Bringing Beauty Back

Altered cause and effect diagram helps cut back order-entry errors

by Bruce Bader

Little Rapids is a disposable health and beauty aids manufacturer that sells to distributors and consumers. In early 2009, it received a frantic message from one of its largest customers, who said there were several problems with its orders and that every invoice it received had a discrepancy.

To address the issues, Little Rapids decided to form a cross-functional team that would rectify the problem using Six Sigma.

A survey of customers revealed the problem: inaccuracies in obtaining and entering orders. More investigation showed the process was not only a customer irritant, but it also increased costs. The goal of the project became achieving an order-accuracy rate of 100%. The team called it getting "beautiful orders."

Analysis using Pareto charts helped determine the types of order-entry errors. An assessment chart was used to determine whether the measurement system was functioning correctly. The team also analyzed data to determine the extent of the problems in the order-entry process.

At this point, the team was ready to use a cause and effect diagram to identify the possible root causes of order-entry errors. But because many team members were unfamiliar with that tool and because most of the data from distributors and customers was anecdotal, the team decided to bridge the gap with a "soft tool."

An affinity diagram was used to bring together related possible causes into natural groups for the cause and effect diagram. Those groups became the bones of the diagram (see Figure 1), allowing everyone to see structured relationships for seemingly unrelated causes. Some bones were well-populated, leading to even easier identification of critical causes.

Figure 1

Price check

The critical cause—routine pricing miscommunication—was addressed by changing the way Little Rapids records and tracks prices and price changes. Using a t-test, the organization determined that 26% of promotional pricing changes were used by customers prior to entry into the Little Rapids computer system, causing miscommunication and order errors.

In response, the organization developed a method to ensure price changes were communicated throughout the sales chain with feedback mechanisms and a schedule of future changes to ensure continuation of the process.

Historically, the responsibility to manage a process was shuffled randomly among staff until forgotten. To prevent that from happening again, Little Rapids created a themed poster to remind the team how crucial this new process was to preventing errors. With the organization’s headquarters in Green Bay, WI, the theme was easy to select: football.

All together now

In the illustration, each price database is a lineman for the team, and the quarterback is the sales manager. If all three linemen are blocking the same direction, the quarterback is safe; if not, the quarterback is in trouble. The inference that all price records must move together or the sales manager will get hurt was not lost on the audience. As it turned out, office workers found the visual reminders difficult to ignore.

To control the process, Little Rapids scheduled periodic samplings for price accuracy and used a U-type control chart to record pricing errors as defects. If the defect rate exceeded the control limit, the organization called a meeting to find the root cause of the problem.

Since the completion of the project, defects per million opportunities have dropped from 263,000 to 33,000, customer satisfaction has risen, and order-to-cash time has been reduced by 5% because of an improvement in the "days outstanding" metric—a beautiful outcome thanks to beautiful orders.

Bruce Bader is the continuous improvement manager at Little Rapids in Green Bay, WI. He earned a master’s degree in operations management from Northern Kentucky University in Highland Heights. He is a senior member of ASQ and a certified quality manager and Six Sigma Black Belt.

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