Process Control at Polaroid (A)

Harvard Business School Case #693-047

Case Software #XLS-292

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Exhibit 1 Polaroid Recent Financial Results ($ millions)

Income Statement 1980 1981 1982 1983 1984

Sales
United States 791.8 817.8 752.5 730.1 743.5
International 659.0 601.8 541.4 524.4 528.0
Net Sales 1450.8 1419.6 1293.9 1254.5 1271.5
Cost of Goods Sold 831.1 855.4 769.6 698.3 735.2
S, G & A 483.9 520.8 472.6 462.1 492.6
Income from Operations 135.8 43.4 51.7 94.1 43.7
Interest Income 24.0 46.1 43.8 32.4 37.3
Other Income 1.4 3.1 1.7 0.1 2.2
Interest Expense 17.0 29.9 35.5 26.5 20.9
Pre-tax Earnings 144.2 62.7 61.7 100.1 62.3
Taxes 58.8 31.6 38.2 50.4 36.6
Net Earnings 85.4 31.1 23.5 49.7 25.7
Earnings per Share $1.30 $0.47 $0.37 $0.80 $0.42

Balance Sheet 1980 1981 1982 1983 1984

Current Assets 1041.8 1101.8 1041.8 1042.1 1039.4
Net Property, Plant, & Equip. 362.2 332.9 281.8 277.0 306.6
Total Assets 1404.0 1434.7 1323.6 1319.1 1346.0
Current Liabilities 319.9 352.3 296.4 273.1 305.2
Long Term Debt 124.1 124.2 124.3 124.4 124.5
Shareholder's Equity 960.0 958.2 902.9 921.6 916.3
Total Liability & Equity 1404.0 1434.7 1323.6 1319.1 1346.0
Exhibit 3 Base-line Data for Pod Weight and Finger Height

Pod Weight
(grams) Sample Number DATE (JULY)
Day 1 2 3 4 5 6 X bar (Mean)
20 July 2.792 2.810 2.777 2.799 2.803 2.788 X double bar (Sample Mean)
21 July 2.774 2.783 2.799 2.820 2.812 2.807 UCL
22 July 2.797 2.790 2.785 2.795 2.866 2.826 LCL
23 July 2.819 2.787 2.809 2.862 2.823 2.816
24 July 2.754 2.793 2.820 2.846 2.823 2.807
27 July 2.784 2.781 2.733 2.801 2.823 2.844 DATE (JULY)
28 July 2.844 2.799 2.781 2.802 2.820 2.813 R (Range)
29 July 2.806 2.786 2.836 2.815 2.836 2.808 R bar (Sample Rangr)
30 July 2.843 2.766 2.795 2.778 2.835 2.783 UCL
31 July 2.816 2.790 2.823 2.802 2.780 2.804 LCL

Finger Height (mm)

Sample Number DATE (JULY)
Day 1 2 3 4 5 6 X bar (Mean)
20 July 2.021 2.158 2.049 1.959 2.107 1.875 X double bar (Sample Mean)
21 July 1.836 2.256 2.099 2.269 2.193 2.193 UCL
22 July 2.004 2.166 1.955 2.125 1.988 2.009 LCL
23 July 2.177 2.171 2.068 2.143 1.979 2.278
24 July 2.167 2.032 2.032 1.955 2.018 2.007 DATE (JULY)
27 July 2.016 2.108 2.105 2.037 1.957 1.881 R (Range)
28 July 1.939 2.302 2.019 2.154 2.104 1.830 R (Sample Range)
29 July 2.179 2.189 1.970 2.067 2.088 1.903 UCL
30 July 1.962 2.128 1.976 2.228 2.036 1.949 LCL
31 July 2.260 1.990 1.863 2.183 2.020 1.889
 20 21 22 23 24 27 28 29 30
2.794833 2.799167 2.809833 2.819333 2.807167 2.794333 2.809833 2.8145 2.8
2.80515
2.837559 2.837559 2.837559 2.837559 2.837559 2.837559 2.837559 2.837559 2.837559
2.772741 2.772741 2.772741 2.772741 2.772741 2.772741 2.772741 2.772741 2.772741

