quality control

Lululemon’s Potential Competitor May Have An Advantage Due to Product Recall

Posted on by gina30111f14

kit

Lululemon for anyone that doesn’t know, is an athletic apparel store for, men and women, mostly dedicated to yoga-wear and workout clothing, but slowly moving into the day-to-night market as well. They have been extremely successful in the workout retail division, especially for women who enjoy yoga or wearing yoga attire. Lululemon is also known for having yoga, running, weight training and other fitness classes for the public to attend.

Although Lululemon has grown into a global business from one store in 1998 in Vancouver to over 270 locations worldwide, every company has it’s period of decline. For Lululemon it was when  in March of 2013 due to their recall on leggings for being too shear, this caused a large sales reduction for them and other issues as well.

A new company called Kit and Ace has been introduced into the similar market of Lululemon. The founders of Kit and Ace are entirely backed by the founders of Lululemon due to a large issue in the Lululemon board of directors. Kit and Ace is still in its introductory stage as a business, but they plan to grow globally and appeal to the same target market as Lululemon.

I found this article to be extremely relative to what we are learning in class when it comes to quality control and operations strategy in a global environment. Dealing with quality control is definitely a topic that relates to Lululemon and their product recall. We learned the importance of implicating quality for companies because it can help or hinder a company’s reputation, which in this case the lack of quality on hundreds of thousands of leggings has definitely hindered Lululemon. It caused many customers from all over the world to lack confidence in their product and be cautious when it comes to purchasing this product. Kit and Ace is definitely going to use the quality control issue of Lululemon to help improve their own quality control and it’s possible that customers will become more loyal to them instead.

One thing that Lululemon has over Kit and Ace without a doubt is their operational strategy with expanding their company globally. Lululemon has a globally known name, it’s not just a Vancouver store, it’s grown into a well known company in all different countries. Lululemon realized how important it was for them to globalize because they saw it would improve the supply chain, reduce costs, improve operations, understand markets, improve products, and attract and retain global talent. Rather than staying a locally known store, they now have facilities closer to unique resources in different countries. They have reduced costs with lower direct and indirect costs with foreign locations. Lululemon’s competitive advantage is definitely differentiation because they chose to use unique material to create their products which have attracted customers who are into not only fitness but comfortable everyday wear as well. Kit and ace will need to work on global expansion by using the experienced and professional operational strategy of Lululemon.

 

Have you ever had anything recalled that you’ve owned? If so, did that recall cause you to think differently about the company?

How important is quality control to a company?

Could there be a competition between Lululemon and Kit and Ace now with customers cautious about Lululemon products?

http://www.foxbusiness.com/industries/2014/10/28/lululemon-founder-family-bets-on-casual-luxury-with-new-retail-venture-1029564423/

Is quality really key?

Posted on by cristian30111f14

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I consider myself a bargain shopper, especially when it comes to apparel. Why pay full price when you can just wait for the products to go on sale? Although, there are several other ways that can help you save money. You can sign up for a store’s cashback program, use online or in-store coupons, or even shop for defective products. Now some may be skeptical about purchasing defective products, but in reality you shouldn’t have to worry too much in regards to apparel, unless you are very picky. There are many situations where I would rather purchase a slightly defective item to save a big chunk of change.

As manufacturers produce hundreds and thousands of items, some are bound not to come out perfect. Quality control weaves these defective products from the approved products. From excess glue on a shoe to incorrect stitching on a garment, there are plenty of small details that can be irregular. Now these items don’t necessarily present a hazard to customers, but major retailers such as Nike cannot be seen selling sub-par products in major retailers. That is why they offer these “irregular” or “b-grade” products. You can find a few of them slip past to major retailers, but you mainly find these types of products in outlet stores. Now this scenario would be different in the auto industry, where defective components or products would not be allowed to be sold because of the dangers they may cause.

I bet that many of us have been to and/or shopped at an outlet mall and have seen how much cheaper apparel is compared to full price retailers. “Defective” products that I purchase from outlets (mainly sneakers and sports apparel) usually tend to be just as fine in my opinion. Things are meant to be worn and I believe little nicks do not really affect the overall look/performance of the particular product.

Questions:

Do you guys think these defective/irregular products are worth purchasing in the long run?

