Reference no: EM132858806

Rusty's Golfcars

Specifically, he is concerned that:

Rusty's Gofcars is a local golfcar sales, service, and repair shop that employees several experienced repair technicians and has built a reputation for being the best golfcar shop within 200 miles. The business has grown and is financially successful but lately Rusty has begun to realize his staff spends a lot of time and energy fixing mistakes or working inefficiently. He is also concerned that some of the major activities may not be very well organized. 

• Too much time is spent managing inventory and the inventory records are too-often incorrect.
• The repair technicians spend too much time looking for tools, materials, and parts.
• Customers often must wait two weeks or more for their golfcar to be repaired. Sometimes this is because parts that were thought to be in stock are not and so they must be ordered. 
• The number of golfcars waiting to be repaired seems to have grown steadily larger and customers are becoming frustrated about the delay.
• The shop is running out of space to park all the golfcars waiting for repair.

Rusty is afraid the shop is not providing the high-quality service it provided in the past.

1. Describe four types of Cost-Of-Poor-Quality (COPQ). Which of these may be related to the specific concerns listed above? 
2. Rusty recently learned about 5S and Lean. Explain why you would, or would not, recommend Rusty use 5S or Lean to address the problems. Which three process management tools would you recommend Rusty use to help better understand what is going on? Why are those tools appropriate? How will they help Rusty understand the quality problems at his business?
3. Rusty and his team have used the tools you recommended to come up with two improvement projects. "Project Inventory Improvement" would cost $10,000 initially and would save about $6,000 per year by avoiding the purchase of unnecessary parts. "Project Quick Service" would cost $5,000 initially and would speed up the typical repair time, but no one is sure how much. What factors in addition to cost should be considered? How would you decide which projects to implement?  
4. Is Rusty's Golfcars manufacturing or a service business? Explain your reasoning.