BJMQ 3013 QUALITY MANAGEMENT (D)

A221 GROUP ASSIGNMENT 1

STATISTICAL PROCESS CONTROL (SPC)

PREPARED FOR:
PROF. MADYA DR. HENDRIK BIN LAMSALI

PREPARED BY:

NO. NAME MATRIC NO.

1 YEE XUE FUN 287655

2 ANIS NURIZZATI BINTI RUSLI 278819

3 PUTERI AINA NAJWA BINTI FAUZIRUMAZIR 284589

4 THAM JING WEN 286291

5 NUR AINA FATEHAH BINTI ROSLAN 287511

SUBMISSION DATE:
29th November 2022
 Table of Contents

1.0 Introduction (Puteri Aina Najwa Binti Fauzirumazir) ......................................... 1

2.0 Background of Company, SWOT of Company (Strengths, Weaknesses,

Opportunities, Threats) (Anis Nurizzati Binti Rusli) .................................................... 2

2.1 Strength .................................................................................................................. 3

2.2 Weakness ............................................................................................................... 3

2.3 Opportunity ............................................................................................................. 4

2.4 Threats ................................................................................................................... 4

3.0 Define and Analyze Quality Issues with Quality Tools ...................................... 5

3.1 Cause-and-Effect Diagram (Olivia).......................................................................... 5

3.2 Histogram (Yee Xue Fun) ....................................................................................... 9

3.2.1 Histogram of the Number of Parcels Delayed in the year 2021 .................................... 9

3.2.2 Histogram of the Number of Parcels Defects in the year 2021 ................................... 10

3.3 Control Chart (Yee Xue Fun)................................................................................. 11

3.3.1 Variable Data (Parcels Delayed) ............................................................................... 11

3.3.2 Attributes Data (Parcels Defects) .............................................................................. 14

4.0 Implementation (Nur Aina Fatehah Binti Roslan) ........................................... 16

5.0 Conclusion (Puteri Aina Najwa Binti Fauzirumazir) ........................................ 18

6.0 References ..................................................................................................... 19

7.0 Appendices........................................................................................................ i
1.0 Introduction

Statistical Process Control or known as SPC is an industry standard

methodology for control and quality during the manufacturing process. Quality data in
the form of process or product measurements are obtained in real time during
manufacturing. This data is then plotted on a graph with predetermined control limits.
Specification limits are determined by customer requirements while control limits are
determined by process capabilities.

Statistical process control or statistical quality control is the application of

statistical methods to control quality and monitor production processes. This helps
ensure the process operates efficiently, producing more product that conforms to
specifications with less waste.

SPC can also be used for any process where the output of a "conforming
product" the product meeting specifications can be measured. Control charts and
flowcharts are the main tools used in SPC that focus on experimental and continuous
design improvement. Among the examples of processes where SPC is used is the
manufacturing line.

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2.0 Background of Company, SWOT of Company (Strengths, Weaknesses,
Opportunities, Threats)

Shopee Express was first established around September, 2018. Now, Shopee
Express has been operating for about 4 years in providing delivery services for goods
ordered by customers online. Ivan Chew Kean Guan is the Head of Shopee Express.
A little background about Ivan Chew Kean Guan is that he has a high level of education
at one of the Universities abroad, namely the University of Nottingham majoring in
Chemical Engineering. Shopee Express is a service used by the well-known online
shopping platform Shopee.

Shopee Express is a Shopee Express Delivery Program which is an initiative

by the logistics fleet of one of the online shopping companies, Shopee. It is one of the
methods to provide the most reliable pickup and delivery service to customers or
buyers. This Shopee Express will be seen by buyers when they make a payment. It is
an option for delivery of goods ordered by the buyer. Currently, the Shopee Express
Delivery Program is only for deliveries weighing up to 30kg (actual or volumetric weight,
whichever is higher). It is subject only in Peninsular Malaysia.

Shopee Express is also one of the delivery companies for goods that are
ordered online by customers who use the cash on delivery (COD) method. This COD
method gives comfort to customers where they don't have to worry if the ordered items
don't arrive or are damaged. They are also satisfied with the method because it not
only makes it easier, but also guarantees the goods ordered.

Next, Shopee Express has Strengths, Weaknesses, Opportunities and Threats

(SWOT) where it analyzes some of the importance of making a successful delivery
company. Here is the SWOT of Shopee Express.

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 2.1 Strength

The strength of Shopee Express is to provide free delivery to customers or

buyers. Buyers can send goods for free up to 3kg in Peninsular Malaysia. However,
buyers must meet the minimum spend at each store and use the Free Shipping
Voucher at checkout to enjoy the free shipping provided.

