
Assistants -Photocopy of -Photo of goods -Head inbound
-Goods supplier goods from supplier -Merchandiser
-Camera

Figure 2.7 - SIPOC for the Receiving Process

54
Figure 2.8a - Receiving Process Swimlane Diagram Part 1

55
Figure 2.8b - Receiving Process Swimlane Diagram Part 2

56
 2.3.5.2. Inspection

The process of inspection involves the examination of eyewear to determine

whether it has any damage or not. Warehouse Inbound Assistants perform visual

inspections on each piece of eyewear in the staging area after unloading. Any eyewear

found to be damaged is promptly returned to the supplier, while undamaged items are

brought into the warehouse. Damages may include stains, chips, discoloration, and

manufacturing defects. The inspection process starts with the Warehouse Inbound

Assistants unpacking the items from their packaging and ends with the Warehouse

Inbound Assistants repacking non-damaged items in its original packaging. The

inspection process also occurs during the encoding process and the loading process. Table

2.9 shows the inspection play script process. Figures 2.9 and 2.10 shows the SIPOC and

swimlane of the inspection process, respectively.

57
 Table 2.9
Play Script of the Inspection Process

Action by Step Action Performed

Warehouse Inbound 1 UNPACK items from original packaging

Assistants

2 CROSS CHECK received items with Receiving

Report
- Quantity of items
- Item descriptions

3 INSPECT each item for damages

4 SEPARATE non-damaged and damaged items

5 INFORM head inbound of damaged items

6 SIGN Receiving Report for conforming items

7 REPACK non-damaged items in original

packaging

Suppliers Input Process Output Customers

- Warehouse - Manpower Inspection - Item Inspection - Receiving report

Inbound - Unpacking tools Process check signed
Assistants - List of bad goods - Head Inbound

Figure 2.9 - SIPOC for the Inspection Process

58
Figure 2.10a - Inspection Process Swimlane Diagram Part 1

59
Figure 2.10b - Inspection Process Swimlane Diagram Part 2

60
 2.3.5.3. Encoding

The encoding process refers to the cross-checking and inputting of barcodes into

the company’s system. As each brand has a unique barcode system, the Encoders are

responsible for the manual conversion of the barcodes into a format that is understood by

the system in CP Optics. For instance, Figure 2.11 shows two different barcodes supplied

by Silhouette and Baldessarini.

Figure 2.11- Sample Barcode and Product Code for Brand Silhouette (Left) and

Baldessarini (Right)

These barcodes are then converted into a Stock Keeping Unit (SKU) unique to CP

Optics. This includes information such as brand initial, item code, collection, color, and

frame size. Using the sample barcode of the brand Silhouette shown in Figure 2.11, the

encoder would convert this barcode into the Stock Keeping Unit code shown in Figure

2.12.

61
 Figure 2.12 - Sample Barcode and Product Code for Silhouette

The sample encoded item shown above in Figure 1.14 was made by an

experienced encoder who is familiar with different eyewear as well as brand formats. To

convert suppliers’ barcodes to CP Optics’ format, the letters and/or numbers starting on

the far left may indicate the brand name, item code, collection, color, and size.

Nevertheless, in some cases, different manufacturers may include additional categories

such as bridge size and glasses' arm length.

The encoding process starts with the Encoders unpacking the boxes and ends with

the Encoders resigning the receiving report for conforming items. Table 2.10 shows the

encoding play script process. Figures 2.13 and 2.14 shows the SIPOC and swimlane of

the encoding process, respectively.

62
 Table 2.10
Play Script of the Encoding Process

Action by Step Action Performed

Encoders 1 UNPACK items from original packaging

2 INSPECT items for damages

SEPARATE damaged goods

3 CROSS-CHECK barcode of the box with model

number written on the eyewear temple

4 ENCODE eyewear code into TERP based on the

following
1. Brand name
2. Item code
3. Collection type
4. Color
5. Frame size

5 REPACK eyewear into original boxes

6 SIGN Receiving Report for conforming items

Suppliers Input Process Output Customers

- Warehouse - Manpower Encoding - Translated barcodes - Supply Chain

Inbound - Barcodes of goods Process for the goods Officer
Assistant - Signed receiving -Warehouse
report Inbound
Assistants

Figure 2.13 - SIPOC for the Encoding Process

63
Figure 2.14a - Encoding Process Swimlane Diagram Part 1

64
Figure 2.14b - Encoding Process Swimlane Diagram Part 2

65
 2.3.5.4. Stocking and Storing

The stocking and storing process refers to the transfer of items to their assigned

storage areas. The items are stacked and stored by the Warehouse Inbound Assistants in

accordance with the company’s stacking procedures. The stocking and storing process

begins with the assignment of storage spaces by the Supply Chain Officer and ends when

the location of all items has been logged into TERP. A sample photo of TERP sheet logs

can be found in Appendix C1. Table 2.11 shows the stocking and storing play script

process. Figures 2.15 and 2.16 shows the SIPOC and swimlane of the stocking and

storing process, respectively.

Table 2.11
Play Script of the Stocking and Storing Process

Action by Step Action Performed

Supply Chain Officer 1 ASSIGN storage spaces based on projected

outbound dates

Warehouse Inbound 2 TRANSPORT conforming items from the

Assistants staging area to designated storage areas

3 STACK all items based on stacking guidelines

4 REPEAT steps 1 through 3 until all received

items have been stored

5 INFORM Supply Chain Officer of completion of

transport

6 LOG location of items in TERP

66
 Suppliers Input Process Output Customers

- Encoders - Manpower Stocking - Location log of the - Pickers and

- Supply Chain - Receiving Report and Storing received goods Packers
Officer Process - Warehouse
Inbound
Assistants

Figure 2.15 - SIPOC for the Stocking and Storing Process

67
Figure 2.16 - Stocking and Storing Process Swimlane Diagram

68
 2.3.5.5. Loading

The loading process starts when the Head Outbound receives the order list from

the merchandiser and ends when they are loaded to the L300 for distribution. The loading

of goods occurs in the staging area. Table 2.12 shows the loading play script process.

Figures 2.17 and 2.18 shows the SIPOC and swimlane of the loading process,

respectively.

69
 Table 2.12
Play Script of the Loading Process

Action by Step Action Performed

Head Outbound 1 RECEIVE order list from Merchandiser

2 PREPARE delivery schedule

3 PREPARE Picking and Packing Order List

based on delivery schedule

4 DISTRIBUTE Picking and Packing Order List

to Pickers and Packers

Pickers and Packers 5 REFER to system logs (TERP) for the location
of items

6 PICK UP items from corresponding shelves

7 CROSS-CHECK codes and quantities of

picked items with Pick List

8 TRANSPORT picked items to packing area

9 INSPECT items for damages

10 SEPARATE damaged goods

11 SIGN Pick List for conforming items

Head Outbound 12 PREPARE Delivery Note

13 DISTRIBUTE Delivery Note copies to Pickers,

Packers, and Delivery Assistants

Pickers and Packers 14 PACK items into boxes

15 TRANSFER boxes into staging area

16 SORT items in staging area according to

Delivery Note

Delivery Assistants 17 LOAD boxes into L300 according to the

and Pickers & Delivery Note
Packers

70
 Suppliers Input Process Output Customers

- Merchandiser - Manpower Loading - Delivery Schedule - Retail Stores

- Delivery team - Order List Process - Delivery Note - Head Outbound
- Picking and - Location log of - Packaged Goods - Delivery
packing team goods Assistants

Figure 2.17 - SIPOC for the Loading Process

71
Figure 2.18a - Loading Process Swimlane Diagram Part 1

72
Figure 2.18b - Loading Process Swimlane Diagram Part 2

73
Figure 2.18c - Loading Process Swimlane Diagram Part 3

74
 2.3.5.6. Delivery

The delivery process refers to the transportation of goods from the warehouse to

the stores. In the delivery of goods, the Delivery Driver will always be accompanied by a

Delivery Assistant. Based on the company’s protocols, the Delivery Driver cannot leave

the L300 unattended. The Delivery Assistant is in charge of unloading the goods and

contacting the customer's sales assistant. Usually, the ratio of Delivery Driver to Delivery

Assistant is one-to-one but the ratio can reach one to three if the stock of goods is split

between several places in one delivery. Table 2.13 shows the delivery play script process.

Figures 2.19 and 2.20 shows the SIPOC and swimlane of the delivery process,

respectively.

Table 2.13
Play Script of the Delivery Process

Action by Step Action Performed

Delivery Assistant 1 PLAN delivery route

Security 2 INSPECT clearance of items for delivery

Delivery Driver 3 TRANSPORT items to delivery locations based

on Delivery Note

Delivery Assistant 4 UNLOAD boxes from L300

5 WAIT for sales assistant to sign the delivery

note to show that order is completed

6 GIVE the signed Delivery Note to Head

Outbound

Head Outbound 7 MARK deliveries as completed in TERP

75
 Suppliers Input Process Output Customers

- Delivery - Delivery Note Delivery - Signed Delivery - Head Outbound

Assistants - Manpower Process Note - Customer Sales
- Head Outbound - Delivered goods Assistant

Figure 2.19 - SIPOC for the Delivery Process

76
Figure 2.20 - Delivery Process Swimlane Diagram

77
 2.3.5.7. Returns

The return process includes goods returned from retail stores. Items that are

returned can be either due to damages or incorrect type of order and are referred to as

nonconforming items. Table 2.14 shows the play script of the returning process. Figures

2.21 and 2.22 shows the SIPOC and swimlane of the returns process, respectively.

Table 2.14
Play Script of the Return Process

Action by Step Action Performed

Delivery Assistant 1 RECEIVE filled up Return Slip

2 CHECK details of Return Slip regarding reasons

for return

3 INFORM Head Outbound of nonconforming

items

4 LOAD nonconforming items into L300

Delivery Driver 5 TRANSPORT nonconforming items back to

warehouse

Delivery Assistant 6 GIVE Return Slip to Head Outbound

78
 Suppliers Input Process Output Customers

- Customer Sales - Return Slip Returns - Return Slip - Delivery

Assistant - Non conforming Process - Returned Items Assistant
- Delivery Team Goods - Head of
Outbound

Figure 2.21 - SIPOC for the Return Process

79
Figure 2.22 - Return Process Swimlane Diagram

80
 2.3.6. Warehouse Layout

1. CP Optics Main Office Warehouse

Figure 2.23 - Layout of Main Office Warehouse on the 26th Floor

The accounting department, inventory heads, encoding department, and a

significant storage of luxury eyeglasses are all housed at CP Optics' main office

warehouse. Luxury items in higher value and are usually packed and ready for delivery

are placed on this floor. This part of the company is on the 26th floor of the building.

81
 2. 5th Floor Storage (Luxury Items)

Figure 2.24 - Layout of Luxury Items Storage on the 5th Floor

This room of CP Optics houses luxury items and has a larger inventory capacity

than the storage area of the main office. Most received luxury items are placed in this

room.

82
 3. 5th Floor Storage (Non-Luxury Items)

Figure 2.25 - Layout of Non-Luxury Items Storage on the 5th Floor

The 5th Floor storage area stores the majority of the non-luxury things as well as

the packing for several pairs of glasses. These packaging products include eyeglass

boxes, cases, plastic packing, and many more.

83
 4. Warehouse Shelving Rack

Figure 2.26 - Layout of Warehouse Shelving Rack

The warehouse stores and organizes their products on shelving racks as seen in

Figure 2.26. The 26th floor utilizes 23 shelves while the 5th floor utilizes 40 shelves.

Appendix G displays the actual photos of the shelves containing eyewear products.

84
 CHAPTER III: SITUATION APPRAISAL

This chapter discusses the SWOT and WOT-SUG analysis, from which the
problem statement for the present system is constructed.

In order to assess the current performance of the system and answer whether

specific objectives are being met, KPIs must be compared to their respective targets and

classified based on whether on not those KPIs fell short or met those targets. These

targets set by the company are created in order to define desired outcomes for specific

system components as well as help discern a measurable magnitude for how well or

poorly the current system performs with respect to goals and expectations. Table 3.1

below summarizes the actual performance for each KPI together with its respective

targets. The actual performance is further elaborated in Sections 3.1 and 3.2.

Table 3.1
Comparison Between Monthly Targets and Actual Performance per KPI

Actual Was the

KPI Monthly Performance monthly
Target (monthly target
average) reached?

Average encoding error rate per month 0% 0.64% No

Average number of returned items due <10 2.83 Yes

to incorrect order content

Average number of returned items due <10 14.00 No

to damages

Late Delivery <5 0.33 Yes

Quantity of items that have not been <35 68 No

moved for 6+ months (as of December
31, 2022)

85
 The KPIs whose targets are met represent the strengths in the warehousing

operations of CP Optics, while the KPIs whose targets are not met represent the

weaknesses. The strengths and weaknesses are summarized in Table 3.2 below.

Table 3.2a
Summary of SW Analysis

Strengths Weaknesses

S1: Deliveries completed by the W1: The encoding section experienced an

delivery team in 2022 reached an average encoding error rate of
average late delivery frequency per 0.64% during the months of January
month of 0.33, which is within the 2022 to December 2022, which
target of maximum 5 late exceeds the maximum allowable
deliveries per month. encoding error rate of 0% by 0.64%.
This incurs an average monthly
potential loss of P82,083.33 due to
sales of mispriced eyewear.

S2: The number of items returned by W2: During the months of January 2022
retail stores due to incorrect order to December 2022, an average of 14
content (incorrect quantity and/or items were returned per month due
wrong item type) averaged 2.83 to damages. This exceeds the
items per month in the entire year maximum allowable frequency of
of 2022, which is within the returns per month of 10 items by 4
maximum allowance of 5. items. This incurs an average
monthly potential loss of P21,000
due to the loss in sales from
damaged eyewear.

86
 Table 3.2b
Summary of SW Analysis

Strengths Weaknesses

W3: As of December 31, 2022, the

quantity of nonmoving inventory
from the warehouse for 6 or more
months was 68. This exceeds the
maximum allowable quantity of 35
by 33. This costs the company
P305,705 in terms of unrealized
sales.

3.1. Strengths

S1: Deliveries completed by the delivery team in 2022 reached an average late

delivery frequency per month of 0.33, which is within the target of maximum 5 late

deliveries per month.

Table 3.3 below illustrates the number of orders and late deliveries from January

2022 to December 2022. The late delivery rate was calculated using Eq. 2.4 and is

shown in the last column of Table 3.3.

87
 Table 3.3
Number of Orders, Late Delivery Frequency, and Late Delivery Rate per Month
Number of Late
Month Number of Orders Deliveries Late Delivery Rate
January 68 0 0.00%
February 88 0 0.00%
March 78 0 0.00%
April 89 1 1.12%
May 64 0 0.00%
June 95 1 1.05%
July 78 0 0.00%
August 70 1 1.43%
September 72 0 0.00%
October 85 0 0.00%
November 80 0 0.00%
December 81 1 1.23%
Average/month 79 0.33 0.42%

In 2022, there are 4 months where late deliveries were encountered namely April,

June, August, and December. CP Optics experienced, on average, 0.33 late deliveries per

month with an average rate of 0.42%. The actual performance of CP Optics is within the

target of less than 5 late deliveries per month.

