Improving late delivery performance a study of rochdale spears ltd, company

UNIVERSITY OF ECONOMICS HO CHI MINH CITY
International School of Business

----------------------------

PHAM THI AI VAN
IMPROVING LATE DELIVERY PERFORMANCE:
A STUDY OF ROCHDALE SPEARS LTD, COMPANY

MASTER OF BUSINESS ADMINISTRATION

Ho Chi Minh City – 2018

1


UNIVERSITY OF ECONOMICS HO CHI MINH CITY
International School of Business

----------------------------

PHAM THI AI VAN
IMPROVING LATE DELIVERY PERFORMANCE:
A STUDY OF ROCHDALE SPEARS LTD, COMPANY

MASTER OF BUSINESS ADMINISTRATION

SUPERVISOR: TRAN HA MINH QUAN

Ho Chi Minh City - 2018

2


Executive summary
In today‘s scenario, delivering product to the customers at the shortest possible time is
a challenge for all the manufacturing industries. In typical manufacturing
organizations, functional units have their own goals. As there is no single functional
unit responsible for on-time delivery, in traditional organizations on-time delivery has
received minimal attention. An important feature of the conventional wisdom of make
to order (MTO) manufacturing has been that if a plant‘s management wishes to
achieve good delivery performance they need to quote a long lead time. The long lead
times give them the ability to plan production effectively and achieve high levels of
delivery performance. However, it has been reported that the reverse situation occurs,
namely manufacturing plants quoting short customer lead times were, in fact,
achieving much better delivery performance than those plants that quoted long lead
times (Szwejczewski et al. 1997).
Although this topic has received considerable attention in the literature, most of the
articles are restricted by their limited approach concerned primarily with the effect of
various delivery date assignment methods. Manufacturing is an integrated system
covering everything from order receipt through to the product shipment (Hitomi
1991). It covers a wide range of activities in many functional areas including planning
and design, purchasing, production, inventory, distribution, marketing and sales. Ontime delivery or lead time cannot be dealt with in isolation. In order to make any
realistic and sustained improvement in (on time delivery) OTD performance, the
whole manufacturing planning, control and execution cycle and associated systems
have to be taken into consideration.
Realising the importance of such an approach, this study proposes a model to improve
on-time delivery performance through business process model integrating two
common processes involved in manufacturing planning, control and execution cycle
for MTO situations and a database for supporting various functional applications
through basic and transaction data. The proposed model was implemented through

Rochdale Spears Ltd, company.
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The rest of the paper is organised as follows. First, a review of the company
background as well as current problems that company is facing. Next, the proposed
improvement solutions are presented, followed by a section on a systematic
investigation of the on time delivery problems and implementation of the solutions to
overcome the problems in Rochdale Spears company. Finally, research findings and
conclusions are drawn.

4


Acknowledgements
I would especially like to show my gratefulness and special thanks to my supervisor –
Dr. Tran Ha Minh Quan for all his continuous supports, advices and instructions
through the process of researching and writing this thesis. Without his enthusiastic
help, this thesis could not have been accomplished.
I also would like to show my gratitude to ISB lecturers, my colleagues at work, my
classmates at ISB for their valuable knowledge and continuous support. I also send my
sincere thankfulness to my family for their support and encouragement throughout my
years of study.

5


TABLE OF CONTENTS
Executive summary ...................................................................................................... 3
Acknowledgements ....................................................................................................... 5

I. PROBLEM IDENTIFICATION ............................................................................. 7
1.1

Company background .................................................................................... 8

Company mission .................................................................................................. 8
1.2

Problem symptoms ......................................................................................... 9

1.3 Problem identification ..................................................................................... 11
Central problems validations ................................................................................. 14
1.4

Potential cause of problem and the justification ....................................... 24

1.4.1

Lack of cross-functional knowledge ..................................................... 24

1.4.2.

