WALKER AUTO SALES AND SERVICE Walker Auto Sales and Service (WASS) is a full service dealership for a major domestic automobile brand. Essentially, WASS provides three main services: new car sales, used car sales, and repair and maintenance service. Because of the competitive nature of the market, the firm's owner, Darren Walker, wants to take a more systematic approach to improving service and providing a high level of customer satisfaction. Through surveys, focus groups, and analysis of complaint data and information, he identified some Hagler turned to Dave, who felt a surge of adrenaline. "Dave, South Central sales were the worst of all! Sales were down 19.7 percent in the fourth quarter and down 22.3 percent from the previous year. How can you explain this? Do you value your job? I want to see a dramatic improvement in this quarter's results or else!" Dave felt numb. It was a tough region, with a lot of competition. Sure, accounts were lost over the years, but those lost were always replaced with new ones. How could he be doing so badly? How can Hagler improve his approach by applying principles of statistical thinking? Use any analyses of the data that you feel are appropriate, such as construction of Excel charts or computing summary statistics to fully explain your thinking and help him. philosophy? 2. How'might'the'analysis'of these'data'help'the'manager'to'understand the'variation'in'the'system?' (Plot'the'data'to'obtain'some'insight.).How'can'the'data'help'the'manager'to'improve'the' performance'of'the'system? Based'on'this'descriptive'tour'of'NCG,'can'you'identify'how'the'operations'and 'quality'practices' reflectDeming's.14Points? important requirements for these services. Customers expect a favorable impression when they arrive at the dealership-a wide range of vehicles and options to evaluate, available salespeople, to be greeted promptly, and to feel comfortable and not pressured. They also expect salespersons to be courteous, knowledgeable about the cars, respect their time, and honor verbal promises. For repair and maintenance service, customers want to have the work explained appropriately, to be fully informed of any additional necessary work, and to have all work reviewed upon completion. They want good time estimates and communications with the service department. Suppliers play an important role in the business and the entire value chain. The dealership needs quality parts, product availability when needed, timely delivery, and fair prices. WASS also receives corporate support for its employee benefits and certain training programs, information technology planning and intranet/Internet development, marketing and advertising, and strategic planning direction. WASS is facing increasing competition for skilled employee talent, changing customer demographics that are leading to growing demand, and more competition as a result of new foreign dealerships that are locating in its market area. Darren recognizes the need to "become the dealership of choice" in its market. Drawing upon the principles of quality management and the unique nature of services addressed in Chapter 1, describe some of the issues that Darren must consider in achieving his vision. Develop a list of action plans that he might consider. Ron Hagler, the vice president of sales for Selit Corp., had just received a report on the past five years of quarterly sales data for the regions under his authority (see sales data shown in the Excel worksheet C02-CaseData.xlsx on the Student Companion Site). Not happy with the results, he got on the phone to his secretary. "Marsha, tell the regional managers I need to speak with them this afternoon. Everyone must attend." Marsha had been Hagler's secretary for almost a decade. She knew by the tone in his voice that he meant business, so she contacted the regional managers about the impromptu meeting at 2 P.M. At 1:55 P.M., the regional managers filed into the room. The only time they were called into a meeting together was when Hagler was unhappy. Hagler wasted no time. "I just received the quarterly sales report. Northeast sales were fantastic. Steve, you not only improved 17.6 percent in the fourth quarter, but you also increased sales a whopping 20.6 percent over the previous year. I don't know how you do it!" Steve smiled. His philosophy to end the year with a bang by getting customers to stockpile units had paid off again. Hagler had failed to notice that Steve's first quarter sales were always sluggish. Hagler continued: "Terry, Southwest sales were also superb. You showed an 11.7 percent increase in the fourth quarter and an 11.8 percent increase over the previous year." Terry also smiled. She wasn't sure how she did so well, but she sure wasn't going to change anything. "Jan, Northwest sales were up 17.2 percent in the fourth quarter, but down 8.2 percent from the previous year," said Hagler. "You need to find out what you did previously to make your sales go through the roof. Even so, your performance in the fourth quarter was good." Jan tried to hide his puzzlement. Although he had received a big order in November, it was the first big order he had received in a long time. Overall, sales for the Northwest were declining. Hagler was now ready to deal with the "problem" regions. "Leslie, North Central sales were down 5.5 percent in the fourth quarter, but up 4.7 percent from the previous year. I don't understand how your sales vary so much. Do you need more incentive?" Leslie looked down. She had been working very hard the past five years and had acquired numerous new accounts. In fact, she received a bonus for