S2: The number of items returned by retail stores due to incorrect order content

(incorrect quantity and/or wrong item type) averaged 2.83 items per month in the

entire year of 2022 which is within the maximum allowance of 5.

88
 Table 3.4 showcases the total counts of the number of items returned due to

incorrect order content summarized monthly by non-luxury and luxury goods. Incorrect

order content refers to wrong order amounts and/or item types

Table 3.4
Count of Returns due to Wrong Item Quantity/Type
Number of Returns Due to Wrong Content
Month Non-Luxury Luxury Total
January 1 0 1
February 0 0 0
March 6 0 6
April 0 0 0
May 2 0 2
June 9 0 9
July 3 0 3
August 0 0 0
September 1 0 1
October 4 0 4
November 4 0 4
December 4 0 4
Average/month 2.83 0.00 2.83

Presently, the average number of returns due to incorrect order content is 2.83

returns per month. The actual performance of CP Optics is within the target of less than

10 returned items due to incorrect order content per month.

89
 3.2 Weaknesses

W1: The encoding section experienced an average encoding error rate of 0.64%

during the months of January 2022 to December 2022 which exceeds the maximum

allowable encoding error rate of 0% by 0.64%. This incurs an average monthly

approximate loss of P82,083.33 due to sales of mispriced eyewear.

Table 3.5 showcases the quantity of received items and the encoding error

frequency (or log changes) over the course of January 2022 to December 2022. The

frequency of changes made in the SKU of items in the system log was summarized on a

per-month basis.

90
 Table 3.5
Quantity of Received Items for Non-Luxury and Luxury Eyewear
Non Luxury Luxury
Encoding
Quantity of Encoding Error Quantity of Error
Month Received Items Frequency Received Items Frequency
January 10,235 47 1,180 6
February 9,372 29 870 0
March 10,046 108 900 5
April 10,854 31 950 1
May 9,436 55 1,121 7
June 9,233 60 984 2
July 9,576 89 1,045 8
August 10,199 80 1,221 3
September 9,778 121 1,110 6
October 10,498 78 1,155 0
November 9,422 71 1,065 4
December 10,602 28 1,023 5
Average 9,938 66.42 1,052 3.92

On average, out of 9,938 non-luxury eyewear received per month, 66.42 of them

were encoded incorrectly. An average of 3.92 luxury eyewear was encoded incorrectly

per month out of the total of 1,052 pieces of luxury eyewear. This leads to a total average

of 70.34 pieces of eyewear encoded incorrectly per month. Using the total amount of

received items as well as the encoding error frequency, the encoding error rate for both

non-luxury and luxury goods per month was calculated and is shown in Table 3.6 below.

91
 Table 3.6
Encoding Error Rate of Non-Luxury and Luxury Items
Encoding Error Rate
Month Non-Luxury Luxury Total
January 0.46% 0.51% 0.46%
February 0.31% 0.00% 0.28%
March 1.08% 0.56% 1.03%
April 0.29% 0.11% 0.27%
May 0.58% 0.62% 0.59%
June 0.65% 0.20% 0.61%
July 0.93% 0.77% 0.91%
August 0.78% 0.25% 0.73%
September 1.24% 0.54% 1.17%
October 0.74% 0.00% 0.67%
November 0.75% 0.38% 0.72%
December 0.26% 0.49% 0.28%
Average 0.67% 0.37% 0.64%

The average encoding error rate per month was found to be 0.64%. The error rate

for non-luxury items was higher with a value of 0.67% compared to 0.37% for luxury

items. The overall average encoding error rate per month of 0.64% exceeds the target of

0% by 0.64%. This incurs an average monthly approximate loss of P82,083.33 due to

sales of mispriced eyewear. A detailed discussion of how this approximate loss was

obtained can be found in Section 4.1.2.1.

92
W2: During the months of January 2022 to December 2022, an average of 14 items

were returned per month due to damages. This exceeds the maximum allowable

frequency of returns per month of 10 items by 4 items. This incurs an average

monthly approximate loss of P21,000 due to the loss in sales from damaged eyewear.

Table 3.7 showcases the total counts of the number of items returned due to

damages summarized monthly by non-luxury and luxury goods.

Table 3.7
Count of Returns due to Damages
Number of Returns Due to Damaged Items
Month Non-Luxury Luxury Total
January 5 0 5
February 15 0 15
March 20 0 20
April 12 0 12
May 16 0 16
June 21 0 21
July 13 0 13
August 8 0 8
September 14 0 14
October 18 0 18
November 10 0 10
December 16 0 16
Average/month 14.00 0.00 14.00

It can be seen that the average number of returns per month due to damages is 14.

This exceeds the maximum allowable allowance of less than 10 returned items per month

due to damages. It deviates from this target by 4. This incurs an average monthly

93
approximate loss of P21,000 due to the loss in sales from damaged eyewear. A detailed

discussion of how this approximate loss was obtained can be found in Section 4.1.2.1.

W3: As of December 31, 2022, the quantity of nonmoving inventory from the

warehouse for 6 or more months was 68. This exceeds the maximum allowable

quantity of 35 by 33. This costs the company P305,705 in terms of unrealized sales.

Table 3.8 showcases the total quantities of each unique item and selling price that

have not moved from the warehouse for 6 or more months as of December 31, 2022

along with the projected unrealized sales for these items.

Table 3.8a
Summary of Quantity of Items Left in Storage for 6+ Months Based on Model Together
with its Selling Price
Item Selling Price Quantity Unrealized Sales
1 1,750 3 5,250.00
2 1,700 5 8,500.00
3 1,700 1 1,700.00
4 5,495 5 27,475.00
5 6,000 2 12,000.00
6 5,495 3 16,485.00
7 3,995 5 19,975.00
8 3,995 5 19,975.00
9 3,995 1 3,995.00
10 28,900 1 28,900.00
11 4,500 5 22,500.00
12 4,500 5 22,500.00
13 4,500 2 9,000.00

94
 Table 3.8b
Summary of Quantity of Items Left in Storage for 6+ Months Based on Model Together
with its Selling Price
Item Selling Price Quantity Unrealized Sales
14 4,500 5 22,500.00
15 4,500 2 9,000.00
16 4,500 2 9,000.00
17 4,500 2 9,000.00
18 4,500 2 9,000.00
19 4,500 2 9,000.00
20 3,995 2 7,990.00
21 3,995 1 3,995.00
22 3,995 5 19,975.00
23 3,995 1 3,995.00
24 3,995 1 3,995.00
Sum 68 305,705.00

There were 24 unique items with a total count of 68 items that have not moved

from the warehouse in 6 or more months. This deviates from the target of less than 35.

Additionally, the items left in storage have a total unrealized gain of P305,705.00.

95
 CHAPTER IV: PROBLEM ANALYSIS

This chapter defines the problem, analyzes probable root causes, and assesses
their validity. The primary focus is to generate a final stream diagnosis that highlights the
validated root causes that contribute to the problem statement.

4.1. Problem Prioritization

Problem prioritization allows decision-makers to determine what weaknesses or

problems should be addressed and in what order. This ensures that resources used to

solve problems are most effectively used in terms of impact and costs to the organization.

4.1.1. Shortlisting of Problems

This section aims to determine which weaknesses are within the control of the

warehouse department of CP optics. The criterion used is defined as whether the

weaknesses identified have probable causes of target deviation within the control of the

warehouse department based on logical analysis and interview information with the

partner company.

96
 Table 4.1
Shortlisting of Weaknesses

Weakness Satisifes
Criteria?

W1 The encoding section experienced an average encoding error Yes

rate of 0.64% during the months of January 2022 to December
2022 which exceeds the maximum allowable encoding error
rate of 0% by 0.64%. This incurs an average monthly
approximate loss of P82,083.33 due to sales of mispriced
eyewear.

W2 During the months of January 2022 to December 2022, an Yes

average of 14 items were returned per month due to damages.
This exceeds the maximum allowable frequency of returns per
month of 10 items by 4 items. This incurs an average monthly
approximate loss of P21,000 due to the loss in sales from
damaged eyewear.

W3 As of December 31, 2022, the quantity of non moving inventory No

from the warehouse for 6 or more months was 68. This exceeds
the maximum allowable quantity of 35 by 33. This costs the
company P305,705 in terms of unrealized sales.

W1: The encoding section experienced an average encoding error rate of 0.64%

during the months of January 2022 to December 2022, which exceeds the maximum

allowable encoding error rate of 0% by 0.64%. This incurs an average monthly

approximate loss of P82,083.33 due to sales of mispriced eyewear.

The encoding errors would be affected by the encoding process, which entails the

physical inspection of the items in question as well as the physical encoding of each item.

97
This can be influenced by the warehouse system because this system and procedure may

be changed or removed by the warehouse management.

W2: During the months of January 2022 to December 2022, an average of 14 items

were returned per month due to damages. This exceeds the maximum allowable

frequency of returns per month of 10 items by 4 items. This incurs an average

monthly approximate loss of P21,000 due to the loss in sales from damaged eyewear.

The number of items returned due to damages per month would be a direct

measure of the physical handling of three parts in the process namely the picking,

packing, and delivery. Additionally, this reflects the accuracy of the damage inspection

procedures during receiving, encoding, and picking/packing, which helps prevent

damaged items from being sent to retail stores. The aforementioned processes and

procedures above show that the warehouse department clearly is involved with this KPI

and may influence it through changes in the system.

W3: As of December 31, 2022, the quantity of nonmoving inventory from the

warehouse for 6 or more months was 68. This exceeds the maximum allowable

quantity of 35 by 33. This costs the company P305,705 in terms of unrealized sales.

The quantity of non moving inventory from the warehouse for 6 or more months

possibly indicates that the warehousing outbound system may not be functioning at

expected levels. The process which determines which items are to leave the warehouse

would be the order list created by the merchandiser at the beginning of the loading

98
process found in Section 2.3.5.5. However, upon inspection of the delivery data it can be

concluded that since almost all deliveries have been met and are well within performance

targets, it is not the inability of outbound warehouse functions that caused this buildup of

unmoved items. Further investigation through interviews with the partner company

showed that according to their accounts, these items are unmoved due to the items not

being shipped out for delivery. This is dependent on the decision-making of the

merchandiser who decides to ship out items based on supply, demand, and trends of the

customers in the business. These decision-making variables for the merchandiser are

outside the scope of the warehouse system as the warehouse system is only concerned

with the physical function of receiving, storing, and delivering goods as dictated by the

orders from the accounting department which is where the merchandiser makes their

decisions.

4.1.2. Summary of Shortlisted Problems

The weaknesses illustrated in Table 4.2 showcase the problems that are within the

control of the warehouse department of CP Optics. As such, these were evaluated and

included in the problem prioritization discussed in Section 4.1.3.

99
 Table 4.2
Shortlisted Problems

Weakness

W1 The encoding section experienced an average encoding error rate of 0.64%

during the months of January 2022 to December 2022 which exceeds the
maximum allowable encoding error rate of 0% by 0.64%. This incurs an
average monthly approximate loss of P82,083.33 due to sales of mispriced
eyewear.

W2 During the months of January 2022 to December 2022, an average of 14

items were returned per month due to damages. This exceeds the maximum
allowable frequency of returns per month of 10 items by 4 items. This incurs
an average monthly approximate loss of P21,000 due to the loss in sales from
damaged eyewear.

4.1.3. Problem Criteria Analysis

There are two dimensions used in assessing the weaknesses from the SWOT

analysis and these are Seriousness and Growth. The weighted criterion used was decided

with the approval of the partner company to ensure that the metrics used in the criterion

are meaningful and impactful to the company.

4.1.3.1. Seriousness (80%)

Seriousness refers to the extent of how the average approximate losses per month

incurred affect the system. The highest score of five suggests that the average monthly

approximate losses critically affect the system, while the lowest score of one suggests

that the system is only minimally affected by the approximate loss incurred. The

summary of criteria scale descriptions for seriousness is shown in Table 4.3 below.

100
 Table 4.3
Seriousness Criteria Scale

Score Seriousness (80%)

5 Critically affects the system: Average approximate losses per month

incurred is more than P50,000

4 Highly affects the system: Average approximate losses per month incurred
is more than P150,000 and less than P199,999

3 Affects the system: Average approximate losses per month incurred is

more than P100,000 and less than P149,999

2 Moderately affects the system: Average approximate losses per month

incurred is more than P50,000 and less than P99,999

1 Minimally affects the system: Average approximate losses per month

incurred is more than P0, and less than P49,999

4.1.3.2. Growth (20%)

Growth refers to the rate at which the concern is increasing over time or the

development of a problem. The highest score of four indicates that the problem is highly

increasing in growth, while the lowest score of one indicates that the concern has

declining growth. The summary of criteria scale descriptions for growth is shown in

Table 4.4 below.

101
 Table 4.4
Growth Criteria Scale

Score Growth (20%)

4 The concern has highly increasing growth with a standardized growth rate
of 8.1% to 15%

3 The concern has highly increasing growth with a standardized growth rate
of 4.1% to 8%

2 The concern is stagnant or little growth with a standardized growth rate of

0% to 4%

1 The concern has declining growth with a standardized growth rate of less
than 0%

4.1.4. Problem Evaluation

Table 4.5 below illustrates a summary of the results from the evaluation of both

problems using seriousness and growth as its criteria.

Table 4.5a
Problem Evaluation Summary

Problem Seriousness Growth (20%) Total

(80%)

The encoding section experienced an

average encoding error rate of 0.64% The average This problem
during the months of January 2022 to monthly has a
approximate loss standardized
December 2022 which exceeds the
due to sales of growth rate of
maximum allowable encoding error mispriced 2.49%. 2.0
rate of 0% by 0.64%. This incurs an eyewear is
average monthly approximate loss of P82,083.33.
P82,083.33 due to sales of mispriced
eyewear and has a standardized growth
rate of 2.59%. 2 2

102
 Table 4.5b
Problem Evaluation Summary

Problem Seriousness Growth (20%) Total

(80%)

During the months of January 2022 to

December 2022, an average of 14 The average This problem
items were returned per month due to monthly has a
approximate loss standardized
damages. This exceeds the maximum
due to the loss in growth rate of
allowable frequency of returns per sales from 1%. 1.2
month of 10 items by 4 items. This damaged
incurs an average monthly approximate eyewear is
loss of P21,000 due to the loss in sales P21,000.
from damaged eyewear and has a
standardized growth rate of 1%. 1 2

W1: The encoding section experienced an average encoding error rate of 0.64%

during the months of January 2022 to December 2022 which exceeds the maximum

allowable encoding error rate of 0% by 0.64%. This incurs an average monthly

approximate loss of P82,083.33 due to sales of mispriced eyewear and has a

standardized growth rate of 2.59%.

Seriousness

The company has a zero-tolerance policy for encoding error rates. However, from

January 2022 to December 2022, the company garnered an average encoding error rate of

0.64%, which deviated from the allowable target of 0% in the year 2022.