Company’s service innovation strategy ............................................... 25

1.4.3

Personality difference ............................................................................ 25

II. ALTERNERTIVE SOLUTIONS AND ACTION PLANS ............................... 28
2.1 Solutions............................................................................................................. 28

2.2 Solution details .................................................................................................. 28
2.2.1 Estimate an accurate and unified delivery date using a systematic
procedure ............................................................................................................. 28
2.2.2 Facilitate communication as the primary condition ............................... 29
2.2.3 Focus on processes rather than on functional units ................................ 29
2.2.4 Closer coordination with suppliers ........................................................... 30
2.2.5 Employee involvement ............................................................................... 30
2.3 Implementation of the proposed improvement solutions ................................... 30
2.4 Difficulties faced: ............................................................................................... 32
2.5 Results of implementation of the above solutions .............................................. 33
III. CONCLUSIONS .................................................................................................. 35
Appendix A: In depth interview information .......................................................... 36
Reference ..................................................................................................................... 53

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LIST OF TABLE
Table 1. Company sale report 2016-2018 ……………………………………….08
Table 2: Shipping performance 2017………………………………………….....09
Table 3: RH team lead time report ……………………………………………….10
Table 4: Key accounts team lead time report……………………………………10
Table 5: Key accounts - sale report………………………………………………11
Table 6: Weekly performance report -2018…………………………………......33
Table 7: Weekly average lead time report 2018 ……………………………......34
LIST OF TABLE
Figure 1: Process of an order --------------------------------------------------------16
Figure 2: Problem validation --------------------------------------------------------21
Figure 3: Initial cause effect map ---------------------------------------------------23
Figure 4: Final cause and effect map -----------------------------------------------27

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I. PROBLEM IDENTIFICATION
1.1

Company background

Was founded in 2003 by entrepreneur Geoff Hawkes, Rochdale Spears is a very
successful group of companies which design, manufacture, and distribute designer
home furnishings and decorative accessories through high-end distributors and
retailers in USA and our new internet platform for international distribution, Resource
Decor. The Group continues to grow rapidly with almost 4,000 employees in Vietnam
across 5 manufacturing plants, headquarters in Hong Kong and offices in the US. The
success of the business has led to established, long-term relationships with Century
Furniture, Lillian August, and Restoration Hardware, Morden History, Anthropology,
and others customer which brings a huge of orders for the company.
With a reputation for exceptional quality and exquisite craftsmanship, Rochdale
Spears Company has become a proud leader in exceptional design, innovative product
development and world-class manufacturing in the luxury furniture market.
Table 1. Company sale report 2016-2018
Total value/account/year
2018

Account/year

2016

2017

RH

$

56,849,682

$

67,336,479

$

78,609,705

Major accounts

$

4,629,986

$

11,213,378

$

19,216,946

Key accounts

$

21,368,477

$

17,487,474

$

16,413,191

Total

$

82,848,144

$

96,037,330

$

114,239,842

(forecast)

(Source:RSC)

Company mission
Rochdale Spears Company is an internationally focused, business-to-business
enterprise, serving some of the biggest names in the luxury furniture market. The
company is proud leader in exceptional design, innovative product development and
world-class manufacturing.

8


RSC is proud to uphold a positive culture and safe working environment for our team,
allowing them to perform at their highest ability, and provide outstanding service to
our customers.
As custodians of the planet, the company remain committed to reducing our impact on
the environment, supporting local communities, sourcing the highest quality natural
materials and adopting sustainable principles where possible.
1.2

Problem symptoms

To find out what are the current problems that our company is facing, the writer had
carried out in-depth interview with some of managers as well as staffs in the company.
Most of people realized that although the business of the company is increased in total
amount as we are widening the new factory at the other Plan, however, we have lost
much of orders from some of initial important customers due to our service was not
really good, especially that the shipping performance showing high rate of late
shipment while the percentage for on-time shipment is occupied a small number, it‘s a
poor performance.
Table 2: Shipping performance 2017