Do you think quality control might be too strict when it comes to products like apparel (that do not pose danger)?

Sources:

http://www.consumeraffairs.com/news04/2010/11/ever-wonder-how-those-factory-outlet-work-and-if-you-are-really-saving-any-money.html

http://abcnews.go.com/GMA/Consumer/story?id=1828568&page=1

What Happens When Operation Management Fails? Who Do We Blame?

Posted on by armani30111f14


Imagine you have a 10 page paper due at midnight and you’re almost finished, you are starting to feel relieved and BOOM!  Your computer crashes! What do you do? Who do you blame for it? I am sure many of your first reactions after crying all night is to take it back to where you purchased it from, and ask  them to diagnose the problem. You don’t actually care what the problem is and who’s at fault, you just want it fixed. But what happens when the situation is more complex and deals with a defect that cost someone their life? Do we pay attention now?

Last Monday, General Motors death toll rose to 21 people resulting from a defect in the ignition switch on older model cars. Although General Motors knew of the ignition switch defect almost a decade ago, they did not take action until recently. The ignition slips to off or accessory, cutting off power to the air bags so they will not deploy during a crash and also cutting electronic steering and braking, causing people to veer off the road. We see that when operation management fails, companies have to have recovery strategies in place. General Motors hired compensation expert Kenneth Fienberg who decide that all passengers, pedestrians, and bystanders who were injured in result to the crash could receive a settlement. In addition, General Motors CEO; Marry Barra fired 15 employees who knew of the defect.  Although a great start to reprimanding those who knew of the situation, the company is still being fined $ 35 million by the U.S. Transportation Department for failing to report the need for a recall have an estimated payout of $400 million to compensate victims.  Their recovery strategies could have been prevented if their operations team considered ethics.

This reminded me of our paper puppet exercise. Our assembly line created 20 puppets, where process one failed to mention defects in the original paper. As the defected paper continued through the assembly line it was cut, folded, and colored where the defect was not as noticeable anymore. Once it reached our inspection line, many of them did notice. Yes many of us laughed when we found out our assembly line continued to use them, but I don’t think we would laugh if we knew this case could possibly be the outcome.

Who do we blame for the death of these victims?  I am sure many of us would say General Motors. Why did they withhold so much information from the public? Why didn’t the National Highway Safety Administration take these claims more serious and open an investigation? Operations management failed, their strategic decision steps failed, and their quality management team did not ensure safety like it should have. As average citizens in society we often accept the answer that something is fixed, but do not care for all the details. This plays into why quality control often lacks ethical standards. We too have to do better.

Who do you blame?

gm-2014-recall-chart

 

 

Sources:

G.M Timeline of Problems and Who Knew

Nissan Factory Life: How Cars are Built

Ignition Switch Death Toll Rises to 21

Chevy Cobalt Photo

Saturn Ion Photo

Recall Chart Photo

Hog-wild for Factory Farming: Hot Dogs Made in China

Posted on by spr1324rzieman

As the Chinese population and economy continue to grow, safer and more efficient industrialization practices are necessary to keep up with the demands of a hot dog hungry China. This is not an exaggeration as China is “the world’s largest consumer of pork.” A recent takeover of Smithfield Foods by Shuanghui Holdings Ltd., “China’s biggest meat processor,” will provide valuable insight into industry practices that are commonplace in the U.S. Current processing methods in China lack quality control as the majority of meat is produced by small farms that process less than 500 hogs per year.

From Hog to HotdogThese “conditions on smaller farms can be squalid, with a lot of physical contact between farmers and animals, which can transmit disease.” This type of environment can become a breeding ground for contamination leading to outbreaks of diseases like swine flu and foot-and-mouth disease, having major health implications on Chinese consumers. Authorities blame irresponsible farming practices and the disjointed meat processing system that is not easy to “regulate and makes it more difficult to avoid bad practices.”

In contrast, the highly sophisticated and streamlined systems of pork production in the U.S. is often viewed negatively by Americans and referred to as “factory farming.” Smithfield’s facilities have the “capacity to slaughter as many as 110,000 hogs a day,” and most U.S. farms are much larger than their Chinese counterparts, raising over 2,000 hogs annually. Ironically, these modern processing techniques are the envy of Chinese authorities who are looking to utilize the “expertise of Smithfield’s management team to enhance its pork-processing facilities.” Skeptics claim that the Shuanghi-Smithfield partnership “will exacerbate such problems as complex supply chains and food-contamination risks.”