acquiring the most new business in 2009. "Kim, Mid-Atlantic sales were down 3.2 percent in the fourth quarter and down 2.6 percent from the previous year. I'm very disappointed in your performance. You were once my best sales representative. I had high expectations for you. Now, I can only hope that your first quarter results show some sign of life." Kim felt her face get red. She knew she had sold more units in 2011 than in 2010. "What does Hagler know anyway," she thought to herself. "He's just an empty suit." grades of tonewoods. The wood is treated in an evaporative dehumidifying kiln that slowly and carefully removes bound cellular moisture from the wood. The target moisture level is 3 percent, but when exposed to the temperature/humidity conditions of the shop floor, the moisture content stabilizes at 6 percent. The shop floor is kept at a constant 47 percent humidity, which is optimum for maintaining the equilibrium of moisture conditions. 2. Rough Cutting the Wood: Once dried, the wood is worked down to rough usable forms using traditional woodworking tools. However, NCG uses a CNC machine for creating the necks. 3. Bending the Sides: To create the desired shapes, the guitar sides are first dipped into water for 10min utes to condition the wood and then placed under gradual hand pressure on a hot bending template. At that point, the tension in the wood has been relaxed, and the wood eventually takes the shape of the template. This process is best performed by human hands because sides that are shaped by machines have a tendency to spring back when they are being forced into molds. 4. Cutting the Top and Back: The top and back of the guitars then are cut to shape, and braces are applied to each surface. The thicknesses of the top and braces have the most influence on the final sound of the guitar. As the luthier shaves off ribbons of wood from the top and braces, he will tap the top to hear the tone that results from each series of shavings until the tone is perfect. Since the true sound of the instruments will not be fully realized until they are assembled, the luthiers write down what they did while building the top. After final assembly, if a guitar produces a sound so special it knocks the player's socks off, the luthier who built the top will immediately be notified and asked to check his notes to see how this was accomplished so the sound can be duplicated in the future. 5. Cutting the Neck: About 60 percent of the NCG guitar necks are cut on the CNC machine. It is the only major part that is not hand-made. It is critical that the dimensions of the neck be consistent, and the CNC machine does that better than human hands. The 40 percent of necks that are hand-made are done that way because of a customer's specifications. Ebony fret boards, which are inlaid with mother-of-pearl, are then glued to the necks. 6. Applying the Finish: The guitar body is finished with 12 protective layers of a specially formulated lacquer composed primarily of nitrocellulose and plasticizers to preserve the wood surfaces. The lacquer is thin enough that the sound is not dampened. 7. Completing Final Assembly and Setup: The neck is fitted to the body using a dovetail joint and glued in place. Then the bridge is glued to the body. In the next step, called the setup, the saddle and nut, which suspend the strings over the instrument and are made from bovine bones, are installed. Finally, the strings are placed on the guitar, and it is played for the first time. A technician then adjusts the neck or string height to optimize the feel and playability of the instrument. NCG has a web page where guitar owners can have questions about their guitars answered. At NCG, workers are encouraged to further enhance their skills either by taking external courses or by a practice that allows them to build two instruments a year for personal use. These opportunities allow the craftsmen to explore new techniques in guitar building and become familiar with the entire guitar building process. NCG workers are even encouraged to go out on their own to open a luthier business someday. Based on this descriptive tour of NCG, can you identify how the operations and quality practices reflect Deming's 14 Points? NASHVILLE CUSTOM GUITARS 48 Nashville Custom Guitars (NCG) is a small-scale manufacturing operation, producing fewer than 800 instruments a year. The company does not have a formal quality department nor has it consciously tried to apply the principles of TQM. Nevertheless, a tour of its facilities and operations suggest that many of the principles of TQM and Deming's 14 Points are evident. Although modern computer numerical controlled (CNC) equipment is used to manufacture minor parts of the guitar, the secret of NCG's success lies in the small staff of 14 craftsmen, known as luthiers, who apply care and attention to detail while hand-crafting the major components of each instrument. The shop floor is divided into six workstations at which the guitars are progressively assembled as they move from station to station. Experienced luthiers, who are empowered to make their own quality decisions, staff each station. The guitar does not move to the next station until the luthier and another more senior luthier are satisfied with the quality of the work. The manufacturing department inspects what it produces. The company recruits only those who desire to work in a team environment and have a passion for guitar making. There are seven major steps in the process of making a guitar: 1. Selecting and Drying the Wood: The guitar-making process starts with the selection of the highest