Shipping performance

(2017)
60.0%
40.0%
20.0%
0.0%

45.7%

29.6%

50.7%

24.7%

16.7%

32.6%

42.0%

16.0%

42.0%

Resto

Major Accounts

Key accounts

Late

45.7%

50.7%

42.0%

Ontime

29.6%

16.7%

16.0%

Early

24.7%

32.6%

42.0%

Late

Ontime

Early

(Source: sale team-RSC)
According to the Shipping performance report from Sale department in 2017,
generally, it is showing clearly that the company have a poor delivery performance.
Major account occupied the highest rate of late shipment with approximately 51%,
following is RH with around 46% and the last one is Key accounts with 42%.
However, Key account had the lowest rate of shipment shipped on-time with only
16% for the on-time POs and 42% was for the early shipment. Major accounts and RH
9


were following with 16.7% and 29.6% of on-time shipment, 32.6% and 24.7% of
early shipment respectively. This result significantly impacted to the company
performance to customers as well as causing a huge of increasing cost for the
company.
RH, the biggest customer of the company has intended to move their business to the
other factory as our performance is going down recently. Most of the shipments are
not met what customer requested as well as what we confirmed. Production lead time
is 118 days in average for mass production while our committed lead time is 90 days
for the repeated orders and 120 days for the newness ones. The below table is taken
from our weekly report by RH sale team:
Table 3: RH team lead time report
Lead time

Days

Running average

118

Average 12 weeks

116

Average 4 weeks

114
(Source:RSC)

In the same situation with RH, LA, MH which are our key accounts but their orders
are falling down recently as we did not serve they well, general production lead time
is more than 120 days, it is much more than our committed lead time. The customer is
not willing to wait for nearly a haft of year (147 days) for a product.
Table 4: Key accounts team lead time report
Lead time

Days

Running average

147

Average 12 weeks

145

Average 4 weeks

143
(Source:RSC)

10


Table 5: Key accounts - sale report

LA, MH sale report
2018
2017

$1,000,997
$279,031
$1,209,527
$404,237
$1,750,588

2016

$1,336,742

Modern History

2016
$1,750,588

2017
$1,209,527

2018
$1,000,997

Lillian August

$1,336,742

$404,237

$279,031

(Source:RSC)
1.3 Problem identification
It is important to figure out the reasons for high rate of late shipment at Rochdale
Spears and its consequences. After examining many relevant literatures on shipping
late in manufacturing the potential antecedents that are believed to provide the most
understanding are: production capacity, production control, productivity, procurement,
process robustness, product delivery responsibilities, material inventory, subcontracting job, accident happens, sourcing of raw material, inferior quality in sourced
goods, product development and sampling…
In addition, the in-depth interview sessions are conducted from 3 main groups: sale
team, production team and purchasing team who are working and involving directly to
the production process. From each department we will find out the main reasons
causing for this delaying.
At the beginning we can easily seeing the 3 main outstanding reasons causing for late
of delivery on the company are: Lately delivery of material, delay from subcontractors
and production controlling. Those are the reason that we initially getting from the
interviewing, most of people realized that the company having high proportion of late
delivery, and the outstanding reasons that everyone can see that are: Lately delivery of
material, delay from subcontractors and production controlling.
Delay delivery of raw material from suppliers
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Normally, material controller will discuss directly with suppliers after receiving new
sale orders from sale team then informing lead time for factory planner. After that,
production lead time will be added with material lead time to have the confirmed ship
date, that is what sale team will base on to confirm with client and setting up the
agreed ship date.
Suppliers sometimes fail to send material on time due to many uncertainties. In that
case, shipping schedule cannot be kept as original confirmation.
―ABC manufacturing, one of our suppliers, delivered late, and that‘s why our products
is shipping late‖
The problem with the scenario outlined above is that if the order is shipping late that
most of the manufactures respond to their customers. Rochdale Spears also got that
case and we have to do so like the others have been doing.
Mr. Chau – Finishing manager in Rochdale Spears stated that:
Material is what affected to our production planning mostly, as finishing is the last step
before packing, without hardware such as shelf pins, levellers, handles…we cannot
complete the product and pack it. When any PO being stuck due to material, we have to pull
up the other ones to keep production continuing. Material is what out of our control, that
why there are the earlier shipments and late shipments.

