We ship an average of 100 orders a day with an average of 4 p/n per invoice. The p/n quantities can range from 1 to 5000. We hand pick, count and pack.

We receive complaints, usually short shipments or incorrect p/n, on 1% of the orders shipped. These complaints result in over 50% of our customer complaints as well as increased paperwork, evaluation and accounting. Does this 1% return rate due to shipping errors seem high (it does to us) or is this typical for manufacturing companies who ship this quantity of product?

I can't say if it is high or not, but I will say this...you've identified a great improvement project!!!

It would be wonderful if you worked with the shipping department (including the operators) to do root cause analysis, action plan development and looked at the possible cost savings!

Better yet, let's say that your complaint number is normal...if you improve the process, you have a possible marketing and sales advantage over your competitors.

Money saved and money earned...Management will be able to hear the ca-ching of dollar signs!

I am not sure how typical it is but I do know it is unacceptable in the automotive industry. The expectation is zero defects. I suppose there is such a thing as overkill but I would be looking for corrective actions on the 1%.

If you don't mind a suggestion, I would be developing an employee participation to identify and correct areas where these nonconformities could happen. I would start with employee meetings to describe the problems, then post a LARGE "map" of the isolated process on a wall in the break room. Invite employees to stick up "post-it" notes along the map to point out areas of concern. Discuss these at "quick and casual" meetings and determine which identified area may be key. Use a different color "post-it" for employees to post ideas on how to improve those areas. Treat all suggestions with respect. No idea is too bad to at least consider. Encourage ideas based on other ideas. Share the "glory". Give the people who do the work a chance and you may be surprised to see the results.

Good luck.

Dave

We ship an average of 100 orders a day with an average of 4 p/n per invoice. The p/n quantities can range from 1 to 5000. We hand pick, count and pack.

We receive complaints, usually short shipments or incorrect p/n, on 1% of the orders shipped. These complaints result in over 50% of our customer complaints as well as increased paperwork, evaluation and accounting. Does this 1% return rate due to shipping errors seem high (it does to us) or is this typical for manufacturing companies who ship this quantity of product?


It doesn't matter what we say here. Only when your management decides that something needs to be done will anything really happen. Give 'em the facts and figures and let them decide, that's why they make the big bucks.

Thanks for your inputs. I agree that we should attempt to improve and have started the ball rolling in that direction.

From a business perspective, it would make sense for you to estimate (US$) how much this problem (1% inaccurate shipments) is costing you. Some costs are reasonably easy to quantify, such as shipping fees, accounting re-work, etc. Other costs are somewhat intangible, such as loss of customer loyalty due to dissatisfaction.

When you start an improvement project, you will normally find the "low hanging fruit" opportunities, which, with almost no investment will provide you significant improvements in shipment accuracy. However, due to the "law of diminishing returns", some improvement activities might not be economically advisable.

Typically, management will be much more willing to support improvement activities when they see a return on their investiment. I would encourage you to keep in mind the $ quantification concept when moving forward with this improvement activity. And good luck.

We ship an average of 100 orders a day with an average of 4 p/n per invoice. The p/n quantities can range from 1 to 5000. We hand pick, count and pack.

We receive complaints, usually short shipments or incorrect p/n, on 1% of the orders shipped. These complaints result in over 50% of our customer complaints as well as increased paperwork, evaluation and accounting. Does this 1% return rate due to shipping errors seem high (it does to us) or is this typical for manufacturing companies who ship this quantity of product?

At 1% of 100 orders per day, that would be 1 complaint per day, on average, or around 250 customer complaints per year. I agree it is up to your management, but 250 customer complaints per year sounds VERY high to me. That has to be causing your customers a lot of grief, and consequently costing you a lot of money and likely, some business as well.

Are you loosing any past customers?

Do a pareto by root causes to look for what seems to show up as a common reason.

Ask the employees in the pipeline what they see as contributing to the problem.

As was already said, any analysis should quickly turn up some low hanging fruit which should quickly elinimate 20-30% of the hits.