Question

Place yourself in the role of upper management for any organization producing goods or service. Identify at least four quality control subjects that are important to internal organizational performance and that the organization should measure. For each quality control subject, propose a unit of measure.

Answer 1

Consider myself to be the COO of a Logisitcs service provider company. My company provides integrated warehousing and logisitics solutions to other companies. Following are some of the Quality Control subjects I would consider important to my organisational performance along with metrics that I would measure for those:

1. Inventory:

Metrics to be measured under this quality control subject -

a. Inventory Turns

b. Fill Rate

c. Fraction Time out of Stock

d. C2C Cycle Time

e. Average Inventory Held

2. Transportation:

Metrics to be measured under this quality control subject -

a. Average outbound shipment size

b. %age of FTLs (Full Truck Loads) out of all outbound shipments from my warehouses.

c. Fraction transported by a particular mode of transportation.

d. Average outbound transportation cost per shipment.

e. Percentage of On-time deliveries

3. Facilities:

Metrics to be measured under this quality control subject -

a. Total Warehousing & Transporation Capacity

b. Utilization (region-wise as well as transportation mode-wise)

c. Volume Contribution of top 20% SKUs and/or customers

d. Service Level.

e. Quality Losses due to material handling

4. Sourcing:

Metrics to be measured under this quality control subject -

a. Customer Reliability

b. Lead Time of customer

c. Days Payable Outstanding

d. Product Variety.