According to the report from sale team, number of orders shipped late due to material
is occupied 31%, while the number for delayed orders from subcontractors is 19.7%,
the rest 49.3% of orders shipped late was caused by others reasons.
Delays from sub-contracting jobs
Nowadays, there are many of furniture makers have remained competitive by keeping
the tasks they do best in-house and leaving the rest to outside resources. More
specifically, the industry remains largely dependent on subcontractors, many of which
produce whitewood parts and components. This cuts down on the amount of work that
needs to be done in-house, allowing the manufacturers to focus on areas such as final
assembly and finishing to packaging and quality control.
Our Rochdale Spears is also doing so, they are letting the other small manufactures as

subcontractors doing other tasks such as white wood, resin…then the final tasks as
assembly and finishing to packing will be focussed doing in house. That means, our
schedule is affected if the subcontractors losing their management and supplying the
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components later than committed schedule. This situation is often happen and the
manufacturers have to find out solutions to avoid any delayed shipment and satisfied
their customers.
Mr. Chuong - Technicial manager in Plant 4 has stated that:
Much of subcontractors are showing very good performance in making sample, however,
until getting the actual production order, they cannot make it as what they did causing
quantity for sample is just only one, they pay all their attention to complete the sample as
soon as possible but don‘t care about the difficulties in mass production. That is the reason
why much of subcontractors have delayed their orders, even some of factories refused to
receive orders. In that case, our tech team have to study and find the ways as well as the
other suitable subcontractors.

Ms. Luong from planning team always complained that subcontractors usually
provided component lately, it affect too much to our production planning.
Subcontractors they don‘t pay attention to complete their orders on time. They always wait
for our pushing then they start to produce. As you can see from the current actual order for
AT176F01, purchasing confirmed that they will provide us the white wood on the week 48,
so we had confirmed with sale team that production can be completed on week 51.
However, until week 45 they had been starting their productions and getting trouble with
humidity, they delayed the order until week 50. In this case, our RSC finishing team having
only 1 week to complete finishing as well as packaging, this is unable. Although we had
charged back to the subcontractors for their late delivery but we also losing our performance
with our end client as well even this is not our failures.

In this case, we can see that late delivery can be caused by subcontractors due to
absence of planning at subcontractor factories
Poorly production controlling
Production control is the discipline that determines what needs to be built and when it
needs to be built in order to ship product on time. Doing so requires real planning
skills, the ability to work backward from a future point in time to determine what has
to happen and when it has to happen (Joseph H. Berk).
In RSC, central planning department is controlling for whole production from very
beginning until shipment. They are the persons who confirmed delivery schedule for
customer service staffs to confirm with client. Their responsibility is really important

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and affect too much to the shipping performance of the company. But it seems like
they are not controlling it well.
According to Ms. Van- Customer service staff in RSC has advised that:
The requirement for central planning department is that they should control and plan well
their shipping schedule. However, there are lots of orders have been being out of control,
until the customer service staff chasing for shipping, they come back for checking material
as well as other related departments to know how is it going now. Mr. Binh he is the
supervisor in planning department, but his duty is just checking and confirming schedule
for sale team, then how are production going is not related to him. While Ms. Luong, the
planner in Plant 1, she just checking schedule and status of material to see whether they
arrived on time or not whenever CS asking her‖

