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MAN 320 Project Summary The problem that the Reservoir Dawgs decided to solve is one in which almost everyone has either been directly or indirectly affected. The problem is purchasing an item that rings up incorrectly. Whether it be standing next in line or actually happening to you, it can be very frustrating and inconvenient as a customer. Since this problem occurs at so many retail establishments, we narrowed our research to one particular store, Office Max. We chose Office Max because of its size and due to the fact one of our group members, Tony, is employed at Office Max. Tony already had an understanding of the policies and procedures of Office Max. We felt this knowledge would help us in finding a solution to our problem. We first had to find the reasons why errors in pricing were occurring. We created logs that would be kept at each register. Whenever there was a discrepancy in the price of an item the cashier was instructed to record it in the log. Each entry included the type of item and why the problem occurred. From this we developed a check sheet, that listed the type and frequency of the pricing problem. The check sheet lead us to find that 45.5% of the problems were because of items marked incorrectly. Items put in the wrong place accounted for 36.4% of the problems. From the check sheet information we developed a Pareto Chart to prioritize our improvement efforts. We decided to focus on the problem of items marked incorrectly. More specifically the computer/furniture department, where it appeared Office Max was losing the most money. When items were marked wrong the store gave the customer the lower price automatically. In one instance, the store lost $100. With these findings we began to ask the five whys and develop an Ishikawa diagram (fishbone diagram). We used this to determine the root cause of mispricing. We found that there was a lack of communication between managers and employees. Managers are never told about the pricing problems that occurred, and likewise the managers never questioned employees about pricing problems. Managers never communicated to employees that it was their responsibility to keep an area in order, i.e. the computer/furniture area. Because managers appeared not to worry about pricing discrepancies, the employees never worried about it either. How could any one expect them too? The Reservoir Dawgs decided that some type of communication system was needed at Office Max. In speaking with one of the managers of Office Max, our group member found that the manager agreed that there was a no responsibility given to employees. The Reservoir Dawgs decided the best solution to these problems was the same thing we used to detect the problems in the first place: keep logs. Our solution was to have logs at the registers at all times. This would allow the cashiers to keep track of all the price discrepancies. At the end of each night a manager checks the register tape to make sure it corresponds with the register drawer. In addition to this, we felt that looking over the logs would enable the managers to fix the problems. It would, also, give the managers an idea of what area of the stores need the most attention concerning price discrepancies, the next day. There are two shifts per day at Office Max, and each shift has a manager along with two associates. The day manager can take the information from the previous day and give the responsibility to correct the problem to the two floor associates, who will keep the areas organized and randomly check other areas to make sure the areas have the right prices. In doing this, we hoped to have an increase in communication among employees and management, and to better the efficiency and quality of service that customers receive. We placed the new logs at all the registers and used them for a week. At the end of the week we made a new check sheet and compared those results to our previous data. We found that the amount of items marked incorrectly decreased by 5.5%, and items put in the wrong place decreased by 16.4%. No items had to given to customers at a lower price because of any discrepancies. Therefore, saving Office Max money which undoubtedly will make a huge difference in their bottom line. By making the store more organized it looked more appealing to customers. One of the most important changes, however, is the feeling of empowerment among employees. Tony, who is employed by Office Max, said that he, along with other employees felt they had more responsibility. This is due to the fact that the managers now cared about what was happening. Also, when less problems occur at the registers it gives the customer a better impression of the business. Receiving more accurate and better quality service can also help insure repeat customers. |
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