𝐴𝑝𝑝𝑟𝑜𝑥𝑖𝑚𝑎𝑡𝑒 𝐿𝑜𝑠𝑠 = (𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝐿𝑜𝑠𝑠 𝑝𝑒𝑟 𝐼𝑡𝑒𝑚 𝑓𝑟𝑜𝑚 𝑆𝑎𝑙𝑒 𝑜𝑓 𝑀𝑖𝑠𝑝𝑟𝑖𝑐𝑒𝑑 𝐸𝑦𝑒𝑤𝑒𝑎𝑟) *

𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝑁𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝐸𝑛𝑐𝑜𝑑𝑖𝑛𝑔 𝐸𝑟𝑟𝑜𝑟𝑠 𝑝𝑒𝑟 𝑀𝑜𝑛𝑡ℎ (Eq. 4.1)

103
 Eq. (4.1) above shows the formula for the approximate loss of non-luxury and

luxury eyewear due to encoding errors. The amount lost by the company would be the

number of items misencoded both non luxury and luxury time the average loss per item.

The company stated that the average losses per item in the non luxury brands would be

approximately Php 1,000 while for luxury it is Php 4000. For instance, if there were 10

items of non luxury misencoded, then the total losses would amount to Php 10,000. Table

4.6 below illustrates the approximate losses of the incorrectly encoded items.

Table 4.6
Approximate Losses from Encoding Errors for Non-Luxury and Luxury Items

Average Loss from Average Approximate Loss

Sale of Mispriced Encoding Error per Month
Eyewear (per item) Frequency

Non-Luxury P1,000 66.42 P66,416.67

Luxury P4,000 3.92 P15,666.67

Total P82,083.33

The total monthly average approximate loss yielded P82,083.33 and thus, this

problem statement is given a seriousness score of 5.

104
Growth

Figure 4.1 - Encoding Error Rate per Month

The trendline equation illustrated in Figure 4.1 shows that the encoding error

percentage rate is increasing by 0.016% monthly. This nominal slope will not be used as

the basis for the growth score as this does not accurately represent a standardized means

of comparison to the other weaknesses since they are measured through different units.

Standardized growth rate = Slope of trend function/Average Encoding Error Rate

for the year (Eq 4.2)

In order to create a standardized growth rate for comparison, Eq. (4.2) above

showcases a formula that is able to standardize the growth rate of any metric by taking

the ratio of the slope to the overall yearly average of the specified metric. For example, in

the case of weakness 1, the 0.016% increase per month of encoding error rate would

105
represent 2.49% of the monthly average encoding rate of 0.64%. This is summarized in

Table 4.7 below.

Table 4.7
Summarized Growth Data Metrics for Weakness 1

Slope of function Average Encoding Error Standardized Growth

(increase in Y for every Rate for the year Rate
month)

0.00016 0.64% 0.00016

= 2.49%
0.0064

With respect to the monthly average, the standardized growth rate was found to

be 2.49%. This garners a growth score of 2.

W2. During the months of January 2022 to December 2022, an average of 14 items

were returned per month due to damages. This exceeds the maximum allowable

frequency of returns per month of 10 items by 4 items. This incurs an average

monthly approximate loss of P21,000 due to the loss in sales from damaged eyewear

and has a standardized growth rate of 1%.

Seriousness

The target set by the company for the number of returned damaged eyewear for

non-luxury and luxury goods per month should be less than ten eyewear. However, the

company failed to reach this target as the average number of damaged returns from

January 2022 to December 2022 was 14 eyewear, exceeding the allowable target by four.

106
Approximated Loss = (Average COGs per piece of eyewear) * Average Number of

Returns Due to Damaged Items

(Eq 4.3)

Eq. (4.3) above shows the formula for the approximate loss of non-luxury and

luxury eyewear due to damaged returns. Table 4.8 below illustrates the approximate

losses of damaged returned items calculated from the average COGs from the damaged

items by category of luxury and non-luxury eyewear.

Table 4.8
Summary of Approximate Losses for Damaged Returned Items

Average COGs of Average Number of Approximate

eyewear Returns Due to Loss per Month
Damaged Items

Non-Luxury P1500 14 P21,000

Luxury P2550 0 P0

Total P21,000

Damaged returned items incurred a monthly approximate loss of P21,000.

Therefore, a seriousness score of 1 is given.

107
Growth

Figure 4.2 - Number of Returns due to Damaged Items per Month

The trendline equation illustrated in Figure 4.2 shows that the number of damaged

returns is increasing by 0.14 monthly.

Standardized growth rate = Slope of trend function/Monthly average number of

damaged returns (Eq 4.4)

Similar to Weakness 1, the nominal slope was not used as the basis for the growth

score. Instead, the standardized growth rate was calculated using Eq. (4.4) above. The

0.14 increase per month returned damaged items would represent 1.00% of the monthly

average number of returns of 14. This is summarized in Table 4.9 below.

108
 Table 4.9
Summarized Growth Data Metrics for Weakness 2

Slope of function Average Monthly number Standardized Growth

(increase in Y for every of returns for the whole Rate
month) year

0.14 14 0.14
= 1.00%
14

With a standardized growth rate of 1.00%, weakness 2 obtained a growth score of

2.

4.2. Problem Statement

The encoding section experienced an average encoding error rate of 0.64% during

the months of January 2022 to December 2022 which exceeds the maximum allowable

encoding error rate of 0% by 0.64%. This incurs an average monthly approximate loss of

P82,083.33 with a standardized growth rate of 2.59%.

4.3. Problem Analysis

The problem of encoding errors were analyzed further using the P Chart to

monitor the performance of the encoding section from January 2022 to December 2022.

109
Figure 4.3 - P Chart of Encoding Errors found in Non Luxury (Top) and Luxury (Bottom)
Eyewear

Control Charting on the non luxury eyewear showcases 6 points which were not

within control limits, however only 3 points are above the UCL which is undesirable.

This would mean that there is statistically significant variance in terms of the quality

control of the encoding error rate in non luxury items. While this cannot be attributed to

any specific variable since the months show varying levels of error rates, it may be cause

ddue to the high volume of non luxury items comprising the majority of the volume of

110
moving items. In the Control chart done on the Luxury items however we can see that the

encoding error rate is much more consistent where there is no point that exceeds or falls

below both the upper and lower control limits. This can suggest that the error rates are

statistically significantly less variable. Additionally there seems to be the lowest encoding

error rates for the luxury items from months November to February. Further investigation

may be done to see possible causes for these performances.

4.3.1. Initial Stream Diagnosis

Thorough analysis of the system was conducted through effective documentation,

observation, and collection of data. The researchers conducted a total of two plant visits,

from which the group obtained knowledge of the overall system and firsthand

documentation, as shown in the appendix. The data collection process involved

interviews and demonstrations by the warehouse manager, head inbound and outbound

officials, encoders, assistants, and the pick and packers. The group was able to observe

the company’s encoding process through an elaborate walk through conducted by the

encoders. Due to the presence of time constraints and other restrictions, the researchers

utilized online means, such as phone calls and messaging applications, to facilitate

communication and further elaboration on the process and its vital details. Moreover, the

4M method was conducted when documenting the company’s current system and

consisted of four segments, Man, Material, Machine, and Method.

Illustrated in Figure 4.4 is the initial stream diagnosis chart that was developed

after a thorough analysis of the system.

111
Figure 4.4 – Initial Stream Diagnosis Chart

112
 4.3.2. Cause Validation

4.3.2.1. Data Input

4.3.2.1.1. Eyewear Attributes are Difficult to Distinguish

Reason for Probable Cause

Eyewears received by the company are in the thousands per month, as part of the

encoding process encoders must be able to distinguish between different eyewear

attributes from a variety of sizes, colors, and Frame styles. Due to the subtlety of these

different attributes it is not unlikely to believe that errors can be made due to the subtle

visual characteristics between different eyewears. Mistakes in incorrect identification

would lead to wrong codes being encoded and by extension wrong shipments or returns

on their deliveries to their customers.

Validation Method

In order to validate this root cause, two controlled experiments were conducted,

each involving 30 randomly selected pieces of eyewear. Participants, composed of both

regular and irregular/sporadic encoders, were tasked with inputting the correct eyewear

code into a computer which would entail details such as Brand, Frame style, color, size,

and the item code itself. In the first experiment, participants were given unlimited time to

completely encode 30 unique pieces of eyewear and thus were allowed to work at their

own pace. In order to better simulate real life conditions, the second experiment required

participants to encode another set of 30 unique pieces of eyewear with added time

pressure . The encoders were asked to perform the encoding under time pressure or under

113
the impression that they had to do a lot of orders within the day to make an encoding

deadline. For this root cause, the objective was the following:

1. To assess the types of misidentifications made in terms of Eyewear attributes

2. To assess the types of misidentifications made in terms of Eyewear attributes with

added time pressure/constraints.

Listed in Table 4.10 below are the validation steps for the root cause “Eyewear

Attributes are Difficult to Distinguish.”

Table 4.10
Steps for Validation Procedure of Eyewear Attributes are Difficult to Distinguish

Step Validation Procedure

1 Conduct controlled experiment:

a. Two sets of 30 randomly selected pieces of eyewear were given to
encoders
b. In the first set, the encoders were asked to encode and identify eyewear
attributes of 30 pieces of eyewear without a time limit.
c. In the second set, the encoders were asked to encoder and identify
eyewear attributes in a separate set of 30 pieces of eyewear under a
time constraint. This was done in order to simulate real life conditions
where encoders must work under time pressure.

2 Classify errors based on encoder misidentification of attributes such as size,

Color, and Frame style

3 The root cause is validated if there are 1 or more misidentifications in any

attribute

114
Results

Table 4.11
Breakdown on Style Error, Color Code Error, and Size Error
Glasses style/Rim Style Color Code
Error Error Size Error
No time limit 0 0 1
Time limit 1 1 4
Totals 1 1 5
% of total 0.21% 0.21% 1.05%

The data in Table 4.11 showed the summary of results where the main source of

the errors induced were in size identification, specifically when a time limit or constraint

was added. The raw data of the controlled experiment is found in Appendix K and

Appendix L. In the Time limited test where errors are supposedly more prone we can see

more significant errors were made in the sizing errors which further suggests that errors

are mostly made in this attribute identification. With a target error rate of 0% and an

actual error rate of 0.64% on average, we can clearly see that with or without time limits

eyewears are misidentified in the sizing attribute exceeding target standards. Therefore

this root cause is validated specifically for sizing misidentification.

4.3.2.2. Environmental Factors

4.3.2.2.1. Insufficient Lighting Conditions

Reason for Probable Cause

Light has a significant impact on visual cognitive task performance of the

encoders. Insufficient lighting in the workplace can lead to eye strain, physical problems,

and mistakes in encoding that ultimately decrease worker productivity and performance.

115
According to Yang et al (2019), the amount of illumination has a significant impact on a

person's attentiveness and alertness when they are indoors, which affects a worker's focus

and response time (Golmohammadi et al., 2021). When manually encoding each pair of

eyewear into the system, encoders mainly rely on their vision. The amount of light in the

workplace is important for ensuring that the codes encoded are exact and correct given

the volume of glasses that each encoder encodes each day. Additionally, manually

encoding eyeglasses can be very difficult because each eyewear's code variations may

only differ by a single number or character. Any error, no matter how small, may be very

costly for the company. As a result of this, employees exposed to inadequate lighting at

work may be more susceptible to vision-related errors that affect their ability to execute

their responsibilities correctly.

Similarly, in a study conducted by Salve (2006), on the study of visual problems

among electronic and jewelry workers, the workers are required to work with tiny visual

tasks and near visual distances that cause visual strain. The workers in this study

experienced vision performance with the substandard illumination levels in the

workplace. After improvements of lighting conditions, the inadequate lighting problem

that the workers faced decreased to 24.5% from the original 52% of workers who faced

vision problems. Like eyewear barcodes, these are small and difficult to read, which

may require near visual distances of similar visual tasks of the same size as those

jewelries. Furthermore, eyewear encoders may be required to identify minor variations

between eyewear and its code. These minor changes could be attributed to color, sizing,

or other minor features that distinguish one pair of glasses from another.

116
Validation Method

To validate whether insufficient light is a possible root cause of encoding errors

for encoders, the group conducted illumination level measurements in the encoding areas.

Light measurements were taken on five separate working days. The Lux Meter was used

to measure the light levels by selecting four representative points on the work plane and

measuring the illuminance at each point which was a similar method provided by the

Occupational Safety and Health Branch Labour Department (2008). The average of these

measurements is then calculated as the average illuminance at the task position.

According to Fördergemeinschaft Gutes Licht (1992), the minimum lighting

requirements recommended by DIN EN 12464 in office related tasks such as writing,

reading, and data processing is 500 lux. Additionally, according to Mui and Wong (2006),

the results showed that an indoor space illuminated with 518 lux would suit the needs of

office occupants in general, resulting in an 86% overall satisfaction rate. This level of

illumination is considered suitable for office environments, validating the 500 lux design

standard.

117
 Table 4.12
Steps for Validation Procedure of Insufficient Lighting Conditions

Step Validation Procedure

1 Conduct and compare light test:

a. Four representative points on the encoder’s workstation is selected
b. On each point, a Lux Meter was used to measure illuminance
c. Compare current illuminance level with RRLs

2 Interview and survey all encoders whether they are affected by current light
condition

3 Validation:
a. The root cause is validated if current light conditions collected by Lux
Meter is above 500 lux (Fördergemeinschaft Gutes Licht, 1992)
b. The root cause is validated if insights from interview and survey results
indicate that encoders remain unaffected by current lighting conditions

Results

Table 4.13
Breakdown of Light Levels (lx) in the Encoding Workspace

Date 9/20/23 9/29/23 10/5/23 10/11/23 10/19/23 Total

Average

Average light 170 162 159 152 157 161.2

levels (lx)

As seen in Table 4.13, all of the average lux levels recorded fall below the

acceptable 500 lux criteria. This shows that encoders are subjected to inadequate lighting

conditions, which would be detrimental to their visual and mental performances when

encoding. To further support these data, the group also conducted surveys and interviews

with all encoders to gather more information. Based on the interviews, most encoders

generally indicated that the light levels in the encoding area impacts their encoding

performances. To summarize, the results indicate that encoding tasks can be difficult due

118
to insufficient lighting in the workplace. Because of the inadequate lighting, participants

were having difficulty reading barcodes. Also, some individuals reported eye discomfort

and strain as a result of insufficient lighting.

The highest average lux level measured during the five days was 170 lx, which is

significantly lower than the mandated lux levels. The results of the survey can be used to

supplement the interview responses. According to the survey results in appendix I, the

majority, 6 out of 8 encoders, felt uncomfortable with the light levels in the encoding area

and had difficulty doing such tasks. This gives credibility to the idea that insufficient light

is a likely root cause of encoder mistakes. As a result, the root cause is validated.

4.3.2.2.2. Excessive Noise Distracts Workers

Reason for Probable Cause

All of the encoders of CP Optics work on the 26th floor within a small storage

room that occupies 36 square meters. The room is compact and filled with multiple

shelving racks surrounding the encoder's workspace. In smaller spaces like this, sound

tends to be more pronounced because there is less volume for sound to disperse.