In addition, the strength of Shopee Express is also Delivery of Orders without

Advance Payment. Customers can arrange to pick up packages with Shopee Express
at the Seller Center without paying an advance. This will make it easier and save for
customers in dealing with the Shopee Express company.

Next, customers can also Label for Automatic Delivery. This is said because
customers can print the delivery label from the Shopee Seller Center instead of using
a handwritten delivery label. For all orders that have already been sent using the
consignment note printed from the Shopee Seller Center will be automatically updated
on the Shopee App. In addition, the delivery status of all orders placed will be visible
directly from the Shopee App.

2.2 Weakness

The first drawback that often gets complaints from buyers or customers is Slow
Delivery. This is said to be so because buyers complain that the delivery company
from Shopee Express is sending parcels late or delaying the delivery of the customer's
goods. This also often happens because the service is said to be inefficient in making
deliveries. Lack of workers is also one of the slow delivery factors. This is because the
existing workers are not enough, causing them have to send goods to many places.

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 2.3 Opportunity

The Shopee Express company offers job opportunities to any individual who
wants to work under the company's management and services. This is because
Shopee Express is the main delivery service for the Shopee company and it requires
a large number of employees to overcome all the problems complained by customers
or buyers, namely the problem of slow delivery of goods. Therefore, Shopee Express
opens up opportunities for anyone who is interested in becoming a rider.

In addition, high availability (24 hours and seven days a week). Along with each
and every click of the mouse business is in operation. Those who are busy in day time
and cannot spare time for themselves, have all the opportunity to shop as per their
convenient time even during late night hours. Next is making advertising. Advertising
is cost effective compared to conventional offline systems.

2.4 Threats

Shopee Express has several threats faced by the company. Among them is
that they compete with several other delivery companies. For instance, J&T Express,
Ninja Van and so on. Shopee express is also labeled as a company that delivers
ordered goods slowly compared to the companies mentioned above. This is one of the
threats faced by Shopee Express. Last but not least is innovation. Customers
nowadays are always in search of innovative products and techniques. Innovation will
always work as an extra burden on the pocket of the consumer, be it in product, place,
promotion and even price.

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3.0 Define and Analyze Quality Issues with Quality Tools

3.1 Cause-and-Effect Diagram

Figure 3.1: Causes that Affect Shopee Express’s Image

Many businesses have switched to online sales as a result of the COVID-19

outbreak, selling through online marketplaces and then shipping their products to
clients. Additionally, courier services are becoming more and more crucial. Additionally,
there is a greater requirement for online shopping with delivery handled by courier
services. But as this sort of demand grows, so do customer reviews—both favourable
and negative—and if the online store operator fails to correctly organize the delivery,
it will receive a lot of bad feedback and damaged Shopee's reputation. The retailer will
also experience reputational harm, reimbursement, and a number of procedures
including resending a copy to the client. These two factors occur frequently and are
complained by customers, one of which is parcels defects, for example improper
handling, damage due to weather and not enough cushioning material. The other is
parcels delayed, such as delivery vehicle breakdown, spike in delivery volume and
processing time.

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PARCELS DEFECTS

Improper Handling

Damaged products are a huge pain point for merchants as they are usually out
of their control because most of the times it is the issue of the shipper or delivery
person. The management mechanism and service awareness of some express
companies are not in place. Furthermore, the parcel was damaged because of the
long logistics distance, substandard packaging safety and rough assembly and sorting.
Damage in transit is also high as products often have to be shipped to many locations.
Their package personnel also lack parcel experience, and while packing the things,
they assume there won't be any chance of damage. There are no inspectors, and
nobody is granted access to packaging expertise. Sometimes it's even because there
aren't enough packaging supplies for the packaging staff and the corporation wants to
save costs.

Due to Weather

Packaging staff employs packaging parcel that are extremely susceptible to

weather damage since they are not waterproof. For instance, even if the items are
loaded into the truck, it will still be raining when they are delivered to the client, which
would lower the product's quality and cause the parcel to rot. In Malaysia, row houses
make up the majority of homes. The courier can only place the parcel in the yard while
the owner is not present and the item will be harmed if raining weather. In addition,
slippery roads happen because of bad weather, which can lead to a van or motorcycle
accident and the parcels being damaged and dirty because of the accident.

