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Lovell Levelers, Inc. is a major provider of specialized parts

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Question;Lovell Levelers, Inc. is a major provider of specialized partsfor the automotive industry. LLI?s biggest customer, Specific Motorswas not a delighted customer this month. In fact, lastMonday, the executive vice president of Specific Motors headquarters,Phyllis Kendall was diverted from a return trip from Singaporeto drop in unexpectedly at the LLI plant. There was nothingroutine about this visit. She made it explicitly clear thatSpecific Motors was disappointed with the level of quality relativeto the leveler plates. In particular, she was disappointed with thecurrent average of rejects at the rate of 1,350 defects per millionopportunities (DPMO) at a cost of poor quality of just over $256,000per quarter. She said the industry standard is less than 50 DPMO andif we do not get the level of quality to the industry standard (as aminimum) within the next six months, LLI should not expectto keep the business next year.

 

Paper#61343 | Written in 05-Mar-2016

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