Although the trend in U.S. agriculture is to go “back to the start” as expressed in marketing campaigns by environmentally conscious companies like Chipotle Mexican Grill, this is not the reality in China. As health out-breaks are more widespread in this Asian country and regulation lacking, efforts to “control food safety” and create more modernized processing methods are a welcomed site.

In such an industry, operational expertise will prove essential in restructuring the pork processing system in China. They will likely face challenges like determining adequate process and capacity design for farming facilities and distribution channels; forecasting to meet the demands of a growing population; Slaughter Pigs in Chinaand improving inefficient and broken supply chains. Improved product quality will likely be most prominent and follow a manufacturing-based definition as increased standards will ensure a safer finished product.

On a personal note, I am an advocate for more naturally produced food in smaller farming environments, yet I understand that the demands and current conditions in China are quite different from the U.S. All criticism aside, the majority of the U.S. population relies on the safe meat supply provided by corporations like Smithfield to ensure peace-of-mind at the dinner table. How do you think that the new deal between Shuanghi and Smithfield will impact Chinese and U.S. consumers, respectively. Will the Chinese citizens have a similar sentiment toward industrialized farming practices in future decades?

Article Source

 

 

WHOLE Fresh Foods?

Posted on by spr1332khendricks

 

 

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Entrance of Whole Foods Market

 

 

 

 

There are companies who do it better than others, and those who do it better, eventually gain more customers, and a larger portion of that market. I am talking about priming consumers how to subconsciously shop by precise marketing tactics that show symbolism of freshness and purity.

For instance, Whole Foods Market strategically places fresh flowers at the entrance of their stores to create an illusion of fresh, different and what it means to have high quality not only in their products, but as well as in their environment.  A study indicated that flowers are associated with implications of fresh, therefore, gives the consumer walking in an unconscious suggestion that the store is bursting with freshness. They have dominated this type of consumer priming that positioned them to be leaders in the market, “priding themselves on selling the highest quality, freshest, and most environmentally sound produce.”

Another occurrence is the abundance of ice everywhere and sprinkled drops of water on produce being another symbolic unconscious suggestion of freshness and purity again. There is no actual need for the ice and constant water drops, as it tends to make the produce rot more quickly. However, the point is the perception and illusion of the products being fresh and of high quality and that association is continued subconsciously, with the consumer as they shop. Approaches alike are being implemented as retailers use these mechanisms of luring and encouraging customers to spend more than they need to and more than they intended to.

The point is that by focusing on how to hook and gain customers, is quality compromised at all? Definitely not, as one of the main differences between Whole Foods Market and other retail supermarkets is that they can actually back it up with all the products they offer and high level of customer service they provide.  They have quality standards and are extremely devoted to serving the consumer as the medium in making informed choices when it comes to discovering the best of the best. From seafood, meat and animal welfare to unacceptable ingredients in food they do not carry*. Their core business is to sell the highest quality foods they can possibly find at the most competitive prices. In addition, they evaluate quality in relation to nutrition, freshness, appearance, and taste, and their search for quality is a continual process involving the vigilant decision of buyers throughout the company.

So why do customers keep coming back even if they know they are being primed? They like the experience of going in there, as it is aesthetically pleasing to consumers’ senses and their subconscious. Besides, who doesn’t want better, quality products that aim at always being environmentally sound, and that are good for your mind, body and soul? Everyone’s a winner in this occasion.

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Caulk boards gives illusion and implication of being fresh daily

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Sources:

http://www.fastcompany.com/1779611/how-whole-foods-primes-you-shop

http://www.wholefoodsmarket.com/about-our-products/quality-standards/unacceptable-ingredients-food

 

*disclaimer  from WHOLE FOODS reserving the right to change this list at any time. Please note that creating a product with no unacceptable ingredients does not guarantee that Whole Foods Market will sell it. This list is intended for illustrative purposes only. If you are interested in selling your product to Whole Foods Market, please contact a WFM buyer.

