GM504 Unit 10 Delivery Accuracy Project Report Example

From 5.8 to 3.7 Percent: A Unit 10 Excellence Project Report on Scan-Confirmed Picking

[Student Name]

Purdue University Global

GM504: Organizational Excellence and Change

Unit 10 Excellence Project Report

[Instructor Name]

[Date]

Ridgeway Building Supply, its staff and every figure are composite and illustrative; the frameworks and sources cited are real.

Executive Summary

Problem. In the twelve-week baseline, 5.8 percent of delivery orders needed a redelivery or credit memo, costing about $19,700 a month. Wrong items were the largest category.

Cause. Stock moved in the yard was never recorded, so 15.5 percent of audited bins held something other than the system's record, and pickers followed tickets to the wrong product.

Change. Scan-confirmed stock moves, scan-confirmed picks and a cleanup of fastener units of measure, piloted in the main yard and then rolled out to all four branches.

Result. The correction rate fell to 3.7 percent over eight weeks after rollout, against a goal of 3.5 percent. Wrong-item corrections fell from 52 to 18 a month.

Cost and return. One-time cost of $23,556 and recurring cost of $8,848 a year. Validated savings of about $7,100 a month. Payback in under four months.

The Charter as Approved

The project charter approved by the owner committed the team to a 3.5 percent correction rate, measured over the half year following rollout. This report measures against that goal as written. The project did not reach it, and the report does not revise the goal after the fact.

Define: The Process

The process map in Unit 3 followed delivery orders from entry to signature and found seventeen steps in practice against nine in the written procedure. Three of the eight unwritten steps involved searching for or substituting products when bin records were wrong, which pointed the project toward location accuracy.

Measure: The Baseline

The measurement plan in Unit 5 defined a correction precisely, tested coding agreement among billing clerks and revised the definitions until the clerks agreed on 37 of forty test memos. The baseline recorded 418 corrections across about 7,200 orders in twelve weeks, a stable process at 5.8 percent.

Analyze: The Cause

The Pareto chart in Unit 4 showed wrong items as the largest category, 52 of 139 corrections in a baseline month. A fishbone diagram and five-whys chain traced them to bin records that could not be updated from the yard and that nobody maintained. An audit of 200 bins confirmed the cause, and tracing each wrong item back to its bin showed that nearly three quarters had been pulled from a mislabeled location.

Improve: The Change

The improvement proposal in Unit 7 rejected a second checker and retraining in favor of system-enforced scanning, because only scanning removed the cause. The main-yard pilot met its success criteria: wrong-item corrections in the pilot yard fell by more than half, and bin accuracy rose above 95 percent. Rollout to the branches followed over eight weeks.

Results

The Baldrige framework asks results to be reported as levels, trends and comparisons (Baldrige Performance Excellence Program, 2023), and the results here follow that pattern.

Levels. In the eight weeks after full rollout, the correction rate averaged 3.7 percent. Monthly corrections fell from 139 to about 89. Wrong-item corrections fell from 52 to 18, short quantities from 41 to 29, damage from 23 to 22 and missing add-ons from 15 to 12, while other corrections held at 8.

Trends. Weekly rates fell steadily during rollout and have held between 3.3 and 4.1 percent since. On the control chart, the post-rollout weeks form a new stable level, with no points outside the recalculated limits.

Comparisons. Against the baseline, the overall rate fell by about 36 percent. Against the prediction in Unit 7, which expected about 44 fewer corrections a month, the actual reduction of about 50 was better than predicted, mainly because wrong items fell slightly more than expected and missing add-ons fell somewhat for reasons the project cannot attribute with confidence. No external benchmark for delivery accuracy among regional building-supply distributors was available.

The project removed about fifty corrections a month by fixing a record rather than adding a checker, and it missed its goal by two tenths of a point.

Financial Validation

The controller reviewed the savings using the $142 cost per correction established in Unit 8 and confirmed the figure against actual redelivery costs and credit memos for the eight weeks. Fifty fewer corrections a month at $142 each is $7,100 a month, or $85,200 a year. After recurring costs of $737 a month, net savings are about $6,363 a month. At that pace the installation cost was recovered in under four months.

Why the Goal Was Missed

The goal of 3.5 percent assumed reductions in categories the project did not address. Damage in transit and missing add-ons together still account for about 34 corrections a month, and their causes, load securing and the handling of phoned-in additions, lie outside picking and stock moves. The charter's goal was reasonable for the problem as a whole but ambitious for a project focused on one cause. That lesson matters for future charters: goals should be tied to the categories a project actually targets. Deming cautioned that numerical goals set without a method for reaching them invite frustration or distortion (Deming, 1986); this project's method addressed two categories, and its goal should have been set from those two.

Control: The Plan Going Forward

The control plan in Unit 9 transfers ownership of the correction rate to the yard operations manager and of bin accuracy to the inventory control lead, with weekly reviews, thresholds and defined reactions. Scan compliance is monitored daily through the override log. A review of the plan is scheduled one year after handover.

Recommendations

First, keep the control plan in force and attend the Monday reviews. Second, charter a second project on damage in transit, now the largest remaining category after short quantities. Third, extend directed moves to returned goods, which are currently put away without scanning. Six Sigma research suggests that clear, specific goals tied to measurable defects sustain improvement effort better than broad aspirations (Linderman et al., 2003), so each new charter should name the categories it targets.

Acceptance

The report closes with two acceptance lines, one for the owner and one for the yard operations manager as process owner, confirming that they accept the results and the control plan. Both are left unsigned until the review meeting.

Appendices

Appendix A contains the delivery-order process map. Appendix B holds the measurement plan and attribute agreement results. Appendix C contains the Pareto chart, fishbone diagram and location audit data. Appendix D holds weekly correction rates for the baseline, pilot and follow-up periods. Appendix E contains the cost analysis and the controller's validation memo. Appendix F holds the control plan.

References

Baldrige Performance Excellence Program. (2023). 2023-2024 Baldrige excellence framework: Business/nonprofit. National Institute of Standards and Technology.

Deming, W. E. (1986). Out of the crisis. MIT Press.

Linderman, K., Schroeder, R. G., Zaheer, S., & Choo, A. S. (2003). Six Sigma: A goal-theoretic perspective. Journal of Operations Management, 21(2), 193-203. https://doi.org/10.1016/S0272-6963(02)00087-6