20 21 22 23 24 27 28 29 30
0.033 0.046 0.081 0.075 0.092 0.111 0.063 0.05 0.077
0.0671
0.134468 0.134468 0.134468 0.134468 0.134468 0.134468 0.134468 0.134468 0.134468
0 0 0 0 0 0 0 0 0

20 21 22 23 24 27 28 29 30
2.028167 2.141 2.041167 2.136 2.035167 2.017333 2.058 2.066 2.0465
2.06035
2.210032 2.210032 2.210032 2.210032 2.210032 2.210032 2.210032 2.210032 2.210032
1.910668 1.910668 1.910668 1.910668 1.910668 1.910668 1.910668 1.910668 1.910668

20 21 22 23 24 27 28 29 30
0.283 0.433 0.211 0.299 0.212 0.227 0.472 0.286 0.279
0.3099
0.62104 0.62104 0.62104 0.62104 0.62104 0.62104 0.62104 0.62104 0.62104
0 0 0 0 0 0 0 0 0
 POD WEIGHT X BAR (MEAN) PO
2.85
31 0.16
2.84
2.8025 0.14
2.83
2.82 0.12
2.837559 2.81
2.772741 UCL 0.1
2.8
2.79 LCL 0.08
2.78 DATE
(JULY) 0.06
31 2.77
0.043 0.04
2.76
2.75 0.02
0.134468 2.74 0
0 1 2 3 4 5 6 7 8 9 10 1 2 3

31
2.034 FINGER WEIGHT X BAR (MEAN) FING
2.25 0.7
2.210032 2.2
0.6
1.910668 2.15
2.1 0.5
31
0.397 2.05 UCL 0.4
2 LCL
0.62104 DATE 0.3
1.95 (JULY)
0
1.9 0.2
1.85
0.1
1.8
1.75 0
1 2 3 4 5 6 7 8 9 10 1 2 3
 POD WEIGHT R CHART (RANGE)
0.16
0.14
0.12
0.1 UCL
0.08 LCL
DATE
0.06 (JULY)
0.04
0.02
0
1 2 3 4 5 6 7 8 9 10

FINGER WEIGHT R CHART (RANGE)

0.7

0.6

0.5

0.4 UC
L
LCL
0.3
R
0.2

0.1

0
1 2 3 4 5 6 7 8 9 10
Exhibit 6 Sample Statistical Process Control Measurements

Pod Weight
(grams) Sample Number: DATE (AUGUST)
Day Shift 1 2 3 4 5 6 3
3 August A 2.800 2.799 2.760 2.802 2.805 2.803 4
B 2.750 2.820 2.850 2.740 2.850 2.790 5
C 2.768 2.807 2.807 2.804 2.804 2.803 6
7
4 August A 2.841 2.802 2.802 2.806 2.807 2.807 10
B 2.801 2.770 2.833 2.770 2.840 2.741 11
C 2.778 2.807 2.804 2.804 2.803 2.804 12
13
5 August A 2.760 2.804 2.804 2.806 2.805 2.806 14
B 2.829 2.804 2.805 2.806 2.807 2.807 17
C 2.741 2.850 2.744 2.766 2.767 2.808 18
19
6 August A 2.814 2.804 2.803 2.805 2.807 2.804 20
B 2.787 2.802 2.805 2.804 2.805 2.804 21
C 2.766 2.805 2.804 2.802 2.804 2.806
2.830
7 August A 2.774 2.801 2.805 2.805 2.805 2.804
B 2.770 2.801 2.833 2.770 2.840 2.741 2.820
C 2.832 2.836 2.794 2.843 2.813 2.743
2.810

10 August A 2.829 2.846 2.760 2.854 2.817 2.805 2.800

B 2.850 2.804 2.805 2.806 2.807 2.807
C 2.803 2.803 2.773 2.837 2.808 2.808 2.790

2.780
11 August A 2.815 2.804 2.803 2.804 2.803 2.802
B 2.782 2.806 2.806 2.804 2.803 2.802 2.770
C 2.779 2.807 2.808 2.803 2.803 2.803
2.760
12 August A 2.815 2.815 2.803 2.864 2.834 2.803 2.750
B 2.846 2.854 2.760 2.829 2.817 2.805 1 2 3 4 5 6 7 8 9 10
C 2.767 2.804 2.834 2.803 2.803 2.803