 

Grubhub Grabs Profit by the Seams

Posted on by spr1332bhalan

GrubHub and Seamless have now merged into one company. Last year alone they collectively earned over $870 Million dollars in profit. GrubHub has Chicago origins while Seamless started in New York.  Mike Evans the co-founder of GrubHub and the newly combined companies COO said, “I’m excited about the expanded restaurant network that our diners will be able to use.”

The merge initially has many benefits, but over time there are very important executive decisions to make in order to optimize all dimensions of a quality service. One benefit is that combined they will operate in over 500 cities in the United States. They also decided to keep all 650 full-time employees. The former CEO of GrubHub Matt Maloney will remain CEO while the former CEO of Seamless Jonathan Zabusky will be president.  Both former companies have merged with much smaller organizations in the past. For example in 2011 GrubHub bought Dotmenu which gave them an extra 250,000 menu listings at different restaurants around the nation.

The company still has many decisions to make. One decision the company has yet to make is the name of the new brand. Perception is reality, and they should take very careful consideration of how to name the new brand. They have been heavy competitors in cities like Chicago for many years, and they have both built their own brands into what they are today. GrubHub did have more profit, and therefore it would be advantageous to keep that name over Seamless. Changing the name entirely is also an option. Since there whole process is derived from online use it is unlikely they will create a new name. For example if a family uses GrubHub or Seamless on a nightly basis, they will likely have the URL memorized or saved in their favorites. This means the new company needs to be very transparent and loud with their changes in order to retain the brand loyal consumers from both companies.  I have one recommendation if they decide to change the name of the company, and that is to buy a new website with the company name. Then link both former websites to the new website which on the surface seems like it would satisfice all the consumers. From there the new company needs to internally improve their servicing process.

After the merged company has chosen a conforming brand they should also merge the processes to optimize reliability. They can assume they will have a large impact in the market for online food ordering because separately they held large portions of the market share. It is likely that both former organizations had their own unique processes, but one standardized process would be most financially beneficial.

Do you think the new company should change their name? Or should they use GrubHub or Seamless as the new company name? Do you think they should standardize their processing systems? Overall do you think this merge is beneficial to the owners?

 Sources:

http://www.chicagotribune.com/business/breaking/chi-grubhub-seamless-20130520,0,4610644.story

McDonald’s goes on a McDiet

Posted on by spr1331edanos

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Most people associate McDonalds with the traditional meat and potatoes menu that they started with, the traditional cheeseburger and french fries.  However, in recent times the Oak Brook based chain, with its 68 million daily customers in over 119 countries has expanded their menu to include items that can satisfy all different types of taste buds   By implementing these new items, like the snack wraps, angus burgers, and steak bagels  McDonalds has tried to cover all territories of the fast food market.  They have even offered rib sandwiches and the most recent offering of mighty wings (traditional chicken wings). Since 2007, McDonalds has added over 60 items to their menu.

Lately, however McDonalds has started to eliminate items off of their menu.  Starting with the Angus Burger last month, McDonalds claims that 4 more items will soon be off their menu including the Caesar salads, McSkillet Burritos, Southern Style Biscuits and steak bagels.  This is in an effort to better manage a menu that has grown in the past 7 years.

Because McDonalds is such an excellent example of quality and process management, this article serves as a good example to look at the way the McDonalds handles and controls its processes.  The traditional idea of McDonalds was that it was a company that could do the basics and do them better than anyone else meaning serve traditional Cheeseburgers and fries in a quick, clean, and friendly restaurant and atmosphere better than any of its competitors.  Clearly it has done this as it is the biggest fast food chain in the world and as a matter of necessity for an ever expanding target market, the menu has swollen to a size the original owners would have never thought.

Therein lies obvious potential problems which I believe McDonalds has realized.  By having so many different products, it becomes difficult to effectively offer the same consistent quality of all of these items across the board.  This I believe is because of the numerous different processes each different item must go through before it reaches the consumer.  This ranges from ingredient storage, cooking, preparing, and delivery.  This also can cause process variation in McDonalds training process as the menu becomes harder to master for its employees.  With new items so frequently being added, McDonalds lends itself to a host of possible errors in everyday preparation of these items to its customers.

