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PDCA and TQM

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Please refer to the Case 1 description of the hypothetical grocery delivery company.
Let's suppose the company has Taken Off, and is now a Big Deal in Silicon Valley. Thousands of otherworldly, overpaid people, many of whom could either find the time to go shopping themselves, or delegate the task to their PAs, have come to rely upon MyShoppingCart.com for groceries - and not just at 3:00 AM on Sunday morning.
The company's success has been due to its clean, beautifully intuitive shopping app, which works flawlessly on every device, and also to its awesomely fast delivery service. In one instance, which has become the stuff of local legend, a millionaire's trophy wife was horrified to discover that she was completely out of cocktail onions, and a party she was hosting was beginning in a half hour. She placed an order on her cellphone, and a motorcycle courier from MyShoppingCart had the onions in her hand in 17 minutes flat. (That $1.75 jar of onions did, of course, cost her $50, charged to her American Express card, but she didn't notice.)
But now the company has encountered a problem -- the warehouse. There are bottlenecks: it's taking too long for items to get from the receiving side of the shipping dock to the shelves. It's taking too long to pick an order from the shelves and get it out the door, in either a car trunk or motorcycle saddlebags. There's no minimum acceptable time for either activity; the emphasis is always on making things faster.
Obviously, it's impossible to know the particulars of what's going on. But how would you find out? Once you know, what sort of program would you put into place, to make things better? In particular:
1. How would you go about benchmarking the warehouse's performance?
2. How would you collect data concerning the details of warehouse performance?
3. How would you apply the PDCA process to improving performance?
References:
ASQ (2014). Plan-do-check-act (PDCA) cycle. Retrieved on 30 Nov 2015* from http://asq.org/learn-about-quality/project-planning-tools/overview/pdca-cycle.html
Moen, R. & Norman, C. (n.d.) Evolution of PDCA cycle. Retrieved on 30 Nov 2015* from http://pkpinc.com/files/NA01MoenNormanFullpaper.pdf
Murray, M. (2015c). Total quality management (TQM). Retrieved on 30 Nov 2015* from http://logistics.about.com/od/qualityinthesupplychain/a/TQM.htm
Murray, M. (2015d). Benchmarking in the supply chain. Retrieved on 30 Nov 2015* from http://logistics.about.com/od/qualityinthesupplychain/a/benchmarking.htm
Murray, M. (2015e). Continuous Improvement Tools. Retrieved on 30 Nov 2015* from http://logistics.about.com/od/qualityinthesupplychain/a/Continuous-Improvement-Tools.htm

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The expert examines PDCA and TQM. The question is answered in 935 words.

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1. How would you go about benchmarking the warehouse's performance?

Benchmarking is a way of assessing if goals have been met, in order for the company to identify problems, such as those related to inventory efficiency, accuracies in inventory and shipping, amount of items stored per cubic foot, and delivery times. These deficiencies are areas that the company can work on, to improve its warehousing processes.

Various benchmarking tests can be conducted to determine the performance of the warehouse. If MyShoppingCart has several warehouses, it can conduct internal benchmarking tests to determine if one warehouse operates more efficiently than another. Different warehouses within the company can be compared based on a financial analysis of the warehouse operations, such as the cost of storing an item in each warehouse. The company can also conduct functional benchmarking, whereby a particular process at the warehouse is followed from beginning to end to determine if the company is deficient in any part of the process.

In external benchmarking, MyShoppingCart compares its warehouse with those of other companies that are outside of its industry. For example, the company could visit warehouses of successful clothing retailers to identify any processes that could be adopted to improve their own warehouses. External benchmarking allows the company to expand its knowledge base by observing best practices used in other industries.

MyShoppingCart could also engage in competitive benchmarking by hiring consultants to examine the level of efficiency at its warehouse. The consultants could conduct research studies to determine the strengths and weaknesses of the warehouse processes, compare them ...

Solution provided by:
J Pye, MSc
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  • MSc, California State Polytechnic University, Pomona
  • MBA, University of California, Riverside
  • BSc, California State Polytechnic University, Pomona
  • BSc, California State Polytechnic University, Pomona
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