Central problems validations
From the above provided reasons causing for high rate of late delivery, everyone
agreed that we should find out the solution for solving as well as improve the shipping
performance. However, after having the deeper interviewing with other related

persons who working directly and involving to the process of production, we have
found that those above outstanding reasons just the symptoms of the important central
problems, this is Lack of collaboration between departments.
CENTRAL PROBLEMS: Lack of collaboration between departments
Collaborating in the workplace enables businesses to finish important projects and
meet crucial deadlines efficiently. With multiple individuals working on a project, the
work can be divided up equally and efficiently between those with the time and the
expertise to handle specific tasks. This also significantly reduces the project delivery
time. Often referred to as the divide and conquer strategy, it entails teaming up of
several individuals together, dividing up the tasks among them, and accomplishing the
project in relatively less time (Nut Cache).
In typical manufacturing organisations, functional units have their own goals. As there
is no single functional unit responsible for on-time delivery, in traditional
organisations on-time delivery has received minimal attention.
In order to have deeper understanding how collaboration between departments in our
company, we need to review the processing of an order to see how it is working:
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PROCESSING OF AN ORDER:
There are three main departments involving in the process of an order, they are Sale
department, purchasing department and production department.
The order is sent by customer to sale team then it will be checked all the detail
carefully such sale item code, price, quantity and requested ship date. If all
information is good enough it will be issued to production team and purchasing team
for arrangement. If not, sale team should resend it to customer for the correctly
revision.
Later, once the SO is issued, the purchasing team will check material schedule with
supplier and confirm back to central planning team for their scheduling and
production arrangement.

The schedule is setting up by balancing between factory capacity and customer‘s
requested ship date. After getting the confirmed ship date from CP, sale team should
check it to see whether it is met what customer requested or not and working with CP
to have the appropriated ship date as well as well arranging shipping plan.
After confirming with customer, the ship date that customer is recording should be
matched with what we are recording as this is the unify information we bas on to
calculate production lead time and evaluate shipping performance.
Central planning team and purchasing team, sale team should follow up production
closely to make sure that the order is shipping on time. If there is any change, the
customer should be informed. Sale team have to work with customer to get the
approval for the changing and unify solution that both of party can accept it.
The packing team is coordinated with sale team in building up and arranging loading
plan. It is arranged to be matched with the confirmed ship date, then sale team will
send the booking request to import-export team for booking the shipment.
Production team should be informed what has been booked and keep following up
production to be shipped on time.
This is an overview of the order process, it is required that all departments have to
complete their tasks well. If there is any step being stuck or not good completed, the
whole processing will be affected.

15


Figure 1: The process of an order:
CUSTOMER SENDING PO THROUGH
ITS SYSTEM OR VIA EMAIL

SALE TEAM: RECEIVE THE PO AND
CHECK IT CARE FULLY

NO

RECHECKING WITH CLIENT TO
REVISE THE PO CORRECTLY

YES

ISSUE SALE ORDER FOR MATERIAL
TEAM & CENTRAL PLANNING TEAM
FOR ARRANGEMENT

MATERIAL TEAM CONFIRM MATERIAL
SCHEDULLE

CENTRAL PLANNING CONFIRM
SHIPPING SCHEDULE FOR SALE TEAM

SALE TEAM RECHECKING IF THE
CONFIRMEED SHIP DATE IS MATCHED
WITH CUSTOMER REQUESTED DATE

NO

RECHECKING WITH CLIENT AND
CENTRAL PLANNING TO HAVE THE
AGREED SHIP DATE

YES
CONFIRM THE FINAL SHIP DATE TO
CLIENT

FOLLOW UP WITH PRODUCTION TO
ARRANGE SHIPMENT

INFOM TO CLIENT IF THERE IS ANY
CHANGE & GETTING THEIR APPROVAL
NO

YES

ARRANING SHIPMENT WITH PACKING
TEAM & IM-EX TEAM

CHECKING WITH PRODUCTION TO FIND
OUT SOLUTIONS

16


(Source: RSC)
The following provided information will provide us an overview of what are the main
tasks each department have to complete as well as showing what they are missing and
affected to the whole processing which caused for the late delivery.
PRODUCTION TEAM
Production team or central planning team (CP) is the department involving directly
and effect too much to production process as well as controlling production schedule.
They receiving production order from sale team, then confirming shipping schedule to
sale team by considering customer‘s requested ship date as well as according to the
material schedule, factory capacity and company‘s monthly target. Not only have
responsibilities in setting up schedule but also taking response in following up and