What McDonalds is doing by reducing its menu items slowly is going back to basics somewhat.  By creating a more manageable menu, McDonalds can better focus on improving on its continued improvement of processes already associated with existing menu items.  By Improving their base menu items, McDonalds should see an increase in customer satisfaction across the multiple countries it occupies.

Do you think that eliminating the numerous menu items listed and more will help McDonalds achieve a higher quality standard for its other items and improve more so on its current operations? How else could this move help McDonalds achieve higher quality across the company.

 

Sources:

Crains ” More food disappearing from McDonalds”

http://www.chicagobusiness.com/article/20130517/BLOGS08/130519794/more-food-disappearing-from-mcdonalds-menu

” WikiPedia McDonalds”

http://en.wikipedia.org/wiki/McDonald’s

Bloomberg New “McDonalds Cutting its Menu”

http://finance.yahoo.com/news/mcdonalds-reduce-menu-bloomberg-reports-101556997.html

Business Insider “McDonalds to Start Cutting Menu Items”

http://www.businessinsider.com/mcdonalds-to-start-cutting-menu-items-2013-5

 

United Airlines: Quality Taking Off or Crash Landing?

Posted on by spr1324mstapleton

In recent years, the United Airlines Company has fallen drastically in terms of Quality. Complaint after complaint United continued to try new approaches to improve user and product based qualities. As a result of their changes, they received a ranking of dead last in AirlineQuality Ratings. United is arguing this ranking of 2012 but I would love to hear what you all have to say after reading this blog post.

As we know, United Airlines reputation had plummeted after previous unfortunate events. This has had a huge impact on their quality as a company. They have been forced into the dead last position and now they are tryingdifferent approaches to fly their way to the top. The initiatives that United is implementing include sharpening performance, enhancing passengers experience and making service more responsive. The stigma of their reputation has haunted them throughout the years, but let’s see if the initiatives are taking off, or if the Airline Quality Ratings ranking is accurate.

The judging process of this ranking system is based off four key areas including “on-time arrivals, mishandled bags, rate of passengers bumped off overbooked flights, and the number of customer complaints.” Seeing as the complaint rates have doubled in the past year, I am guessing that United is wrong in what they have claimed to be doing. It appears that the features and conformance that it takes to have high quality ratings guide the performance of their product quality. The only place that they are visibly making an effort to improve is their status is by hiring more full-time reservations agents that angry customers use to vent about their frustrations! As an occasional United flier, I can say that I have seen an improvement in numbers but not an improvement in quality.

United Airlines has taken initiative to improve company quality through thte usage of social media initiatives. Mark Krolik, the Director of Marketing and Product Development stated, “Anyone who’s tweeted at United and gotten their problem resolved is someone who isn’t standing in line at the airport service counter.” This sums up the companies value in quality. They are not succeeding transcendentally. Rather, they are taking the bare minimum initiatives and hiring individuals for venting purposes as opposed to hiring individuals to make improvements.

Although it might appear that United is only making minimal changes, two out of three of their initiatives are being fulfilled through these simple differences. Many individuals have had great experiences in finding alternatives to cancelled or delayed flights and taking advantage of social media has also helped individuals stay calm in hectic times. The key to this ease in customer frustration revolves around loyalty and quick responses. For example, an individual with a delayed flight was so frustrated that she directly tweeted at united and told them about her angers. They responded promptly to her tweet giving her options around her delay but a service representative had already helped her. United even goes above and beyond by following up on tweets even if there is no need to. They are going above the expectations of quality responsive services through social media acts such as this one.

 

What do you all believe? Does United Airlines deserve the “dead last” ranking that they received? Through your own experiences or simply through this text, please let me know if you think they could be doing more or if they are dong enough in this first step of regaining loyalty and reputation.

http://www.cleveland.com/business/index.ssf/2013/04/united_airlines_says_2012_airl.html

Tepco Faces Decision to Dump Radioactive Water in Pacific

Posted on by spr1311sabraham

Are ethical dilemmas an issue for operational management? If your answer is no, you are wrong.  There are many ethical dilemmas that companies face each day regarding their operations.  This Bloomberg article regarding an ethical decision needed to be made by Tokyo Electric Power Company (or ‘TEPCO’) , a Japanese electric utility company, is ground shaking with the large implications that will result per their ultimate decision.