13 August A 2.850 2.804 2.804 2.804 2.804 2.804

B 2.810 2.820 2.814 2.794 2.798 2.787
C 2.850 2.820 2.750 2.740 2.850 2.790

14 August A 2.750 2.765 2.850 2.760 2.790 2.840

B 2.830 2.770 2.848 2.760 2.750 2.830
C 2.740 2.770 2.833 2.770 2.840 2.800

17 August A 2.753 2.807 2.805 2.804 2.802 2.804

B 2.851 2.751 2.752 2.773 2.849 2.806
 C 2.845 2.804 2.803 2.806 2.805 2.806

18 August A 2.844 2.777 2.754 2.791 2.833 2.811

B 2.806 2.839 2.805 2.804 2.850 2.740
C 2.849 2.801 2.804 2.762 2.814 2.791

19 August A 2.820 2.793 2.812 2.833 2.853 2.812

B 2.790 2.780 2.764 2.843 2.843 2.818
C 2.850 2.806 2.805 2.814 2.807 2.807

20 August A 2.767 2.831 2.808 2.793 2.836 2.811

B 2.833 2.825 2.793 2.813 2.823 2.766
C 2.824 2.799 2.790 2.764 2.817 2.805

21 August A 2.778 2.775 2.799 2.805 2.833 2.772

B 2.801 2.832 2.758 2.759 2.773 2.814
C 2.770 2.787 2.744 2.766 2.807 2.803

Finger Height
Sample Number:
Day Shift 1 2 3 4 5 6 DATE (AUGUST)
3 August A 1.90 1.95 1.94 2.00 2.05 2.16 3
B 2.15 2.17 2.11 2.13 2.02 2.03 4
C 1.73 1.90 2.07 1.89 1.76 1.88 5
6
4 August A 2.30 2.41 2.54 2.37 2.32 2.16 7
B 2.28 2.16 2.19 2.08 2.25 2.24 10
C 1.92 2.24 2.11 1.89 1.88 2.17 11
12
5 August A 2.39 2.28 2.10 2.36 2.54 2.25 13
B 2.11 2.21 2.24 2.21 2.17 2.24 14
C 1.89 1.90 1.73 2.07 1.89 1.76 17
18
6 August A 2.51 2.25 2.08 2.35 2.29 2.32 19
B 2.22 2.19 2.22 2.24 2.01 2.23 20
C 1.89 1.90 1.78 2.07 1.89 1.76 21

7 August A 1.95 2.07 2.25 1.95 2.11 2.16

B 2.08 2.03 2.27 2.23 2.24 2.13
2.500
C 2.31 1.90 1.86 1.91 1.89 1.87

10 August A 2.23 2.25 2.21 1.89 2.15 2.11 2.000

B 2.23 2.21 2.05 2.19 2.07 2.16
C 1.73 2.00 1.79 1.75 1.84 1.74
1.500

11 August A 2.21 2.11 2.21 2.44 2.17 2.30

B 2.17 2.19 2.15 2.04 2.07 2.22 1.000
C 2.01 1.90 1.90 1.81 2.06 1.89

0.500

0.000
1 2 3 4 5 6 7 8 9 10
 1.500

1.000

12 August A 2.08 2.19 2.28 2.29 2.21 2.45 0.500

B 1.93 2.09 1.90 1.95 2.04 2.09
C 1.84 2.12 1.90 1.89 2.01 1.75
0.000
1 2 3 4 5 6 7 8 9 10
13 August A 2.23 2.01 2.25 2.11 2.39 2.15
B 2.19 2.22 2.18 2.15 2.23 2.04
C 1.96 2.05 2.16 1.87 2.13 1.90