Therefore, the slightest noise can be a significant distraction to the encoders.

Furthermore, the warehouse of CP Optics is located in between the accounting

department and the main office of its sister company. Hence, noise originating from these

neighboring areas may also contribute to the distractions faced by the encoders.

Furthermore, based on insights from prior interviews, it was revealed that all

encoders use a cognitive strategy known as chunking. Due to the complexity of the

119
encoding process, encoders heavily rely on their working memory and their cognitive

performance may be negatively affected by noise. For instance, Jafari et al. (2019) found

that noise diminishes accuracy and memory performance in complex tasks. Moreover,

Klatte (2013) also demonstrated that non-auditory tasks, such as short-term memory,

reading, and writing, can also be negatively affected by noise. Thus, it is reasonable to

believe that noise may significantly impact the cognitive performance of encoders as it

interferes with their working memory and concentration.

Validation Method

To validate whether excessive noise is a root cause of distraction for encoders, the

group conducted noise level measurements in their workplace. Measurements for noise

were collected for three hours on five different working days, reflecting the average

duration during which both regular and sporadic encoders perform their tasks. The Sound

Level Meter (SLM) was used to measure the noise levels, recording the minimum,

minimum and average A-weighted decibels. According to Mui et al. (2006), the optimal

noise level in air-conditioned offices must fall between the range of 45-70 dBA.

Additionally, Jafari et al. (2019), elaborates that cognitive performance only declines at

95 dBA and above. Therefore, the root cause will be validated if the current noise level

exceeds 95 dBA and above. The group also conducted surveys and interviews with all 8

encoders to further assess whether noise has a significant impact on their encoding

performance.

120
 Table 4.14
Steps for Validation Procedure of Excessive Noise Distracts Workers

Step Validation Procedure

1 Conduct and compare noise test:

a. Measure current noise levels in dBA with a Sound Level Meter
b. Compare current noise level results with RRLs

2 Interview and survey all encoders whether they are affected by current noise
levels

3 Validation:
a. The root cause is validated if current noise levels collected by Sound Level
Meter is equal or greater than 95 dBA (Jafari et al., 2019).
b. The root cause is validated if insights from interview and survey results
indicate that encoders remain unaffected by current noise levels.

Results

As seen in Table 4.15, all of the average noise levels measured were within the

average ranges of 44.6 to 78.4 dBA, which are all well within the recommended range. In

the encoding station, the minimum noise level usually occurs when all of the pickers,

packers and encoders in the warehouse are doing their respective task without any

communication, with a total average of 44.6 dBA. On the other hand, the maximum noise

levels usually transpire when workers are engaged in activities such as communicating,

opening and closing doors, and printing of barcode stickers, resulting in a total average

noise level of 78.4 dBA. Since none of the maximum noise levels exceeded the 95 dBA

threshold, this indicates that encoders are not subjected to any noise levels that would be

considered detrimental to their cognitive performance when encoding.

121
 Table 4.15
Breakdown of Noise Levels (dBA) in the Encoding Workspace

Date 9/20/23 9/29/23 10/5/23 10/11/23 10/19/23 Total

Average
Time 1:05 - 4:12 12:50 - 4:06 1:30 - 4:30 1:00 - 4:16 2:15 - 5:17

Minimum 43 46 45 42 47 44.6
Noise
(dBA)

Average 52 54 55 57 53 54.2
Noise
(dBA)

Maximum 75 78 81 76 82 78.4
Noise
(dBA)

To further support this data, the interview and survey results show that all seven

encoders generally indicated that noise did not have any impact on their encoding

performances at all. Based on the interview, all of the encoders found the printing of

documents and barcode stickers to be the loudest source of noise in their workstation, and

this was confirmed by the results of the total average maximum noise level. However, all

of the encoders mentioned that it had a negligible effect on their concentration. The

responses from the interview can be further backed up by the results of the survey, seen

in appendix H. The survey results show that all the encoders were comfortable with the

current noise levels, and none of them had to redo their encoding work due to

noise-related distractions. Moreover, no encoders found it challenging to concentrate with

the current background noise levels. This supports the notion that excessive noise is not a

significant root cause of distraction for the encoders. Therefore, the root cause is

invalidated.
122
 4.3.2.2.3. Encoding Workstation is Not Ergonomic

Reason for Probable Cause

The ergonomics of a workplace is defined as the study and design of the work

environment. This includes the interactions between the worker and their environment

and acts as a vital aspect that contributes to the comfort, productivity, and safety of the

workers (Koirala & Nepal, 2022). The encoders of CP Optics spend the majority of their

shift in the encoding workstation, which comprises a desk, chair, desktop computer or

laptop, printer, and other equipment. The main portion of the encoding process involves

the inspection and input of the eyewear barcode into the company’s system, wherein the

encoders maintain a seated position throughout the duration of their shift. Research

conducted by Singh and Singh (2018) found that the discomfort of employees in their

workplaces leads to difficulty in concentration and, subsequently, overall work

performance. Additionally, a study conducted by Singh and Kholi (2021) found that

prolonged sitting has adverse effects on both the welfare and productivity of workers at

computer workstations and is further supported by the findings of Wakaizumi et al.

(2021), wherein it was concluded that work performance is impaired during long

durations of sitting. The lack of an ergonomic workstation has also been shown to

increase the likelihood of fatigue and the development of musculoskeletal injuries or

disorders, which potentially impairs employees' ability to work (Chandra et al., 2009).

From this, it can be concluded that the ergonomics of the encoding workstation can

negatively impact a worker’s performance.

123
Validation Method

In order to validate the ergonomics of the encoding workstation, the Rapid Upper

Limb Assessment (RULA) test was conducted. The RULA test was carried out through

observation of 8 encoders during their respective encoding shifts, in order to identify the

workers’ most commonly used posture, from which the basis of the test and analysis were

performed. Throughout the four-hour encoding shift, images of the encoder's side profile

were taken around 30 minutes from the start of the shift and approximately 2 meters

away and perpendicular to the encoding workstation. Based on the images taken, the

RULA score and risk index measurements were obtained to determine the degree to

which workers are affected by their workstations. Surveys and interviews were also

conducted with the encoders.

Table 4.16
Steps for Validation Procedure of Encoding Workstation is Not Ergonomic

Step Validation Procedure

1 Conduct RULA test:

a. Observe encoders for the first 30 minutes of their respective encoding
shifts
b. After 30 minutes, image of the encoder’s side profile was taken
approximately 2 meters away and perpendicular to the encoding
workstation
c. Image of encoder’s side profile was then used as the basis for the RULA
worksheet
d. RULA score and Risk Index was calculated based on the worksheet

2 Interview and survey all encoders on whether they are affected by the current
encoding workstation set up

3 Validation:
a. The root cause is validated if the RULA score and Risk Index are
classified as a concern, a score of 5 and above, based on the metrics
provided in the RULA worksheet
b. The root cause is validated if insights from interviews and survey results
indicate that encoders are unaffected by the current workstation set up

124
Results

From the results determined from the RULA sheet, 3 of the encoders obtained a

score of 3 while the remaining 5 encoders obtained a score of 2 upon assessment, as

displayed in Table 4.17 below. From the score table displayed in the RULA sheet, a score

of 1-2 is classified as “acceptable posture”, while a score of 3-4 is classified as “further

investigation, change may be needed”. As more than half of the encoders experienced

low-risk level scores with regard to the results of the test and its respective action levels,

it can be concluded that the ergonomics of the encoding workstation does not impact the

occurrence of encoding errors.

Table 4.17
Breakdown of RULA Score for Each Encoder

Encoder 1&2 3&4 5&6 7 8

Date 9/20/23 9/29/23 10/5/23 10/11/23 10/19/23

Time 2:05 - 2:40 1:50 - 2:25 2:30 - 3:00 2:00 - 2:35 3:15 - 3:47

RULA Score 3 2 2 3 2

Further Acceptable Acceptable Further Acceptable

Investigation, Posture Posture Investigation, Posture
Risk Index
Change may be Change may be
Needed Needed

Moreover, the findings from additional surveys and interviews further supported

the data obtained from the RULA test. Based on the survey, the encoders found their

current encoding workstation to be quite comfortable yet prone to fatigue. The presence

of fatigue can be attributed to the prolonged sitting experienced by the encoders during

each shift. Despite this, the encoders also stated that the current location of the encoding

equipment allows them to maintain the correct posture during encoding, supporting the

125
results of the RULA scores obtained. Therefore, it is determined that the root cause is

invalidated.

4.3.2.2.4. Mental Workloads are Poorly Planned

Reason for Probable Cause

The main task of the encoders is to input the barcodes of the different eyewear

that are received into the company’s database system. Although a relatively monotonous

task, the encoders require large levels of cognitive load, in terms of performance and

effort, in order to accomplish the task, as the format of barcodes from different suppliers

may not always match the existing format of CP Optics. This prompts the need to assess

and convert the barcodes into the company’s own format. Research conducted by Aricò et

al. (2016) found that mental overload, fatigue, and lack of attention are some of the

primary reasons for the occurrence of errors. Continuous conversion and input of

eyewear barcodes for extended periods of time utilizes high levels of mental workload,

due to the attention to detail and accuracy required by the encoders. Thus, it can be

concluded that the lack of mental workload management impacts the occurrence of

encoding errors.

Validation Method

The validation of the encoders’ mental workload is conducted using the NASA

Task Load Index test. The NASA-TLX test consisted of a two-part questionnaire that was

administered to the encoders immediately after the end of their encoding shift. The test

was conducted on five different working days, to reflect the variations in workload. The

126
mental workload of the encoders was assessed through pairwise comparisons and ratings

of their mental demand, physical demand, temporal demand, performance, effort, and

frustration. The data obtained from the questionnaires were utilized to calculate the

NASA TLX score or the average weighted workload score from which the mental

workload is assessed.

Table 4.18
Steps for Validation Procedure of Mental Workloads are Poorly Planned

Step Validation Procedure

1 Conduct NASA-TLX test:

a. Provide encoders with the pairwise comparison of the six mental
workload factors
b. Provide encoders with the rating sheet of the six mental workload factors
c. Collect the data from the two part questionnaire. Tally the pairwise
comparisons, quantify the ratings of the mental workload, and calculate
the NASA TLX score

2 Validation:
The root cause is validated if the NASA TLX score is classified as high, score
of above 50, based on the metrics provided in the NASA TLX test and related
RRLs

Results

Table 4.19
Breakdown of NASA TLX Score for Each Encoder

Encoder 1&2 3&4 5&6 7 8

Average
Date 9/20/23 9/29/23 10/5/23 10/11/23 10/19/23
NASA
MWL 1. Performance TLX
Factor 2. Effort Score
Ranking 3. Temporal Demand

NASA TLX
52.67 56.33 59.67 56.67 57.00 57.67 58.67 58.33 57.13
Score

127
 The results of the 8 encoders are displayed in Table 4.19 above. With an average

MWL score of 57.13, the encoders of CP Optics can be interpreted to have high levels of

mental workload during the encoding process. The weighted workload of the encoders

ranged from 52.67 to 59.67, which signifies that encoding of eyewear barcodes requires a

substantial amount of cognitive effort and performance. Higher workload levels have

been known to increase fatigue in employees, which in turn impairs their work

performance (Fan & Smith, 2017). Based on the ratings from the NASA TLX

questionnaire, the encoders collectively experienced higher levels of performance, effort,

and temporal demand. The encoders experience a constant need to perform the encoding

task successfully and effectively. This is especially so when the encoders need to meet a

specific deadline within a slim timeframe. Research conducted by Yurko et al. (2010)

concluded that an increased presence of mental workload increases the occurrence of

errors when carrying out tasks. Therefore, the root cause that mental workloads are

poorly planned is validated.

4.3.2.3. Information

4.3.2.3.1. Difficulty in Differentiating Code

Reason for Probable Cause

Eyewears received by the company are in the thousands per month where each

eyewear aside from its physical attributes can be identified by the unique item and brand

codes specific to each supplier. As such, there is a variety of coding conventions, formats,

and variations not only across suppliers but even with the same branded items. Due to the

complexity and variety of coding formats, a simple added period or dash, a single digit

being mistyped can cause the eyewear to be completely misidentified in the digital
128
inventory system. Thus, this was seen to be a possible cause of the encoding error rates of

the large volumes of eyewear received.

Validation Method

In order to validate this root cause, two controlled experiments were conducted,

each involving 30 randomly selected pieces of eyewear. Participants, composed of both

regular and irregular/sporadic encoders, were tasked with inputting the correct eyewear

code into a computer which would entail details such as Brand, Frame style, color, size,

and the item code itself. In the first experiment, participants were given unlimited time to

completely encode 30 unique pieces of eyewear and thus were allowed to work at their

own pace. In order to better simulate real life conditions, the second experiment required

participants to encode another set of 30 unique pieces of eyewear with added time

pressure. The encoders were asked to perform the encoding under time pressure or under

the impression that they had to do a lot of orders within the day to make an encoding

deadline. For this root cause, the objective was the following:

3. To assess the Item Code and Brand code errors made

4. To assess the Item Code and Brand code errors with added time

pressure/constraints.

129
 Table 4.20
Steps for Validation Procedure of Difficulty in Differentiating Code

Step Validation Procedure

1 Conduct controlled experiment:

a. Two sets of 30 randomly selected pieces of eyewear were given to
encoders
b. In the first set, the encoders were asked to encode based on item and
brand code of 30 pieces of eyewear without a time limit.
c. In the second set, the encoders were asked to encode a set of 30 pieces of
eyewear under a time constraint. This was done in order to simulate real
life conditions where encoders must work under time pressure.

2 Classify errors based on encoding errors in Item and Brand Codes.

3 The root cause is validated if there are 1 or more errors Item and Brand Coding

Results

Table 4.21
Breakdown of Brand Code Error and Item Code Errors

Brand Code Error Item Code Error

No time limit 0 0
Time limit 0 0
Totals 0 0
% of total 0.00% 0.00%

The data showed the following results where there was virtually no errors in both

groups in encoding brand and Item codes. This suggests that there is no problem when

encoding these two specific parts of an SKU. With a target error rate of 0% and an actual

error rate of 0.0% on average, we can clearly see that with or without time limits the item

and brand encoding met target standards. Therefore this root cause is invalidated.

130
 4.3.2.3.2. Lack of Standardized Encoding Procedure

Reason for Probable Cause

Encoding errors occur from the input of incorrect eyewear codes into the system

which can result in two primary issues. First, this may lead to the unintentional addition

of stock units to a different eyewear SKU thus causing a discrepancy between inventory

counts and records in the ERP system. Second, it can lead to the creation of duplicate

SKUs, effectively creating virtual products. According to management, if a duplicate

SKU is created, the stock units are added in both SKU’s. Removing duplicates is not

feasible because, at the instance of creation, cost records become associated with the

addition of stock units, impacting accounting records. Even the slightest change in SKU

format, for instance the addition of a dash (-), would lead to the creation of a new SKU in

CP Optics’ ERP system. Given the encoding errors arising from differences in encoding

formats, it is reasonable to believe that the encoding procedure lacks standardization

leading to different interpretations creating an SKU of the same eyewear piece.

