Improving Cvs Inventory System

Topics: Management, Better, Inventory Pages: 14 (4310 words) Published: December 9, 2010
Improving CVS Pharmacy’s Inventory System

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Table of Contents

1. Executive Summary---------------------------------------------------3 2. Discussion
I. Define-------------------------------------------------------------------4 II. Measure----------------------------------------------------------------5 III. Analyze-----------------------------------------------------------------7 IV. Improve----------------------------------------------------------------9 V. Control-----------------------------------------------------------------11 3. Appendix---------------------------------------------------------------13

1. Executive Summary
The purpose of this project was to gain experience in quality improvement by working with an organization to identify a business problem, analyze the causes, develop an improvement plan, implement changes, and to verify the effectiveness of the solutions. For this project we had to keep scope in mind. This project had to follow certain criteria, such as: that it is a manageable project with a local organization, it can be completed within the time frame of the course, it has a direct impact on external customers, it is relatively simple, and that it is not something that is currently undergoing major changes.

The partner organization that our group worked with was CVS Pharmacies, and our main problem had to do with their current inventory process. Through problem identification tools, that helped us determine the what, when, where, how and who of the problem, as well as through tools such as SIPOC, scatter plots, C&E diagrams and KPIV/KPOV diagrams we were able to develop a focused problem statement.

Our focused problem statement says that due to a poor inventory process, it takes too long for employees to find items that are out of stock (on the shelves), that have been requested for by customers, resulting in lost productivity, as well as frustration by customers, employees and management. This lost productivity results in poor quality that can be associated with a cost, as poor quality has a cost.

We used a DMAIC (Define, Measure, Analyze, Improve, Control) approach to help us with this project. The define portion was used to identify the nature of the customer service problem, the measure phase was used to determine key service metrics, during the analyze stage we analyzed the reasons for poor service, within the improve stage we established new service protocols and implemented training strategies, and during the control phase we implemented controls to maintain the improvements that have been made.

Some of the major results/findings of the report can be found in the graphs below. They show a summarization of data collected before and after recommendations have been made, in order to determine if any improvements have taken place.

In conclusion we were able to make dramatic changes within the CVS we partnered with regarding their inventory process, we were able to reduce average times by 54%, range reduced by 70%, and standard deviation reduced by 50%, it can be concluded that the implementation plan we have instilled within the organization has made improvements to the overall inventory process. Recommendations for the CVS organization include two main ideas, organization and employee motivation. It is crucial that CVS maintain the current organization of their overstock area, with each isle having its own place within overstock, making it much easier for employees to find items. Also the CVS must keep their employees both well informed and motivated. Their employees must understand how important it is to have an organized stockroom, and must be taught how to maintain it. Also employers must motivate their employees to keep a more organized inventory, and also help motivate them to try and keep the shelves stocked, preventing them from even having to go in the overstock inventory area. In conclusion: due to an...
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