CASE STUDY

POSIE
CASE HISTORY:
Posie is a large business which manufactures furniture. It is made up of two autonomous
divisions in Deeland. The manufacturing division purchases raw materials from external
suppliers, and performs all manufacturing and packaging operations. All sales are made through
the retail division which has 95 retail stores in Deeland, as well as through Posie’s own well-
developed website. Posie has retail operations in eight other countries as well as in Deeland.
These overseas businesses operate as independent subsidiaries within the Retail Division, each
with their own IT and accounting functions. The furniture is sold in boxes for customers to
assemble themselves. About 10% of the products sold by Posie are purchased already packaged
from other manufacturers. All deliveries are outsourced through a third party distribution
company.
ISSUES AT HAND:
When purchases are kept exclusively by overseas administrators, they do not concentrate
enough on fixing factors why products are returned, and hence do raise the rates of returns.
And after Posie carries out the test to determine the root causes of consumer returns, this data
is exchanged and track the knowledge.

FACTS:
Each process explores the underlying causes of the issues. Of instance, to evaluate consumer
returns by product category, by country of sale or for a better understanding of what
"defective" implies additional detail might be required. By doing so, Posie can identify business
areas where customer returns are especially high and can therefore focus on these.
To avoid users overloading with so much data, Posie will ensure that it produces output data to
an acceptable standard of information. The details included in the new board monitoring kit
could be too comprehensive for board level analysis so it may be adequate enough to include
basic statistics on the total returns on revenue. Centers of accountability require even further
information, likely down to the point of the commodity or manufacturing line.

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ALTERNATIVES:
Overseas subsidiaries are generally designated to act as benefit centers, where all revenue and
expense management are kept responsible. Because they are not generating, designating them
as income centers is fair. While these executives will be liable for the sales because the bulk of
products produced are bought by the production sector, as they have little to little influence
about the prices.
Consequently, the output data produced by the IT systems of Posie 's subsidiaries should
concentrate more on sales rather than expense. We might well be able to adjust sales rates as
shopping centers. Posie will insure that the subsidiaries provide resources to track the effect on
multiple selling approaches and that intelligence gleaned from the external market is accessible
to the management of these subsidiaries. In price decisions, it will be necessary to determine
sustainable pricing strategies.
RECOMMENDATIONS:
At this point it is important to incorporate the recommendations on process change and to
analyze carefully the availability of capital and the potential costs of progress. Posie may have
to understand facets of the manufacturing or packaging phase , for example, through better
system management or configuration. Further staff training may be possible be necessary, too.
Continuous tracking can show a need to update some of the earliest steps in the DMAIC
method.

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