Validation Method

Listed in Table 4.22 below is the validation steps for the root cause “Lack of

Standardized Encoding Procedure.”

131
 Table 4.22
Steps for Validation Procedure of Lack of Standardized Encoding Procedure

Step Validation Procedure

1 Interview Head Encoder on the procedure that is being taught to encoders.

Observe the actual encoding process performed by the Head Encoder.

2 Conduct controlled experiment:

a. Two sets of 30 randomly selected pieces of eyewear were given to
encoders. In each set, 7 unencountered new eyewear pieces (not yet
registered in the system) were presented to encoders
b. In the first set, the encoders were asked to encode 30 pieces of eyewear
without a time limit. For the first piece of eyewear, participants were
asked to recite out loud their procedure while encoding.
c. In the second set, the encoders were asked to encoder a separate set of 30
pieces of eyewear under time pressure. This was done in order to
simulate real life conditions where encoders must work under time
pressure.

3 Procedural Analysis
a. Summarize the procedure taught by the head encoder.
b. Compare procedure taught by head encoder with procedure being
followed by encoders and generate insights

4 New SKU Format Standardization

a. Tabulate frequency of errors attributed to new eyewear pieces not yet
registered in the system.
b. Compare errors found in registered eyewear pieces vs. those found with
unregistered SKU eyewear.

5 The frequency of errors found in unregistered eyewear brands, discrepancies

between procedures followed by encoders, and failure points in the encoding
procedure would validate this root cause.

The encoding procedure is taught by the head encoder and according to

management, there is no official manual detailing the procedure. Encoders are expected

to follow the procedure taught by the head encoder given his extensive experience. It is

important that all encoders adhere to this procedure because the SKU formats created by

the head encoder serve as reference points for other departments such as accounting. The

head encoder was interviewed and together with observation, a flowchart was created in
132
order to determine the set procedure that must be followed by all encoders. This is

illustrated in Figure 4.5.

133
Figure 4.5a - Encoding Procedure Part 1

134
Figure 4.5b - Encoding Procedure Part 2

135
 Figure 4.5 illustrates the encoding procedure taught by the head encoder. The

process begins when an encoder receives a delivery receipt. In order to associate

delivered items with a delivery receipt, the encoder adds the delivery receipt number in

the ERP system. Since the eyewears arrive inside their packages, the encoder would need

to carefully unpack each eyewear allowing them to more closely examine the eyewear

and barcode on the packaging. Encoders manually inspect each eyewear and identify two

eyewear attributes namely frame classification and size of eyewear.

The delivery receipt includes item numbers which, in most cases, would match

the item code on the packaging and eyewear itself. There are some suppliers however

who follow their own item number format written on the delivery receipt. The encoder

must therefore verify if the item number matches the item code written on the eyewear

and packaging. If found to be matching, the item number on the delivery receipt may be

used as a reference for item code. Otherwise, the item code written on the eyewear must

be used as reference.

After entering the delivery receipt number into the system, the encoder would

then begin encoding the eyewear starting with the input of brand code followed by the

frame classification code, item code, color code, and size code. These components make

up the SKUs of eyewear pieces. Finally, the encoder would input the quantity of eyewear

received which can be based on the delivery receipt.

136
 During the encoding process, while an encoder is inputting an SKU in the system,

the ERP system may provide possible selections which match the SKU being inputted. In

such cases, the encoder may simply select one of the SKU options being presented.

However, if the encoder finishes typing the entire SKU and no matching option is

identified by the ERP system, this indicates the receipt of a new eyewear outside the

system, in other words a new item. This SKU may be added as a new eyewear item in

inventory. It is then the responsibility of the encoder who received this new eyewear

piece to write down the SKU format he/she followed in a post it note and place this on a

designated board. This format should be used as reference for any other encoder who

receives the new eyewear.

As an extension of the controlled experiment conducted for the preceding root

cause “Difficulty in Differentiating Code” (Section 4.3.2.4.1), participants were

instructed to verbally explain their encoding process for the first piece of eyewear. The

process as described by each participant was then compared with the procedure taught by

the head encoder. The alignment of procedures followed by the encoders was then

compared with the procedure taught by the head encoder (as illustrated in Figure 4.5).

The objective of this comparison is to validate or invalidate the root cause of “The Lack

of Standardized Encoding Procedure.” Furthermore, the encoding procedure was

analyzed and discussed with management in order to determine possible points of failure

that may arise.

137
Results

At the end of the controlled experiment, the procedural knowledge of all encoders

were summarized and compared against the procedure taught by the head encoder. The

discrepancies in the procedures followed by encoders are represented as failure points

within the process. A discrepancy occurs as it differs from the procedure taught by the

head encoder. In addition, process steps with a high risk of creating errors are highlighted

and placed as failure points. Note that the points of failure highlighted below focus on

steps in the procedure rather than potential individual errors created by encoders, for

instance, a possible misidentification of eyewear attributes. The failure points are

overlaid on the process flowchart in Figure 4.6 below.

138
Figure 4.6a - Encoding Procedure with Highlighted Points of Failure Part 1

139
Figure 4.6b - Encoding Procedure with Highlighted Points of Failure Part 2
140
Point of Failure 1: Failure to verify item number on delivery receipt with item code on

packaging and eyewear

For the first piece of eyewear given to a participant in the controlled experiment,

they were asked to say out loud the process they’re going through as they’re encoding.

This was summarized and compared against the procedure taught by the head encoder.

Based on the flowchart illustrated in Figure 4.4, encoders must first verify if the item

number written on the delivery receipt matches that on the packaging and on the eyewear.

This would dictate whether the item number on the delivery receipt can be used as basis

for item code. Listed below are the types of errors that were identified to be created by

encoders when compared against the procedure taught by the head encoder.

Type A Error: Encoder copies item number on delivery receipt directly without

verifying that it matches with item code written on the packaging and on the eyewear.

Type B Error: Should the item number on delivery receipt not match item code on

packaging/eyewear, the encoder refers to the item code on packaging.

The summarized results are presented graphically in Figure 4.7 below.

141
 Figure 4.7 - Bar Chart of Frequency of Procedural Errors Committed by Encoders

Based on Figure 4.7, it can be seen that a total of 4 encoders indicated that they

verify the item number on the delivery receipt with the item code written on the box and

on the eyewear. This aligns with the procedure taught by the head encoder.

Two encoders exhibited Type A Errors in which they refer to the item number

written in the delivery receipt directly without verifying that it matches with the item

code written on the packaging and on the eyewear. After discussing with management, it

was found that this verification procedure was added since there are a number of

suppliers that follow their own item number format for the delivery receipt which differs

from the actual item code. This is not always the case however as most suppliers would

use the same format. This could potentially create errors though if the encoder encounters

an item from a supplier that has their own item number format.
142
 One encoder exhibits Type B Error in which they base the item code on the

packaging should it not match with that written on the delivery receipt. This is an error

because it there are times when there is a supplier format error on the barcode thus

leading to a different item code than that written on the eyewear itself. As a rule of

thumb, the item code written on the eyewear is the most trusted code.

Possible reasons why encoders would skip through this step is to increase the

speed in encoding. Although the item code written on the eyewear is the most trusted

source, it is often harder to read due to its small font size. There are eyewear pieces with

very thin eyewear frames thus making the item code harder to decipher. The item number

written on the delivery receipt is more understandable and easier to read thus making it

more convenient to copy when in a rush.

Point of Failure 2: Incorrect conversion of identified attribute to SKU format

When inputting recurring eyewear pieces into the ERP system, encoders must not

only identify the correct attribute of the eyewear piece but also convert this attribute

correctly into the proper SKU format that is understood by the ERP system. If the

encoder accurately recognizes the eyewear attribute but converts it to an incorrect SKU

format, it can result in an encoding error. This error may lead to the selection of the

wrong product in the ERP system.

143
Point of Failure 3: Potential miscommunication during standard format dissemination

An important step must be highlighted in the encoding procedure detailed in

Figure 4.6 should an encoder encounter a new piece of eyewear not yet in the system.

Based on discussions with management, when a new eyewear piece enters the system, the

encoder that first encounters it is responsible for setting the format of the SKU that would

be followed by everyone. Afterward, it is their responsibility to write it down on a post-it

note and place this on the designated board for everyone to see. Thus, if another encoder

encounters the new product, they must follow the format as stated in the post-it. Included

in the controlled experiment conducted for the preceding root cause “Difficulty in

Differentiating Code” (Section 4.3.2.4.1), each encoder was presented with seven (7) new

eyewear pieces that they had not encountered previously. It was confirmed with

management that the eyewear pieces had just arrived and only the head of the encoding

section had seen them. The purpose of presenting unencountered pieces of eyewear is to

assess whether, given a new piece of eyewear, encoders would have different

interpretations of eyewear SKU’s. Since this process relies heavily on the dissemination

of code formats to all encoders, this test was conducted to see if miscommunication in

this step of the encoding procedure could lead to encoding errors. If it was found that

encoders have different interpretations of a new eyewear, this would mean that

miscommunication of the format set by the first encoder who encountered the eyewear

piece could result in encoding errors.

Table 4.23 below illustrates the frequency of errors created by encoders in the

controlled experiment classified whether this error was made on a recurring brand or a

144
new brand. This is further represented by a bar chart in Figure 4.7. The correct SKU

format for the new brands were based on the format given by the head encoder, who was

the most experienced encoder.

Table 4.23
Frequency of Errors Between Old Eyewear and New Eyewear
No time limit With time limit
New Old New
Old Eyewear Eyewear Eyewear Eyewear
Frequency of Errors 0 1 1 5
% Error 0.00% 2.86% 0.53% 14.29%

Based on Table 4.23, it can be seen that all errors made by encoders during the

controlled experiment were found on eyewear pieces that have not been encountered

previously. Whether a time limit was placed or not, no errors were created with recurring

eyewear. Only 1 out of the 189 recurring (old) eyewear had an error while time pressure

was applied. When presented with unencountered eyewear pieces, without a time limit, 2

of the 35 new eyewear pieces had SKUs that differed from that set by the head encoder.

Given a time limit, it can be seen that more errors were created with 10 out of the 35 new

eyewear pieces having SKUs which differ from that set by the head encoder. After

discussing this with management, it was found that if no pre existing record of a product

is found in the system, the chances of creating SKUs following a different format

increases greatly. This is especially so given that only small differences in an SKU would

lead to an encoding error, for instance the addition of a dash (-). This is evidenced by the

results of the controlled experiment illustrated in Table 4.23 and Figure 4.7.

145
Point of Failure 4: Lack of a quality assurance procedure

CP Optics takes a reactive approach to the problem of encoding errors. The

encoding section is alerted of encoding errors due to discrepancies in the Accounting

Department. It is only then that the head encoder would scrub through the SKUs and

stock units in the ERP systems to identify the source of discrepancy. As shown in Figure

4.6, the encoding procedure lacks processes that track the performance of the encoding

section.

The potential root cause of “Lack of Standardized Encoding Procedure” is

therefore validated due to three reasons. It was found that the procedure taught by the

head encoder is not completely followed by all encoders. This is evidenced by the

discrepancies in the procedure followed by the encoders when compared to the set

procedure taught by the head encoder. Second, through analysis and discussions with

management, miscommunication of new formats created by the encoder who first

received a new eyewear may lead to encoding errors. This was verified through the

controlled experiment in which, given the freedom to set new formats, encoders would

have different interpretations compared with the SKU format set by the head encoder.

Being the most experienced, the SKU format set by the head encoder was treated as the

official correct SKU format. Third, the procedure followed in the encoding section does

not allow for quality assurance or performance tracking measures. In conclusion, given

these three reasons, the root cause of lack of standardized encoding procedures is

therefore validated.

146
 4.3.2.4. Man

4.3.2.4.1. Some Encoders are Unqualified

Reason for Probable Cause

Encoders can be divided into two classifications, regular and irregular encoders.

Regular encoders refer to those employed by the company whose job description involves

encoding incoming eyewear. Currently, there are 3 regular encoders employed by the

company. On the other hand, irregular or sporadic encoders refer to those individuals

employed by CP Optic’s sister company, who occasionally assist the encoding

department of CP Optics during periods of high sales volume. According to management,

this would usually occur during significant sales events such as those on e-commerce

platforms like Lazada and Shopee, for instance the 11.11 or 7.7 sales events. This may

occur as well during rush order situations. There are a total of 4 sporadic encoders that

are employed under CP Optics’ sister company next door that would occasionally help in

the encoding department of CP Optics. The availability of these sporadic encoders

however would depend on their schedules with their primary company.

The presence of sporadic encoders may introduce potential sources of errors

within the encoding department. As these encoders are from a different company selling

their own assortment of products, they may lack the experience required to encode

eyewear, which could result in mistakes.

Validation Method

Listed in Table 4.24 below is the validation steps for the root cause “Some

Encoders are Unqualified.”.

147
 Table 4.24
Steps for Validation Procedure of Some Encoders are Unqualified

Step Validation Procedure

1 Conduct controlled experiment:

a. Two sets of 30 randomly selected pieces of eyewear were given to
encoders
b. In the first set, the encoders were asked to encode 30 pieces of eyewear
without a time limit.
c. In the second set, the encoders were asked to encoder a separate set of 30
pieces of eyewear under time pressure. This was done in order to
simulate real life conditions where encoders must work under time
pressure.

2 Classify errors based on encoder classification: irregular/sporadic vs regular

encoders

3 Validated if majority of errors are caused by irregular/sporadic encoders.

As an extension of the controlled experiment in Section 4.3.2.1.1, the frequency

of errors were classified based on which type of encoder the error came from: regular or

irregular encoder. The objective of this procedure is to assess whether there are

performance differences between regular and irregular encoders.

Results

The results of the controlled experiment are summarized in Table 4.25 below.

148
 Table 4.25
Frequency of Errors Between Regular Encoders and Irregular Encoders
No time limit With time limit
Regular Irregular Regular Irregular
Brand Code Error 0 0 0 0
Glasses style/Rim Style Error 0 0 0 1
Item Code Error 0 0 0 0
Color Code Error 0 0 0 1
Size Error 0 1 1 3
Total 0 1 1 5
% of total 0.00% 0.15% 0.20% 0.74%

Table 4.25 illustrates the frequency of errors classified between regular encoders

and irregular/sporadic encoders. Given no time pressure while encoding 30 pieces of

eyewear, regular encoders created no mistakes in the SKU formats. On the other hand,

among irregular encoders, 2 errors were found representing 0.15% of eyewear attributes

that are identified by encoders. It can be seen with this information that without the

presence of a time limit, irregular encoders created more errors than regular encoders.

The same pattern is seen with the addition of a time limit. While regular encoders had 2

errors in SKU formats, irregular encoders had 5 total errors. In both sets of the controlled

experiment, with and without time limits, more errors were found among irregular

encoders. As such, the root cause of “Some Encoders are Unqualified” is validated.

4.3.3. Final Stream Diagnosis

Illustrated in Table 4.26 below is a summary of probable causes along with the

result of their respective validation methods.