controlling production to be completed timely.
But, according to the results of interviewing, there are some ineffectually processes
that the team have made causing for the late delivery of products.
Confirming schedule: The request is that the factories have to process production
according to customer‘s request. However, RSC central planning team just paying
attention to the factory target and its own capacity. Despite whatever customer is
requesting, they base on the material lead time, then adding some weeks for
production to fill up and catching the factory output target for each month.
Mrs. Van from customer service department has shared that:
Many times I have to ask CP to pull up or push out the ship date as their confirmed ship date
is not what customer wants. However, the feedback from Mr. Binh- planning supervisor is
that: the factory is needed more output, output for that month, this month is not enough,
board of directors will complain us…Can you just confirm this ship date to customer, if they
have no feedback we will process according to this ship date. Of course we can negotiate
with client to have the appropriate ship date, but top of concerning we have to pay on
customer requirement.

Following up production: The requirement is that CP should follow up closely with
production in order to keep production running on scheduled and shipping on time.
However, it seems like that after confirming schedule to sale team, they let production
running without following up.
Ms. Lan Anh – customer service leader has shared that:
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Whenever customer service staff asking about status of any order to see whether it can be
shipped on time or to check a loading list of the upcoming shipment, late factory planner
always come back to check again with purchasing team about its material status as well as
other related production stages to see where are production now. Actually, they should now
and have this status on hand as they are the controller for it.

Ms. Tram from customer service department also shared that:
CP will not chase for material until CS chasing for the shipment as they think if CS team
keep silent and don‘t chase production team, meaning this order is not urgent, we can ship it
late.

Without following up and controlling production closely, the factory is always not
initiative to deal with troubles. Until the problems being happening, they start to solve
it while this is what usually happens in daily production.
Production planning: The factory has to arrange production according to schedule
which has been setting up can confirming with client.
However, in production team, in order to meet factory output target they have arrange
producing the easy time first to get their weekly and monthly target despite what ship
date this POs have been scheduled. So, the products already produced are unable to
ship as earlier than schedule while the needed items still have not finished. It causing
for the not on time of delivery.
Shipping arrangement:
Of course, packing team will arrange packing for the physical items despite what is its
ship date.
As the results, the loading plan has been built inappropriately, some items are sooner
and others are later schedule. The stick customer will not allow us for the earlier
shipment as it is affected to their warehouse management. It will take much of back
and forth emails to finalize the final shipping load plan, and the result is that we ship
order late.
SALE TEAM:
Confirming schedule: In order to confirm schedule to client, customer service staffs
who should know what customer want and what our company can afford them. Before
informing with client the factory confirmed ship date, CS should rechecking with CP
to know why we cannot meet their requested ship date, why it is sooner or later then
18

negotiate to have the best ship date and informing back to CP for the unified recording
and following up.
However, not everyone is doing it correctly. According to Ms. Anh-Customer service
leader, she has shared that:
I have to remind the team many times that be careful before confirming the ship date with
client, we need to check where it is reasonable and workable or not. It should meet customer
requested first and the loading ability is acceptable. Also, the record between our system and
customer system should be the same, later if there is any things happen, the evaluation is
clear and equally. But seem like they always forget to do that, just sending whatever CP
confirmed to them, or even don‘t send it. So, customer‘s record is on this date but we are
processing on another date. Finally, the result is that we have to air ship for the late POs or
keeping stock for the early one.