14 August A 2.27 2.00 2.06 1.97 2.13 2.05

B 1.92 1.78 1.76 1.77 1.78 1.87
C 1.78 1.65 2.04 1.63 1.75 1.83

17 August A 2.31 2.35 2.25 1.99 2.27 2.11

B 2.02 1.97 1.81 1.73 1.77 1.82
C 1.76 1.91 2.01 1.85 1.78 1.64

18 August A 2.06 2.14 1.91 2.06 2.08 2.09

B 1.76 1.83 1.79 1.79 1.77 1.94
C 2.25 1.88 2.11 2.18 2.02 1.86

19 August A 2.28 2.15 2.17 2.18 2.44 2.00

B 2.31 2.27 2.16 2.10 2.24 2.28
C 1.87 1.89 2.03 1.69 1.75 2.04

20 August A 2.16 2.38 2.20 2.25 1.98 2.23

B 2.06 2.08 2.14 2.24 2.26 2.18
C 1.80 1.71 1.65 1.68 1.96 2.05

21 August A 1.75 2.00 2.04 2.00 2.15 2.06

B 1.90 1.90 1.81 1.86 1.98 1.81
C 1.80 2.01 1.73 1.89 2.01 1.91
 MEAN PODS RANGE PODS
SHIFT A SHIFT B SHIFT C DATE (AUGUST) SHIFT A SHIFT B SHIFT C
2.795 2.800 2.799 3 0.045 0.110 0.039
2.811 2.793 2.800 4 0.039 0.039 0.039
2.798 2.810 2.779 5 0.046 0.025 0.109
2.806 2.801 2.798 6 0.011 0.018 0.040
2.799 2.793 2.810 7 0.031 0.099 0.100
2.819 2.813 2.805 10 0.094 0.094 0.029
2.805 2.801 2.801 11 0.013 0.024 0.029
2.822 2.819 2.802 12 0.061 0.087 0.067
2.812 2.804 2.800 13 0.046 0.033 0.110
2.793 2.798 2.792 14 0.100 0.098 0.100
2.796 2.797 2.812 17 0.054 0.100 0.042
2.802 2.807 2.804 18 0.090 0.110 0.087
2.821 2.806 2.815 19 0.060 0.079 0.045
2.808 2.809 2.800 20 0.069 0.067 0.060
2.794 2.790 2.780 21 0.061 0.074 0.063

0 0.120

0
0.100
0
0.080
0
SHIFT
0 A 0.060
SHIFT
0 B
0.040
0
0.020
0

0 0.000
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 1 2 3 4 5 6 7 8 9 10 11
 MEAN FINGER RANGE FINGER
SHIFT A SHIFT B SHIFT C DATE (AUGUST) SHIFT A SHIFT B SHIFT C
2.000 2.102 1.872 3 0.260 0.15 0.34
2.350 2.200 2.035 4 0.380 0.200 0.360
2.320 2.197 1.873 5 0.440 0.130 0.340
2.300 2.185 1.882 6 0.430 0.230 0.310
2.082 2.163 1.957 7 0.300 0.240 0.450
2.140 2.152 1.808 10 0.360 0.180 0.270
2.240 2.140 1.928 11 0.330 0.180 0.250
2.250 2.000 1.918 12 0.370 0.190 0.370
2.190 2.168 2.012 13 0.380 0.360 0.290
2.080 1.813 1.780 14 0.300 0.160 0.410
2.213 1.853 1.825 17 0.360 0.290 0.370
2.057 1.813 2.050 18 0.230 0.180 0.390
2.203 2.227 1.878 19 0.440 0.210 0.350
2.200 2.160 1.808 20 0.400 0.200 0.400
2.000 1.877 1.892 21 0.400 0.170 0.280

0.50
0.45
0.40
0.35

SHIFT 0.30
A
0.25
SHIFT
B 0.20
0.15
0.10
0.05
0.00
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 1 2 3 4 5 6 7 8 9 10 11
 0.35

SHIFT 0.30
A
0.25
SHIFT
B 0.20
0.15
0.10
0.05
0.00
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 1 2 3 4 5 6 7 8 9 10 11
 SHIFT
A
SHIFT
B

4 5 6 7 8 9 10 11 12 13 14 15
 SHIFT
A
SHIFT
B

4 5 6 7 8 9 10 11 12 13 14 15
 SHIFT
A
SHIFT
B

4 5 6 7 8 9 10 11 12 13 14 15