149
 Table 4.26
Summary of Validated and Invalidated Probable Causes

Category Probable Cause Validation Method Validation Result

Data Input Eyewear Attributes Eyewear Encoding Valid

are Difficult to Test/Simulation
Distinguish

Environmental Insufficient Lux Test Valid

Conditions Lighting Conditions

Excessive Noise Noise exposure Test Invalid

Distracts Workers

Encoding RULA Invalid

Workstation is Not
Ergonomic

Mental Workloads NASA TLX Valid

are Poorly Planned

Information Difficulty in Eyewear Encoding Invalid

Differentiating Test/Simulation
Code

Lack of Eyewear Encoding Valid

Standardized Test/Simulation
Encoding
Procedure

Man Some Encoders are Eyewear Encoding Valid

Unqualified Test/Simulation

The initial stream diagnosis chart (Figure 4.3) was revised based on the results of

the validation of probable causes (Table 4.26). The final stream diagnosis chart is

illustrated in Figure 4.8 below.

150
Figure 4.8 - Final Stream Diagnosis Chart

151
 4.3.4. Percent Contribution

The amount that each root cause contributes to the encoding error problem was

calculated from the controlled experiment. Each error committed in the controlled

experiment was classified under one root cause. A preliminary step was performed to

determine whether a root cause can be assigned to an error committed. A summary of the

cause assignability is illustrated in Table 4.27.

Table 4.27
Summary of Root Cause Assignability

Validated Root Cause Cause Assignability

RC1: Eyewear Attributes are Difficult to Distinguish Assignable Cause

RC2: Lack of Standardized Encoding Procedure Assignable Cause

RC3: Some Encoders are Unqualified Assignable Cause

RC4: Insufficient Lighting Conditions Unassignable Cause

RC5: Mental Workloads are Poorly Planned Unassignable Cause

RC4 and RC5 are root causes under the environmental conditions category. Based

on the controlled experiment conducted in which encoders were asked to encode two sets

of 30 pieces of eyewear, RC4 and RC5 were unable to be assigned as contributing factors

to specific errors committed by encoders. As such, these are unassignable causes. After

evaluating the errors committed by encoders and classifying them, RC1, RC2, and RC3

were found to be root causes that contribute to specific types of errors committed. The

classification of error types which lead to it being assigned to a root cause is listed in

Table 4.28 below.

152
 Table 4.28
Breakdown of Error Classifications Categorized Under RC1 to RC3

Validated Root Cause Error Type

RC1: Eyewear Attributes are Difficult to Distinguish Incorrect Frame Style

Incorrect Size

Incorrect Color

RC2: Lack of Standardized Encoding Procedure Error in Recurring

Eyewear Piece

RC3: Some Encoders are Unqualified Error in Unencountered

Eyewear Piece

Error Committed by a
Regular Encoder

Error Committed by an
Irregular Encoder

The final tally of errors were represented as a pareto chart shown in Figure 4.9 to

determine the percent contribution of each root cause towards the problem of encoding

errors.

153
 Figure 4.9 - Pareto Chart of Assignable Causes

Further analysis through a pareto chart on the assignable causes shows that a

cumulative 80% of the errors committed in the tests were items that had new brands,

items encoded by irregulars, and sizing misidentifications in that order. This would

suggest that aside from the general root causes being identified such as lack of

standardization in the encoding procedure, the eyewear attributes being difficult to

distinguish, and some encoders being unqualified. The root causes are further broken

down into the specific variables as shown in the pareto chart above.

154
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255
 APPENDICES

Appendix A: Receiving Process Document

Figure A.1 - Sample Picture of Purchase Order

256
Appendix B: Sample Luxury Eyewear

Figure B.1 - Sample Eyewear

257
Appendix C: Stocking and Storing Process Document

Figure C.1 - Inventory Count Sheet

258
Figure C.2 -Aging Stock Journal

259
Appendix D: Loading Process Document

Figure D.1 - Packlist

260
Appendix E: Delivery Process Document

Figure E.1 - Delivery Note

261
 Figure E.2 - Inventory transfer order

Appendix F: Return Process Document

Figure F.1 - Return Slip

262
Appendix G: Warehouse Shelves

Figure G.1a - Dimensions of Shelves in Warehouse

263
Figure G.1b - Dimensions of Shelves in Warehouse

264
Appendix H: Excessive Noise Survey Data

Figure H.1 - Excessive Noise Question 1

Figure H.2 - Excessive Noise Question 2

265
Figure H.3 - Excessive Noise Question 3

Figure H.4 - Excessive Noise Question 4

266
Figure H.5 - Excessive Noise Question 5

267
Appendix I: Insufficient Lighting Survey Data

Figure I.1 - Insufficient Lighting Question 1

Figure I.2 - Insufficient Lighting Question 2

268
Figure I.3 - Insufficient Lighting Question 3

Figure I.4 - Insufficient Lighting Question 4

269
Figure I.5 - Insufficient Lighting Question 5

Figure I.6 - Sample Pictures of Lux Recording

270
Appendix J: RULA Worksheet

Figure J.1 - Encoder #1 Side Profile

271
Figure J.2 - RULA Worksheet for Encoder #1

272
Appendix K: Controlled Experiment Results (Without Time Limit)

Glasses Item Color

Regular or Brand Code style/Rim Code Code Size
Encoder # Irregular Brand Supplier Error Style Error Error Error Error
1 Regular Brand PD PD MS 8484 A 67 N No No No No No
1 Regular Brand PD PD MST 8514 A 65 D No No No No No
1 Regular Brand PD PD PS 8464 A 60 N No No No No No
1 Regular Brand PD PD 8505 E 125 Sunglass No No No No No
1 Regular Brand PD PD 8480 A 66 No No No No No
1 Regular Brand PD PD PS 8908 D 63 HC No No No No No
1 Regular Brand PD PD MS 8507 B 136 D No No No No No
1 Regular Brand FE FE MS 612 Scaglietti 40568 HJ No No No No No
1 Regular Brand FE FE MS California T 40319 HJ No No No No No
1 Regular Brand FE FE PS 308 GTS 13173 09 HT No No No No No
1 Regular Brand FE FE PS Testarossa 13247 12 HT No No No No No
1 Regular Brand FE FE MS GTO 13249 31 HT No No No No No
1 Regular Brand FE FE PS Team 2012 13240 09 HT No No No No No
1 Regular Brand DH DH MS 1010 B 142 D No No No No No
1 Regular Brand DH DH MST 1002 A 60 D No No No No No
1 Regular Brand DH DH PS 1009 A 52 D No No No No No
1 Regular Brand DH DH MST 5004 C 58 D No No No No No
1 Regular Brand DH DH PS 7005 B 53 G No No No No No
1 Regular Brand DH DH PS 7007 C 59 G No No No No No
1 Regular Brand DH DH PS 3010 D 58 G No No No No No
1 Regular Brand BA BA MS 2000 00 Sil Blk Gry 57 HC No No No No No

273
1 Regular Brand BA BA PS 2001A 01 Tor/Brn 55 HT No No No No No
1 Regular Brand BA BA PS 4000A 01 Tor/Brn 57 HT No No No No No
1 Regular Brand BA BA MS 4038A C01 Pall 60 HP No No No No No
1 Regular Brand BA BA MS 4002A 22 Cacao Brn 60 HC No No No No No
1 Regular Brand BA BA MS 4002A 32 Choco Brn 60 HC No No No No No
1 Regular Brand BA BA PS 4010A 00 Blk/Grn 61 HT No No No No No
Brand AD AD PS AOR000.001.009 53 HJ
1 Regular (new) No No No No No
Brand AD AD PS AOR001.027.149 52 HJ
1 Regular (new) No No No No No
Brand AD AD PS AOR002.144.009 52 HJ
1 Regular (new) No No No No No
Brand AD AD PS AOR003.TPS.009 50 HJ
1 Regular (new) No No No No No
Brand AD AD PS AOR004.148.001 52 HJ
1 Regular (new) No No No No No
Brand AD AD PS AOR001.009.063 52 HJ
1 Regular (new) No No No No No
Brand AD AD PS AOR003.053.021 50 HJ
1 Regular (new) No No No No No
2 Regular Brand PD PD MS 8484 A 67 N No No No No No
2 Regular Brand PD PD MST 8514 A 65 D No No No No No
2 Regular Brand PD PD PS 8464 A 60 N No No No No No
2 Regular Brand PD PD 8505 E 125 Sunglass No No No No No
2 Regular Brand PD PD 8480 A 66 No No No No No
2 Regular Brand PD PD PS 8908 D 63 HC No No No No No
2 Regular Brand PD PD MS 8507 B 136 D No No No No No

274
2 Regular Brand FE FE MS 612 Scaglietti 40568 HJ No No No No No
2 Regular Brand FE FE MS California T 40319 HJ No No No No No
2 Regular Brand FE FE PS 308 GTS 13173 09 HT No No No No No
2 Regular Brand FE FE PS Testarossa 13247 12 HT No No No No No
2 Regular Brand FE FE MS GTO 13249 31 HT No No No No No
2 Regular Brand FE FE PS Team 2012 13240 09 HT No No No No No
2 Regular Brand DH DH MS 1010 B 142 D No No No No No
2 Regular Brand DH DH MST 1002 A 60 D No No No No No
2 Regular Brand DH DH PS 1009 A 52 D No No No No No
2 Regular Brand DH DH MST 5004 C 58 D No No No No No
2 Regular Brand DH DH PS 7005 B 53 G No No No No No
2 Regular Brand DH DH PS 7007 C 59 G No No No No No
2 Regular Brand DH DH PS 3010 D 58 G No No No No No
2 Regular Brand BA BA MS 2000 00 Sil Blk Gry 57 HC No No No No No
2 Regular Brand BA BA PS 2001A 01 Tor/Brn 55 HT No No No No No
2 Regular Brand BA BA PS 4000A 01 Tor/Brn 57 HT No No No No No
2 Regular Brand BA BA MS 4038A C01 Pall 60 HP No No No No No
2 Regular Brand BA BA MS 4002A 22 Cacao Brn 60 HC No No No No No
2 Regular Brand BA BA MS 4002A 32 Choco Brn 60 HC No No No No No
2 Regular Brand BA BA PS 4010A 00 Blk/Grn 61 HT No No No No No
Brand AD AD PS AOR000.001.009 53 HJ
2 Regular (new) No No No No No
Brand AD AD PS AOR001.027.149 52 HJ
2 Regular (new) No No No No No
Brand AD AD PS AOR002.144.009 52 HJ
2 Regular (new) No No No No No

275
 Brand AD AD PS AOR003.TPS.009 50 HJ
2 Regular (new) No No No No No
Brand AD AD PS AOR004.148.001 52 HJ
2 Regular (new) No No No No No
Brand AD AD PS AOR001.009.063 52 HJ
2 Regular (new) No No No No No
Brand AD AD PS AOR003.053.021 50 HJ
2 Regular (new) No No No No No
3 Regular Brand PD PD MS 8484 A 67 N No No No No No
3 Regular Brand PD PD MST 8514 A 65 D No No No No No
3 Regular Brand PD PD PS 8464 A 60 N No No No No No
3 Regular Brand PD PD 8505 E 125 Sunglass No No No No No
3 Regular Brand PD PD 8480 A 66 No No No No No
3 Regular Brand PD PD PS 8908 D 63 HC No No No No No
3 Regular Brand PD PD MS 8507 B 136 D No No No No No
3 Regular Brand FE FE MS 612 Scaglietti 40568 HJ No No No No No
3 Regular Brand FE FE MS California T 40319 HJ No No No No No
3 Regular Brand FE FE PS 308 GTS 13173 09 HT No No No No No
3 Regular Brand FE FE PS Testarossa 13247 12 HT No No No No No
3 Regular Brand FE FE MS GTO 13249 31 HT No No No No No
3 Regular Brand FE FE PS Team 2012 13240 09 HT No No No No No
3 Regular Brand DH DH MS 1010 B 142 D No No No No No
3 Regular Brand DH DH MST 1002 A 60 D No No No No No
3 Regular Brand DH DH PS 1009 A 52 D No No No No No
3 Regular Brand DH DH MST 5004 C 58 D No No No No No
3 Regular Brand DH DH PS 7005 B 53 G No No No No No

276
3 Regular Brand DH DH PS 7007 C 59 G No No No No No
3 Regular Brand DH DH PS 3010 D 58 G No No No No No
3 Regular Brand BA BA MS 2000 00 Sil Blk Gry 57 HC No No No No No
3 Regular Brand BA BA PS 2001A 01 Tor/Brn 55 HT No No No No No
3 Regular Brand BA BA PS 4000A 01 Tor/Brn 57 HT No No No No No
3 Regular Brand BA BA MS 4038A C01 Pall 60 HP No No No No No
3 Regular Brand BA BA MS 4002A 22 Cacao Brn 60 HC No No No No No
3 Regular Brand BA BA MS 4002A 32 Choco Brn 60 HC No No No No No
3 Regular Brand BA BA PS 4010A 00 Blk/Grn 61 HT No No No No No
Brand AD AD PS AOR000.001.009 53 HJ
3 Regular (new) No No No No No
Brand AD AD PS AOR001.027.149 52 HJ
3 Regular (new) No No No No No
Brand AD AD PS AOR002.144.009 52 HJ
3 Regular (new) No No No No No
Brand AD AD PS AOR003.TPS.009 50 HJ
3 Regular (new) No No No No No
Brand AD AD PS AOR004.148.001 52 HJ
3 Regular (new) No No No No No
Brand AD AD PS AOR001.009.063 52 HJ
3 Regular (new) No No No No No
Brand AD AD PS AOR003.053.021 50 HJ
3 Regular (new) No No No No No
4 Irregular Brand PD PD MS 8484 A 67 N No No No No No
4 Irregular Brand PD PD MST 8514 A 65 D No No No No No
4 Irregular Brand PD PD PS 8464 A 60 N No No No No No
4 Irregular Brand PD PD 8505 E 125 Sunglass No No No No No

277
4 Irregular Brand PD PD 8480 A 66 No No No No No
4 Irregular Brand PD PD PS 8908 D 63 HC No No No No No
4 Irregular Brand PD PD MS 8507 B 136 D No No No No No
4 Irregular Brand FE FE MS 612 Scaglietti 40568 HJ No No No No No
4 Irregular Brand FE FE MS California T 40319 HJ No No No No No
4 Irregular Brand FE FE PS 308 GTS 13173 09 HT No No No No No
4 Irregular Brand FE FE PS Testarossa 13247 12 HT No No No No No
4 Irregular Brand FE FE MS GTO 13249 31 HT No No No No No
4 Irregular Brand FE FE PS Team 2012 13240 09 HT No No No No No
4 Irregular Brand DH DH MS 1010 B 142 D No No No No No
4 Irregular Brand DH DH MST 1002 A 60 D No No No No No
4 Irregular Brand DH DH PS 1009 A 52 D No No No No No
4 Irregular Brand DH DH MST 5004 C 58 D No No No No No
4 Irregular Brand DH DH PS 7005 B 53 G No No No No No
4 Irregular Brand DH DH PS 7007 C 59 G No No No No No
4 Irregular Brand DH DH PS 3010 D 58 G No No No No No
4 Irregular Brand BA BA MS 2000 00 Sil Blk Gry 57 HC No No No No No
4 Irregular Brand BA BA PS 2001A 01 Tor/Brn 55 HT No No No No No
4 Irregular Brand BA BA PS 4000A 01 Tor/Brn 57 HT No No No No No
4 Irregular Brand BA BA MS 4038A C01 Pall 60 HP No No No No No
4 Irregular Brand BA BA MS 4002A 22 Cacao Brn 60 HC No No No No No
4 Irregular Brand BA BA MS 4002A 32 Choco Brn 60 HC No No No No No
4 Irregular Brand BA BA PS 4010A 00 Blk/Grn 61 HT No No No No No
Brand AD AD PS AOR000.001.009 53 HJ
4 Irregular (new) No No No No No