Building up shipping plan: In order to build the appropriate loading plan, CS team
should be take care once they receiving order and confirming the ship date for
customer as well. When they confirm ship date, have to make sure that the container is
being full and meeting customer‘s request ship date. If customer separate the POs in to
many different ship date but it cannot make a full container, we can explain with them
to have the combination. It will help us much to avoid the LCL shipment as well as
early or late shipment.
Same with what we have got from Ms. Anh, she said that her staffs just someone
checking and doing like that. Normally they just confirm with client whatever they got
from CP, don‘t care about the result, finally they have to face with the difficulties case
once arranging shipment.
Following up production status: The loading plan should be built according not only
to the ship date but also according to production status. It is required that the customer
service have to check and follow up with production team before they make it causing
in production, not 100% POs are running on time, so that we have to check to arrange

it reasonably.
However, most of CS does not checking it carefully before they build up their load plan and
sending the booking for IM-EX team. Finally, once the container come in, the actual
production is not matched with what they have booked, they have to change to loading list
and getting approval from customer again for the changing, sometimes it takes time for

19


getting confirmation from customer, the container cannot catch up the cut off time of the
vessel, that is the reason why we have to ship late-Ms An from packing team has shared.

PURCHASING AND OUTSOURCING TEAM:
Confirming material schedule: what should material team do is that they have to
negotiate with suppliers to have the best ship date which can meet customer‘s
requested ship date. This is required that purchasing team and production team, sale
team should be coordinated closely to know what and how should to do.
However, whenever receiving order request from sale team, they automatically sending to supplier for
ordering and confirming back to CP the schedule that they got from supplier without concerning
whether this schedule can afford customer‘s requested ship date or not- Ms. Tram from CS team has
shared like that.

Following up material status: Material schedule is affected directly to production
schedule, if there is any change in material arrival date, production ship date also
being changed accordingly. So, material team have to following up their order closely
and informing production team as well as sale team in time if there is any changing
with its schedule.
However, material team just checking with their suppliers whenever production team and sale team
chasing for any material which does not arrive on time as scheduled- Ms Anh from CS team has
shared like that.

Figure 2: Problem validation

20


Departments

Criteria

Confirming

ship

date

PRODUCTION
TEAM

Following
production
Production

up

Requirement

Failure

Problem validation

Balancing between:

Pay attention on:





Customer requested ship date



Factory output target

planning



Factory capacity



Material schedule

inappropriate schedule, Arrange to



Factory output target

produce inappropriate items.



Material schedule



knowledge

of

Setting

up

=>

Lack of following up in

Closely with production team & Not coordinate with sale team

production => Cannot control

material

production to be on time with

Coordinate with sale team

original schedule, Cannot control

According with confirmed schedule

planning

Priority doing for easy items to get materials/components to be arrived
on time => Materials/ components
output target

Shipping

According with confirmed schedule, Arrange the physical items, not arrived late, Production late

arrangement

meet customer‘s requests

following schedule

Balancing between:

NOT cooperate with production 

Confirming
schedule
SALE TEAM
Building
shipping plan

Following
production status
PURCHASING/

Poor

Confirming



Customer‘s

requested

ship team and customer to have the planning
appropriate & unified ship date

date

Poor

knowledge
=>

Confirming

inappropriate schedule, arrange to



Factory confirmed date

ship inappropriate items



Loading ability



up According to the agreed ship date & According to personal recording

Lack of following up in

production => Arrange to ship
inappropriate items

production status
up Closely with production team

of

Not closely with production team
and customer.