TEPCO has discovered leaking in water storage pits within the Fukushima atomic station- The station was destroyed in March 2011 from an earthquake and tsunami simultaneously (link to article —-> http://www.telegraph.co.uk/news/worldnews/asia/japan/8953574/Japan-earthquake-tsunami-and-Fukushima-nuclear-disaster-2011-review.html)

From within the seven pits, leaks were found in the basements from when the disaster teams were called in to cool down the reactors. The company is now under pressure because it may be forced to dump the radioactive water in the Pacific Ocean.

Time is of the essence due to the water busting through basement walls at roughly 400 tons per day.  This water is then becoming contaminated, thus a huge issue.

TEPCO has two operational decisions to make to pass down to its work crew:  reduce radiation levels from the water by pouring it into the Pacific Ocean or continue their production of “above-group storage tanks”.

Why such a tough decision for management?  It is essentially impossible to keep up with the inflow of water that is leaking. Even with production of 450,000 tons of the tanks above ground by September 2013 and 700,000 tons by the middle of 2015 this company clearly is fighting an uphill battle.

What are the effects of their decisions? Well, an important factor in this are human lives.  The United Nations Scientific Committee on the Effects of Atomic Radiation (or ‘UNSCEAR’ link to their website here –> http://www.unscear.org/) has remarked that humans can get cancer, such as leukemia, with moderate to high levels of exposure to the toxins.

Even though TEPCO is working on the removal of many of the radioactive substances, the purification system they have created continues to see operational issues in functioning properly.  The company’s image continues to be at stake, they face legal issues, disrupting the fishing industry, and their company’s attractiveness to investors in the future. Other than the business side, their obligated to think of their own people as in their workers and also those people that this could affect.

The original cause of the leaks could have potentially been a flaw in the staffs proper inspection of the equipment and additional tests before dumping toxic water into the leaking pits.

This is an operational nightmare for TEPCO.  I feel that this story directly related to what we have already learned within class.  Within the puppet making exercise the workers continued to feel pressured by upper management to just get the job done. Also, within the tower exercise having an effective team leader was crucial along with the planning phase of construction.

I am curious to hear your thoughts on what truly caused these leaks and what you would do in this situation.

Link to article –> http://www.bloomberg.com/news/2013-04-11/tepco-faces-decision-to-dump-radioactive-water-in-pacific-ocean.html

Is Apple losing its mojo?

Posted on by f1213nshah

Apple has been at the top of its game for over ten years now. Apple has had great success with its invention and especially with the Iphone. The Iphone was the top selling phone each year that it came out.  Even though it’s been the top selling phone for years, Google’s Android platform is starting to make its way up. According to recent polls and editorials, the Iphone is starting to slip away and more people are starting to prefer Google’s Android platform.

  • The Android platform now accounts for 75% of the smartphone market, which is up from its last quarter’s 68%. Apple’s Iphone dropped from being 17% of the market to 15%. This shows us that people are slowly starting to make the switch from an Iphone to phones with an Android operating system.
  • Apple is known for having loyal customers. Each year there newly innovative Iphone hits the top of consumers’ wish list. It seems like that is starting to change. According to Strategy Analytics 88% of U.S Iphone users said they would stay with the IOS for their next smartphone. That number has dropped from 93% from the previous year. In Europe the numbers dropped from 88% to 75%. This shows that people all around the world are starting to switch from IOS to another operating system.

There must be a reason why Apple fans are starting to slowly switch to Android phones. A big problem that Apple ran into was with the quality of its newest Iphone the Iphone 5. There were many complaints by consumers that there new Iphone 5 came out of the box with scratches or dents. Apple is known for making top quality products, and to produce thousands of Iphone 5 with quality defects is unacceptable. There were reports that this was due to the high demand and that they could not be made in time. It seems like Apple was choosing quantity over quality.

Is Apple starting to lose its touch? Do you think that Apple will be able to recover from the bad rep it got for the quality issues with the Iphone 5?

http://news.yahoo.com/4-signs-iphone-no-longer-smartphone-king-103200005.html