278
 Brand AD AD PS AOR001.027.149 52 HJ
4 Irregular (new) No No No No No
Brand AD AD PS AOR002.144.009 52 HJ
4 Irregular (new) No No No No No
Brand AD AD PS AOR003.TPS.009 50 HJ
4 Irregular (new) No No No No No
Brand AD AD PS AOR004.148.001 52 HJ
4 Irregular (new) No No No No No
Brand AD AD PS AOR001.009.063 52 HJ
4 Irregular (new) No No No No No
Brand AD AD PS AOR003.053.021 50 HJ
4 Irregular (new) No No No No No
5 Irregular Brand PD PD MS 8484 A 67 N No No No No No
5 Irregular Brand PD PD MST 8514 A 65 D No No No No No
5 Irregular Brand PD PD PS 8464 A 60 N No No No No No
5 Irregular Brand PD PD 8505 E 125 Sunglass No No No No No
5 Irregular Brand PD PD 8480 A 66 No No No No No
5 Irregular Brand PD PD PS 8908 D 63 HC No No No No No
5 Irregular Brand PD PD MS 8507 B 136 D No No No No No
5 Irregular Brand FE FE MS 612 Scaglietti 40568 HJ No No No No No
5 Irregular Brand FE FE MS California T 40319 HJ No No No No No
5 Irregular Brand FE FE PS 308 GTS 13173 09 HT No No No No No
5 Irregular Brand FE FE PS Testarossa 13247 12 HT No No No No No
5 Irregular Brand FE FE MS GTO 13249 31 HT No No No No No
5 Irregular Brand FE FE PS Team 2012 13240 09 HT No No No No No
5 Irregular Brand DH DH MS 1010 B 142 D No No No No No

279
5 Irregular Brand DH DH MST 1002 A 60 D No No No No No
5 Irregular Brand DH DH PS 1009 A 52 D No No No No No
5 Irregular Brand DH DH MST 5004 C 58 D No No No No No
5 Irregular Brand DH DH PS 7005 B 53 G No No No No No
5 Irregular Brand DH DH PS 7007 C 59 G No No No No No
5 Irregular Brand DH DH PS 3010 D 58 G No No No No No
5 Irregular Brand BA BA MS 2000 00 Sil Blk Gry 57 HC No No No No No
5 Irregular Brand BA BA PS 2001A 01 Tor/Brn 55 HT No No No No No
5 Irregular Brand BA BA PS 4000A 01 Tor/Brn 57 HT No No No No No
5 Irregular Brand BA BA MS 4038A C01 Pall 60 HP No No No No No
5 Irregular Brand BA BA MS 4002A 22 Cacao Brn 60 HC No No No No No
5 Irregular Brand BA BA MS 4002A 32 Choco Brn 60 HC No No No No No
5 Irregular Brand BA BA PS 4010A 00 Blk/Grn 61 HT No No No No No
Brand AD AD PS AOR000.001.009 53 HJ
5 Irregular (new) No No No No No
Brand AD AD PS AOR001.027.149 52 HJ
5 Irregular (new) No No No No No
Brand AD AD PS AOR002.144.009 52 HJ
5 Irregular (new) No No No No No
Brand AD AD PS AOR003.TPS.009 50 HJ
5 Irregular (new) No No No No No
Brand AD AD PS AOR004.148.001 52 HJ
5 Irregular (new) No No No No No
Brand AD AD PS AOR001.009.063 52 HJ
5 Irregular (new) No No No No No
Brand AD AD PS AOR003.053.021 50 HJ
5 Irregular (new) No No No No No

280
6 Irregular Brand PD PD MS 8484 A 67 N No No No No No
6 Irregular Brand PD PD MST 8514 A 65 D No No No No No
6 Irregular Brand PD PD PS 8464 A 60 N No No No No No
6 Irregular Brand PD PD 8505 E 125 Sunglass No No No No No
6 Irregular Brand PD PD 8480 A 66 No No No No No
6 Irregular Brand PD PD PS 8908 D 63 HC No No No No No
6 Irregular Brand PD PD MS 8507 B 136 D No No No No No
6 Irregular Brand FE FE MS 612 Scaglietti 40568 HJ No No No No No
6 Irregular Brand FE FE MS California T 40319 HJ No No No No No
6 Irregular Brand FE FE PS 308 GTS 13173 09 HT No No No No No
6 Irregular Brand FE FE PS Testarossa 13247 12 HT No No No No No
6 Irregular Brand FE FE MS GTO 13249 31 HT No No No No No
6 Irregular Brand FE FE PS Team 2012 13240 09 HT No No No No No
6 Irregular Brand DH DH MS 1010 B 142 D No No No No No
6 Irregular Brand DH DH MST 1002 A 60 D No No No No No
6 Irregular Brand DH DH PS 1009 A 52 D No No No No No
6 Irregular Brand DH DH MST 5004 C 58 D No No No No No
6 Irregular Brand DH DH PS 7005 B 53 G No No No No No
6 Irregular Brand DH DH PS 7007 C 59 G No No No No No
6 Irregular Brand DH DH PS 3010 D 58 G No No No No No
6 Irregular Brand BA BA MS 2000 00 Sil Blk Gry 57 HC No No No No No
6 Irregular Brand BA BA PS 2001A 01 Tor/Brn 55 HT No No No No No
6 Irregular Brand BA BA PS 4000A 01 Tor/Brn 57 HT No No No No No
6 Irregular Brand BA BA MS 4038A C01 Pall 60 HP No No No No No
6 Irregular Brand BA BA MS 4002A 22 Cacao Brn 60 HC No No No No No

281
6 Irregular Brand BA BA MS 4002A 32 Choco Brn 60 HC No No No No No
6 Irregular Brand BA BA PS 4010A 00 Blk/Grn 61 HT No No No No No
Brand AD AD PS AOR000.001.009 53 HJ
6 Irregular (new) No No No No No
Brand AD AD PS AOR001.027.149 52 HJ
6 Irregular (new) No No No No No
Brand AD AD PS AOR002.144.009 52 HJ
6 Irregular (new) No No No No No
Brand AD AD PS AOR003.TPS.009 50 HJ
6 Irregular (new) No No No No No
Brand AD AD PS AOR004.148.001 52 HJ
6 Irregular (new) No No No No No
Brand AD AD PS AOR001.009.063 52 HJ
6 Irregular (new) No No No No No
Brand AD AD PS AOR003.053.021 50 HJ
6 Irregular (new) No No No No No
7 Irregular Brand PD PD MS 8484 A 67 N No No No No No
7 Irregular Brand PD PD MST 8514 A 65 D No No No No No
7 Irregular Brand PD PD PS 8464 A 60 N No No No No No
7 Irregular Brand PD PD 8505 E 125 Sunglass No No No No No
7 Irregular Brand PD PD 8480 A 66 No No No No No
7 Irregular Brand PD PD PS 8908 D 63 HC No No No No No
7 Irregular Brand PD PD MS 8507 B 136 D No No No No No
7 Irregular Brand FE FE MS 612 Scaglietti 40568 HJ No No No No No
7 Irregular Brand FE FE MS California T 40319 HJ No No No No No
7 Irregular Brand FE FE PS 308 GTS 13173 09 HT No No No No No
7 Irregular Brand FE FE PS Testarossa 13247 12 HT No No No No No

282
7 Irregular Brand FE FE MS GTO 13249 31 HT No No No No No
7 Irregular Brand FE FE PS Team 2012 13240 09 HT No No No No No
7 Irregular Brand DH DH MS 1010 B 142 D No No No No No
7 Irregular Brand DH DH MST 1002 A 60 D No No No No No
7 Irregular Brand DH DH PS 1009 A 52 D No No No No No
7 Irregular Brand DH DH MST 5004 C 58 D No No No No No
7 Irregular Brand DH DH PS 7005 B 53 G No No No No No
7 Irregular Brand DH DH PS 7007 C 59 G No No No No No
7 Irregular Brand DH DH PS 3010 D 58 G No No No No No
7 Irregular Brand BA BA MS 2000 00 Sil Blk Gry 57 HC No No No No No
7 Irregular Brand BA BA PS 2001A 01 Tor/Brn 55 HT No No No No No
7 Irregular Brand BA BA PS 4000A 01 Tor/Brn 57 HT No No No No No
7 Irregular Brand BA BA MS 4038A C01 Pall 60 HP No No No No No
7 Irregular Brand BA BA MS 4002A 22 Cacao Brn 60 HC No No No No No
7 Irregular Brand BA BA MS 4002A 32 Choco Brn 60 HC No No No No No
7 Irregular Brand BA BA PS 4010A 00 Blk/Grn 61 HT No No No No No
Brand AD AD PS AOR000.001.009 53 HJ
7 Irregular (new) No No No No No
Brand AD AD PS AOR001.027.149 52 HJ
7 Irregular (new) No No No No No
Brand AD AD PS AOR002.144.009 52 HJ
7 Irregular (new) No No No No No
Brand AD AD PS AOR003.TPS.009 50 HJ
7 Irregular (new) No No No No Yes
Brand AD AD PS AOR004.148.001 52 HJ
7 Irregular (new) No No No No No

283
 Brand AD AD PS AOR001.009.063 52 HJ
7 Irregular (new) No No No No No
Brand AD AD PS AOR003.053.021 50 HJ
7 Irregular (new) No No No No No

284
Appendix L: Controlled Experiment Results (With Time Pressure)

Glasses
Brand style/ Item Color
Encoder Regular or Code Rim Style Code Code Size
# Irregular Brand Supplier Error Error Error Error Error
1 Regular Brand PD PD PS 8524 D 65 D No No No No No
1 Regular Brand PD PD MS 8632 C 61 HP No No No No No
1 Regular Brand PD PD PS 8519 E 156 D No No No No No
1 Regular Brand PD PD MT 8902 B 63 HT No No No No No
1 Regular Brand PD PD MS 8607 B 63 HP No No No No No
1 Regular Brand PD PD MS 8548 A 62 B No No No No No
1 Regular Brand PD PD MS 8561 A 64 HT No No No No No
1 Regular Brand FE FE MS GTO 13256 07 HT No No No No No
1 Regular Brand FE FE PS Testarossa 13244 09 HT No No No No No
1 Regular Brand FE FE PS 308 GTS 13175 03 HT No No No No No
1 Regular Brand FE FE MS F50 40517 HJ No No No No No
1 Regular Brand FE FE MS 275 GTS 13266 48 HT No No No No No
1 Regular Brand FE FE PS 456GT 40500 HJ No No No No No
1 Regular Brand DH DH MST 5014 D 60 G No No No No No
1 Regular Brand DH DH PS 3009 B 52 G No No No No No
1 Regular Brand DH DH MS 5016 A 62 B No No No No No
1 Regular Brand DH DH PS 3001 B 58 D No No No No No
1 Regular Brand DH DH PS 7007 A 59 G No No No No No
1 Regular Brand DH DH PS 7003 B 58 G No No No No No

285
1 Regular Brand DH DH PS 3009 A 52 G No No No No No
Brand BA BA PS 2024A 02 Brn-Grad Brn 57 HC
1 Regular No No No No No
1 Regular Brand BA BA PS 2035A 00 Blk Gry 55 HC No No No No No
1 Regular Brand BA BA PS 2035A 02 Brn-Brn 55 HC No No No No No
1 Regular Brand BA BA PS 2036A 01 Tor 54 HP No No No No No
1 Regular Brand BA BA PS 2036A 06 Grad Brn 54 HP No No No No No
1 Regular Brand BA BA PS 2037A 00 Gry Tor 52 HP No No No No No
1 Regular Brand BA BA PS 2038A 01 Tor 49 HP No No No No No
1 Regular Brand AD (new) AD PS AOR000.027.149 53 HJ No No No No No
1 Regular Brand AD (new) AD PS AOR002.148.001 52 HJ No No No No No
1 Regular Brand AD (new) AD PS AOR006.SNA.018 51 HJ No No No No No
1 Regular Brand AD (new) AD PS AOR007.FLC.009 53 HJ No No No No No
1 Regular Brand AD (new) AD PS AOR009.001.009 51 HJ No No No No No
1 Regular Brand AD (new) AD PS AOR011.070.009 54 HJ No No No No No
1 Regular Brand AD (new) AD PS AOR014.144.009 50 HJ No No No No No
2 Regular Brand PD PD PS 8524 D 65 D No No No No No
2 Regular Brand PD PD MS 8632 C 61 HP No No No No No
2 Regular Brand PD PD PS 8519 E 156 D No No No No No
2 Regular Brand PD PD MT 8902 B 63 HT No No No No No
2 Regular Brand PD PD MS 8607 B 63 HP No No No No No
2 Regular Brand PD PD MS 8548 A 62 B No No No No No
2 Regular Brand PD PD MS 8561 A 64 HT No No No No No
2 Regular Brand FE FE MS GTO 13256 07 HT No No No No No
2 Regular Brand FE FE PS Testarossa 13244 09 HT No No No No No

286
2 Regular Brand FE FE PS 308 GTS 13175 03 HT No No No No No
2 Regular Brand FE FE MS F50 40517 HJ No No No No No
2 Regular Brand FE FE MS 275 GTS 13266 48 HT No No No No No
2 Regular Brand FE FE PS 456GT 40500 HJ No No No No No
2 Regular Brand DH DH MST 5014 D 60 G No No No No No
2 Regular Brand DH DH PS 3009 B 52 G No No No No No
2 Regular Brand DH DH MS 5016 A 62 B No No No No No
2 Regular Brand DH DH PS 3001 B 58 D No No No No No
2 Regular Brand DH DH PS 7007 A 59 G No No No No No
2 Regular Brand DH DH PS 7003 B 58 G No No No No No
2 Regular Brand DH DH PS 3009 A 52 G No No No No No
Brand BA BA PS 2024A 02 Brn-Grad Brn 57 HC
2 Regular No No No No No
2 Regular Brand BA BA PS 2035A 00 Blk Gry 55 HC No No No No No
2 Regular Brand BA BA PS 2035A 02 Brn-Brn 55 HC No No No No No
2 Regular Brand BA BA PS 2036A 01 Tor 54 HP No No No No No
2 Regular Brand BA BA PS 2036A 06 Grad Brn 54 HP No No No No No
2 Regular Brand BA BA PS 2037A 00 Gry Tor 52 HP No No No No No
2 Regular Brand BA BA PS 2038A 01 Tor 49 HP No No No No No
2 Regular Brand AD (new) AD PS AOR000.027.149 53 HJ No No No No No
2 Regular Brand AD (new) AD PS AOR002.148.001 52 HJ No No No No No
2 Regular Brand AD (new) AD PS AOR006.SNA.018 51 HJ No No No No No
2 Regular Brand AD (new) AD PS AOR007.FLC.009 53 HJ No No No No Yes
2 Regular Brand AD (new) AD PS AOR009.001.009 51 HJ No No No No No
2 Regular Brand AD (new) AD PS AOR011.070.009 54 HJ No No No No No