According to customer requested ship According to supplier‘s confirmed 

Poor

knowledge

of
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OUTSOURCING

material schedule

TEAM

date
Closely

Following
material status

up schedule

date
to

catch

up

production Not following up closely

planning

=>

Confirm

the

inappropriate material schedule


Lack of following up in

production

=>

Materials/

components arrived late

(Source: interview results)

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Figure 3: Initial cause effect map

Poor
knowledge
of planning

Setting up
inappropriate
schedule

Arrange to
ship
inappropriate
items

ORGANIZATIONAL
SYMPTEMS

Arrange to
produce
inappropriate
items

POTENTIAL
CENTRAL
POBLEMS

Late delivery
Lack of
collaboration
between
departments

Cannot control
production to be on
time with original

schedule

Production late

Lack of
following up
in production

Cannot control
materials/components
to be arrived on time

Materials/
components
arrived late

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1.4

Potential cause of problem and the justification

1.4.1 Lack of cross-functional knowledge
A cross-functional team is a group of people with different functional expertise
working toward a common goal. It may include people from finance, marketing,
operations, and human resources departments. Typically, it includes employees from
all levels of an organization. Members may also come from outside an organization
(in particular, from suppliers, key customers, or consultants).
Cross-functional teams often function as self-directed teams assigned to a specific task

which calls for the input and expertise of numerous departments. Assigning a task to a
team composed of multi-disciplinary individuals increases the level of creativity and
reduces groupthink. Each member offers an alternative perspective to the problem and
potential solution to the task. In business today, innovation is a leading competitive
advantage and cross-functional teams promote innovation through a creative
collaboration process. Members of a cross-functional team must be well versed in
multi-tasking as they are simultaneously responsible for their cross-functional team
duties as well as their normal day-to-day work tasks.
In order to build a cross-functional team, each members should prepare enough their
cross-functional knowledge. So that they are able to adapt with all the requirements or
any specific appointed tasks. The innovation idea should be required for raising- up
ideas when the organization is collecting as well as focusing on resolving any trouble
or trying to achieving any specific target.
However, as we have been known so far, in typical manufacturing organisations or in
Rochdale Spears Ltd, company in generally, functional units have their own goals. As
there is no single functional unit responsible for on-time delivery, in traditional
organisations on-time delivery has received minimal attention. While the sale team is
trying to serve customer by good service with 100% of shipments being shipped on
time, production team is trying to complete their weekly, monthly output target
despite of the shipment is on time or not, or whether it is what customer need or not.
The discrepancy between the departments has leaded the company to the results with
low shipping performance.
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1.4.2. Company’s service innovation strategy
The requirement for the company is that need to focus more on service and delivery of
good. Currently, the factory‘s just paying attention on developing new products with
new and fashionable designs, improve quality of products and trying all their best to
achieve the company output target. Without concerning on quality of service and

shipping performance, it has frustrated the customers by the too late shipment and we
are also losing some of our important customers due to the poor service.
The emerging importance of service innovation for manufacturing company cannot be
overlooked. It is clear that when products or services become more homogeneous
or an original competitive advantage cannot be sustained, service innovation
becomes an effective way for a company to accelerate its growth rate and profitability (Berry et al. 2006).
Most prior innovation literature has treated ―service innovation‖ as product (i.e.,
goods) innovation. However, beside the good and quality products, delivery service
play an important role in developing the growing of a company as well as it is the
chance connect customer with factory closely and closely. Without the good service
from company, how the products can be arrived on customer‘s hand.
1.4.3 Personality difference
Collaborations are not one-person shows, or a theater for the ambitious. They are a
mutually beneficial and well-defined relationship of two or more people or teams to
achieve common goals.
More often these days, collaborative efforts require new teams with different skill sets
to achieve a specific goal. Coming together for the first time, they will be unfamiliar
with their personalities and level of expertise. It may take time to resolve initial
teething problems.
All staffs in the company, they are not come from the same place, the same previous
company our experience in furniture speciality. An example, in the Customer service
department there are variety of people from variety of level and experience. Someone
come from garment industry, other is from logistic and other from furniture. We are
together working for the same goal and target that how can improve the company

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