The Customer Profitability Measurement Group (CPMG) has taken a deep analysis of Sunshine Shirts' performance measurement system. With four main factors recognized, there are related recommendations provided.
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Storage: not enough storage space.
SS always produce each order in advance so that there is a shortage for manufacturing space to store the finished products. Thus, a just-in-time system is recommended. According to the extra cost needed for this system, CPMG recommended a partial Just-in-time process to provide the shop customers to make sure a zero or low stock. .
Delivery: delivery not on time unsatisfied customers.
By reviewing SS, CPMG found that SS has an extension of the production cycle. However, the large amount of inspection could delay the accuracy of time delivered to customers. Therefore, CPMG recommends SS to improve its efficiency to reach a higher inspection and reputation and make the delivery on time at the same time. Besides, the shortage of storage space costs more time finding products' accurate position. .
Quality: TQM is not efficient leading to customers' unsatisfaction.
Customers complained that the ink eventually cracks and peels off. To improve the quality to satisfy customers, there are two recommendations. One is that SS could select higher qualified materials from overseas. Another is that controlling the procedures of inspection rigorous to increase the efficiency, such as training employees and increase the control power to prevent the low qualified products occurred. .
Customer profitability analysis: Team and shop group contribute to the loss.
CPMG used the customer profitability analysis to find out which group made the negative contribution to the company. The result shows that the team and shop group are making a loss for the sales, especially for the shop team. The analysis and recommendation will be detailed in the discussion.
Performance measurement.
Because there are only financial performance reports provided, CPMG thinks that SS need to provide a summarized non-financial performance such as BSC to show its financial, customer value, internal process and learning growth.