287
2 Regular Brand AD (new) AD PS AOR014.144.009 50 HJ No No No No No
3 Regular Brand PD PD PS 8524 D 65 D No No No No No
3 Regular Brand PD PD MS 8632 C 61 HP No No No No No
3 Regular Brand PD PD PS 8519 E 156 D No No No No No
3 Regular Brand PD PD MT 8902 B 63 HT No No No No No
3 Regular Brand PD PD MS 8607 B 63 HP No No No No No
3 Regular Brand PD PD MS 8548 A 62 B No No No No No
3 Regular Brand PD PD MS 8561 A 64 HT No No No No No
3 Regular Brand FE FE MS GTO 13256 07 HT No No No No No
3 Regular Brand FE FE PS Testarossa 13244 09 HT No No No No No
3 Regular Brand FE FE PS 308 GTS 13175 03 HT No No No No No
3 Regular Brand FE FE MS F50 40517 HJ No No No No No
3 Regular Brand FE FE MS 275 GTS 13266 48 HT No No No No No
3 Regular Brand FE FE PS 456GT 40500 HJ No No No No No
3 Regular Brand DH DH MST 5014 D 60 G No No No No No
3 Regular Brand DH DH PS 3009 B 52 G No No No No No
3 Regular Brand DH DH MS 5016 A 62 B No No No No No
3 Regular Brand DH DH PS 3001 B 58 D No No No No No
3 Regular Brand DH DH PS 7007 A 59 G No No No No No
3 Regular Brand DH DH PS 7003 B 58 G No No No No No
3 Regular Brand DH DH PS 3009 A 52 G No No No No No
Brand BA BA PS 2024A 02 Brn-Grad Brn 57 HC
3 Regular No No No No No
3 Regular Brand BA BA PS 2035A 00 Blk Gry 55 HC No No No No No
3 Regular Brand BA BA PS 2035A 02 Brn-Brn 55 HC No No No No No

288
3 Regular Brand BA BA PS 2036A 01 Tor 54 HP No No No No No
3 Regular Brand BA BA PS 2036A 06 Grad Brn 54 HP No No No No No
3 Regular Brand BA BA PS 2037A 00 Gry Tor 52 HP No No No No No
3 Regular Brand BA BA PS 2038A 01 Tor 49 HP No No No No No
3 Regular Brand AD (new) AD PS AOR000.027.149 53 HJ No No No No No
3 Regular Brand AD (new) AD PS AOR002.148.001 52 HJ No No No No No
3 Regular Brand AD (new) AD PS AOR006.SNA.018 51 HJ No No No No No
3 Regular Brand AD (new) AD PS AOR007.FLC.009 53 HJ No No No No No
3 Regular Brand AD (new) AD PS AOR009.001.009 51 HJ No No No No No
3 Regular Brand AD (new) AD PS AOR011.070.009 54 HJ No No No No No
3 Regular Brand AD (new) AD PS AOR014.144.009 50 HJ No No No No No
4 Irregular Brand PD PD PS 8524 D 65 D No No No No No
4 Irregular Brand PD PD MS 8632 C 61 HP No No No No No
4 Irregular Brand PD PD PS 8519 E 156 D No No No No No
4 Irregular Brand PD PD MT 8902 B 63 HT No No No No No
4 Irregular Brand PD PD MS 8607 B 63 HP No No No No No
4 Irregular Brand PD PD MS 8548 A 62 B No No No No No
4 Irregular Brand PD PD MS 8561 A 64 HT No No No No No
4 Irregular Brand FE FE MS GTO 13256 07 HT No No No No No
4 Irregular Brand FE FE PS Testarossa 13244 09 HT No No No No No
4 Irregular Brand FE FE PS 308 GTS 13175 03 HT No No No No No
4 Irregular Brand FE FE MS F50 40517 HJ No No No No No
4 Irregular Brand FE FE MS 275 GTS 13266 48 HT No No No No No
4 Irregular Brand FE FE PS 456GT 40500 HJ No No No No No
4 Irregular Brand DH DH MST 5014 D 60 G No No No No No

289
4 Irregular Brand DH DH PS 3009 B 52 G No No No No No
4 Irregular Brand DH DH MS 5016 A 62 B No No No No No
4 Irregular Brand DH DH PS 3001 B 58 D No No No No No
4 Irregular Brand DH DH PS 7007 A 59 G No No No No No
4 Irregular Brand DH DH PS 7003 B 58 G No No No No No
4 Irregular Brand DH DH PS 3009 A 52 G No No No No No
Brand BA BA PS 2024A 02 Brn-Grad Brn 57 HC
4 Irregular No No No No No
4 Irregular Brand BA BA PS 2035A 00 Blk Gry 55 HC No No No No No
4 Irregular Brand BA BA PS 2035A 02 Brn-Brn 55 HC No No No No No
4 Irregular Brand BA BA PS 2036A 01 Tor 54 HP No No No No No
4 Irregular Brand BA BA PS 2036A 06 Grad Brn 54 HP No No No No No
4 Irregular Brand BA BA PS 2037A 00 Gry Tor 52 HP No No No No No
4 Irregular Brand BA BA PS 2038A 01 Tor 49 HP No No No No No
4 Irregular Brand AD (new) AD PS AOR000.027.149 53 HJ No No No No No
4 Irregular Brand AD (new) AD PS AOR002.148.001 52 HJ No No No No No
4 Irregular Brand AD (new) AD PS AOR006.SNA.018 51 HJ No No No No No
4 Irregular Brand AD (new) AD PS AOR007.FLC.009 53 HJ No No No No No
4 Irregular Brand AD (new) AD PS AOR009.001.009 51 HJ No No No No Yes
4 Irregular Brand AD (new) AD PS AOR011.070.009 54 HJ No No No No No
4 Irregular Brand AD (new) AD PS AOR014.144.009 50 HJ No No No No No
5 Irregular Brand PD PD PS 8524 D 65 D No No No No No
5 Irregular Brand PD PD MS 8632 C 61 HP No No No No No
5 Irregular Brand PD PD PS 8519 E 156 D No No No No No
5 Irregular Brand PD PD MT 8902 B 63 HT No No No No No

290
5 Irregular Brand PD PD MS 8607 B 63 HP No No No No No
5 Irregular Brand PD PD MS 8548 A 62 B No No No No No
5 Irregular Brand PD PD MS 8561 A 64 HT No No No No No
5 Irregular Brand FE FE MS GTO 13256 07 HT No No No No No
5 Irregular Brand FE FE PS Testarossa 13244 09 HT No No No No No
5 Irregular Brand FE FE PS 308 GTS 13175 03 HT No No No No No
5 Irregular Brand FE FE MS F50 40517 HJ No No No No No
5 Irregular Brand FE FE MS 275 GTS 13266 48 HT No No No No No
5 Irregular Brand FE FE PS 456GT 40500 HJ No No No No No
5 Irregular Brand DH DH MST 5014 D 60 G No No No No No
5 Irregular Brand DH DH PS 3009 B 52 G No No No No No
5 Irregular Brand DH DH MS 5016 A 62 B No No No No No
5 Irregular Brand DH DH PS 3001 B 58 D No No No No No
5 Irregular Brand DH DH PS 7007 A 59 G No No No No No
5 Irregular Brand DH DH PS 7003 B 58 G No No No No No
5 Irregular Brand DH DH PS 3009 A 52 G No No No No No
Brand BA BA PS 2024A 02 Brn-Grad Brn 57 HC
5 Irregular No No No No No
5 Irregular Brand BA BA PS 2035A 00 Blk Gry 55 HC No No No No No
5 Irregular Brand BA BA PS 2035A 02 Brn-Brn 55 HC No No No No No
5 Irregular Brand BA BA PS 2036A 01 Tor 54 HP No No No No No
5 Irregular Brand BA BA PS 2036A 06 Grad Brn 54 HP No No No No No
5 Irregular Brand BA BA PS 2037A 00 Gry Tor 52 HP No No No No No
5 Irregular Brand BA BA PS 2038A 01 Tor 49 HP No No No No No
5 Irregular Brand AD (new) AD PS AOR000.027.149 53 HJ No No No No No

291
5 Irregular Brand AD (new) AD PS AOR002.148.001 52 HJ No No No No No
5 Irregular Brand AD (new) AD PS AOR006.SNA.018 51 HJ No No No No No
5 Irregular Brand AD (new) AD PS AOR007.FLC.009 53 HJ No No No No No
5 Irregular Brand AD (new) AD PS AOR009.001.009 51 HJ No No No No No
5 Irregular Brand AD (new) AD PS AOR011.070.009 54 HJ No No No No No
5 Irregular Brand AD (new) AD PS AOR014.144.009 50 HJ No No No No No
6 Irregular Brand PD PD PS 8524 D 65 D No No No No No
6 Irregular Brand PD PD MS 8632 C 61 HP No No No No No
6 Irregular Brand PD PD PS 8519 E 156 D No No No No No
6 Irregular Brand PD PD MT 8902 B 63 HT No No No No No
6 Irregular Brand PD PD MS 8607 B 63 HP No No No No No
6 Irregular Brand PD PD MS 8548 A 62 B No No No No No
6 Irregular Brand PD PD MS 8561 A 64 HT No No No No No
6 Irregular Brand FE FE MS GTO 13256 07 HT No No No No No
6 Irregular Brand FE FE PS Testarossa 13244 09 HT No No No No No
6 Irregular Brand FE FE PS 308 GTS 13175 03 HT No No No No No
6 Irregular Brand FE FE MS F50 40517 HJ No No No No No
6 Irregular Brand FE FE MS 275 GTS 13266 48 HT No No No No No
6 Irregular Brand FE FE PS 456GT 40500 HJ No No No No No
6 Irregular Brand DH DH MST 5014 D 60 G No No No No No
6 Irregular Brand DH DH PS 3009 B 52 G No No No No No
6 Irregular Brand DH DH MS 5016 A 62 B No No No No No
6 Irregular Brand DH DH PS 3001 B 58 D No No No No No
6 Irregular Brand DH DH PS 7007 A 59 G No No No No No
6 Irregular Brand DH DH PS 7003 B 58 G No No No No No

292
6 Irregular Brand DH DH PS 3009 A 52 G No No No No No
Brand BA BA PS 2024A 02 Brn-Grad Brn 57 HC
6 Irregular No No No No No
6 Irregular Brand BA BA PS 2035A 00 Blk Gry 55 HC No Yes No No No
6 Irregular Brand BA BA PS 2035A 02 Brn-Brn 55 HC No No No No No
6 Irregular Brand BA BA PS 2036A 01 Tor 54 HP No No No No No
6 Irregular Brand BA BA PS 2036A 06 Grad Brn 54 HP No No No No No
6 Irregular Brand BA BA PS 2037A 00 Gry Tor 52 HP No No No No No
6 Irregular Brand BA BA PS 2038A 01 Tor 49 HP No No No No No
6 Irregular Brand AD (new) AD PS AOR000.027.149 53 HJ No No No No No
6 Irregular Brand AD (new) AD PS AOR002.148.001 52 HJ No No No No No
6 Irregular Brand AD (new) AD PS AOR006.SNA.018 51 HJ No No No No No
6 Irregular Brand AD (new) AD PS AOR007.FLC.009 53 HJ No No No No No
6 Irregular Brand AD (new) AD PS AOR009.001.009 51 HJ No No No No No
6 Irregular Brand AD (new) AD PS AOR011.070.009 54 HJ No No No No No
6 Irregular Brand AD (new) AD PS AOR014.144.009 50 HJ No No No No No
7 Irregular Brand PD PD PS 8524 D 65 D No No No No No
7 Irregular Brand PD PD MS 8632 C 61 HP No No No No No
7 Irregular Brand PD PD PS 8519 E 156 D No No No No No
7 Irregular Brand PD PD MT 8902 B 63 HT No No No No No
7 Irregular Brand PD PD MS 8607 B 63 HP No No No No No
7 Irregular Brand PD PD MS 8548 A 62 B No No No No No
7 Irregular Brand PD PD MS 8561 A 64 HT No No No No No
7 Irregular Brand FE FE MS GTO 13256 07 HT No No No No No
7 Irregular Brand FE FE PS Testarossa 13244 09 HT No No No No No

293
7 Irregular Brand FE FE PS 308 GTS 13175 03 HT No No No No No
7 Irregular Brand FE FE MS F50 40517 HJ No No No No No
7 Irregular Brand FE FE MS 275 GTS 13266 48 HT No No No No No
7 Irregular Brand FE FE PS 456GT 40500 HJ No No No No No
7 Irregular Brand DH DH MST 5014 D 60 G No No No No No
7 Irregular Brand DH DH PS 3009 B 52 G No No No No No
7 Irregular Brand DH DH MS 5016 A 62 B No No No No No
7 Irregular Brand DH DH PS 3001 B 58 D No No No No No
7 Irregular Brand DH DH PS 7007 A 59 G No No No No No
7 Irregular Brand DH DH PS 7003 B 58 G No No No No No
7 Irregular Brand DH DH PS 3009 A 52 G No No No No No
Brand BA BA PS 2024A 02 Brn-Grad Brn 57 HC
7 Irregular No No No No No
7 Irregular Brand BA BA PS 2035A 00 Blk Gry 55 HC No No No No No
7 Irregular Brand BA BA PS 2035A 02 Brn-Brn 55 HC No No No No No
7 Irregular Brand BA BA PS 2036A 01 Tor 54 HP No No No No No
7 Irregular Brand BA BA PS 2036A 06 Grad Brn 54 HP No No No No No
7 Irregular Brand BA BA PS 2037A 00 Gry Tor 52 HP No No No No No
7 Irregular Brand BA BA PS 2038A 01 Tor 49 HP No No No No No
7 Irregular Brand AD (new) AD PS AOR000.027.149 53 HJ No No No No No
7 Irregular Brand AD (new) AD PS AOR002.148.001 52 HJ No No No Yes No
7 Irregular Brand AD (new) AD PS AOR006.SNA.018 51 HJ No No No No No
7 Irregular Brand AD (new) AD PS AOR007.FLC.009 53 HJ No No No No Yes
7 Irregular Brand AD (new) AD PS AOR009.001.009 51 HJ No No No No Yes
7 Irregular Brand AD (new) AD PS AOR011.070.009 54 HJ No No No No No

294
7 Irregular Brand AD (new) AD PS AOR014.144.009 50 HJ No No No No No

295