Why is DAV using Statistical Process Control (SPC)? What are the challenges in applying SPC to a service industry compared with manufacturing?
Ms Kluck was advocating the SPC as a means of improving the efficiency and accuracy of the Customer Service operations. Reducing errors increases the productivity, lowers the costs to the company. Customers benefit from an improved customer service aspect and over time will lead to higher revenues. Any time costs can be reduced and revenues can be influenced higher, is a good capitalist practice. The challenges with applying SPC to the service industry as compared to the manufacturing industry are in manufacturing there are processes that are repeated. Measuring these processes is inherently easier because they are more common. The service industry is not replete with processes throughout. There are some areas within the service that SPC lends itself as an analytical tool, such as back office operations. Service industry interaction is many time customer facing and interactions with customers are as varied as there are customers.
How large should each sample size be for the experiment Schoss and Kluck describe on page 7 of the case?
The first 12 weeks of the data in aExhibit 4 represent the diagnostic period for the Policy Extension Group. What are the 3 sigma control limit for the process? In which of the subsequent weeks is the process out of control (if any)?