Memo

To: Company President

From: Adriana Rojas
Date: November 9, 2010
Re: Operational performance measures

The weekly production efficiency report has been submitted by the controller. The data
compiled in these reports for a recent six-week period is illustrated in the graph below:
100 98 29
95 96
94
95 92
27
90 90 26

85
Percentage

Complaints
25
23
80 22 23

75
70 69
70 72 20
65 66
20
65 62

60 18 17
1 2 3 4 5 6
Week
Percentage of manufacturing cycle efficiency Percentage of on-time deliveries
The data above illustrates
Numberseveral facts
of customer such as the steady increase of complaints
complaints (with slight
decreases during weeks 2 and 5), the steady decline of both manufacturing cycle efficiency
(MCE) and on-time deliveries. These patterns give rise to several questions regarding areas
of possible concern.
Manufacturing cycle efficiency
There is a need to determine the cause for the decrease in the MCE. For example, are non-
value-added activities, such as inspection time, product transportation or inventory storage
taking longer than expected, thus negatively impacting MCE? If this is the case, there is a
need to identify the cause for the variances in order to address and correct the problem
quickly. If it is a factor such as production/processing time, then it is necessary to determine
whether elements such as supply deliveries are affecting delivery time.
On-time deliveries
The chart above reflects a relationship between the MCE and on-time deliveries. For
example, when MCE increases or decreases, on-time deliveries percentages do the same.
Specific details are needed about the deliveries made during these weeks, especially about
those that were not made within the scheduled delivery period. This information may be
helpful in identifying the point of origin of the problem, such as production process,
purchasing, warehouse, etc.

1
Complaints
Considering the apparent connection between MCE and on-time delivery, the question
becomes whether this is resulting in customer complaints. Investigating if there is such a
connection may explain some (not all) of the documented complaints. Additionally, a look
into current quality control measures may help identify other factors, for example, determine if
defective merchandise may be resulting in rising customer complaints.
In conclusion, there is an apparent connection between factors affecting the declining MCE
and the decline of on-time deliveries. This may explain some of the steadily increasing
customer complaints. Additional information about non-value added activities is necessary to
determine which may be affecting delivery timeliness and resulting in customer complaints.
Furthermore, focus on production control quality may yield additional information about other
concerns such as defective merchandise.