John Wells is vice president of manufacturing for White Goods, Inc., a maker of household appliances. John has been studying the performance of one of his order fulfillment departments for the small parts used in repairing the company ’s appliances. He has benchmarked the performance against L.L. Bean and found his department sadly lacking in terms of performance. The key performance metrics and his company’s comparable performance are listed in the table below.

Based on this information, John decides to monitor performance focusing on continuous improvement on a rolling average basis. He chooses two metrics, labor time to fill order and cost to fill order, to establish his first round of goals. Below is his 12-month performance record. John is going to use a three-month rolling average as his standard. His goal for the first year is to shave 20% off of the time required to fill the orders, and 25% off of the cost to fill the orders.

REQUIRED:

a. Do a trend analysis chart for the two measures.

b. Calculate the rolling average performance level for each of the 12 months of this year. Use the first three observations as your starting benchmark, and then update your average each month by adding one month of observations on and dropping the oldest month off . You will have 10 observations.

c. Does it appear that John’s fulfillment operations are improving? Specifically, did the operation meet John’s goals? Why or why not?

Transcribed Image Text:

Performance Measure L.L.Bean White Goods Time to fill order 90 minutes 2 days Orders filled correctly 99% 85% Number of items missing from order None 3 Labor time to fill rder Dminutes 30 minutes Cost to fill order $5.00 $20.00