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Not Enough Cushioning Material

Parcels may be damaged in transit. On its approach to the consumer, a

package travels through several hands, including first-mile service providers, air freight
crews, customs, and last-mile partners. As individuals move parcels from one shipping
step to the next, the parcels may damage during the delivery time. During transit, many
of these shipments rub against other boxes and packages, creating friction that can
damage the package or its contents. If the material isn't strong enough from all the
friction and handling, there's a chance for their parcels getting defects. To decrease
costs, some retailers would use less packing material such as bubble wrap, cardboard
inserts, or individually wrapping items, which is crucial for fragile items. Cushioning is
critical as too much space in the box can also cause the package to deform.

PARCELS DELAYED

Delivery Vehicle Breakdown

The customer's product is likely to be delayed if courier experience sudden

strong winds, severe rain, or flooding to avoid happening any accident. The delivery
of a customer's goods might always be delayed by inclement weather, whether it's due
to a lane closure or a traffic accident. Accidental vehicle failures can be one of the
reason of parcels delayed and it is unavoidable. It is becoming more and more people
share about experiencing of parcels delayed due to construction, accidents, significant
blockages, and detours. Car failures will frequently happen if the transport vehicles
are not consistently serviced.

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Spike in Delivery Volume

A sudden or unexpected increase in parcels volume can overload a courier

service that lacks the necessary software. This is most typical around holidays,
especially when shopping events like Double 11 and Double 12 are taking place. The
demand for delivery management software grows along with the increase in online
orders. Couriers are overwhelmed by the flood of online shopping orders and labor
shortages, not least because they lack efficient delivery network infrastructure. To
prevent customers from receiving mismatched items, retailers should clarify additional
details.

Processing Time

Delays resulting from processing, customers must make sure that all necessary
documentation are available and filled out for marine shipments in order to prevent
any problems. If the authorities decide to inspect your package, without the correct
documentation, delays are inevitable and can quickly become more of a problem.
Labels may be challenging to read and scan if the lettering is unclear owing to poor
print quality. The courier may give it back to the shipper to print a duplicate after
attempting to decode it, which takes a while. When there are several orders, retailers
must verify additional details to stop customers from receiving mismatched items.

8
 3.2 Histogram

3.2.1 Histogram of the Number of Parcels Delayed in the year 2021

Table 3.2.1: Number of Parcels Delayed in year 2021 by Months

Months Frequency (‘000)
January 10
February 11
March 11
April 13
May 10
June 11
July 12
August 10
September 13
October 14
November 16
December 14
Total 145

Figure 3.2.1: Histogram of the Number of Parcels Delayed in year 2021

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 3.2.2 Histogram of the Number of Parcels Defects in the year 2021

Table 3.2.2: Number of Parcels Defects in year 2021 by Months

Months Frequency (‘000)
January 13
February 17
March 21
April 37
May 14
June 13
July 24
August 12
September 35
October 20
November 47
December 44
Total 297

Figure 3.2.2: Histogram of the Number of Parcels Defects in year 2021

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 3.3 Control Chart

3.3.1 Variable Data (Parcels Delayed)

Table 3.3.1: Number of Parcels Delayed in year 2021 by Ten Samples

Observations
X-Bar Chart R Chart
(times)
Sample 1 2 3 4 X-Bar R LCL CL UCL LCL CL UCL
1 3 2 2 1 2 2 0.437 2.7 4.963 0 3.1 7.068
2 1 2 2 3 2 2 0.437 2.7 4.963 0 3.1 7.068
3 3 1 3 5 3 4 0.437 2.7 4.963 0 3.1 7.068
4 1 1 4 2 2 3 0.437 2.7 4.963 0 3.1 7.068
5 1 4 2 1 2 3 0.437 2.7 4.963 0 3.1 7.068
6 3 1 5 3 3 4 0.437 2.7 4.963 0 3.1 7.068
7 3 3 1 1 2 2 0.437 2.7 4.963 0 3.1 7.068
8 3 5 1 3 3 4 0.437 2.7 4.963 0 3.1 7.068
9 4 5 6 5 5 2 0.437 2.7 4.963 0 3.1 7.068
10 3 6 2 1 3 5 0.437 2.7 4.963 0 3.1 7.068
Total 27 31

Calculation：

E.g. 1st Sample

3+2+2+1
𝑥̅ = 4

=2

R = Maximum number – Minimum number

=3–1

=2

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𝑨𝟐 = 0.73

𝑫𝟑 = 0

𝑫𝟒 = 2.28

X-Bar Chart R Chart

CL = 𝑥̅̅ CL = 𝑅̅
= 27 ÷ 10 = 31 ÷ 10
= 2.7 = 3.1

UCL = 𝑥̅̅ + 𝐴2 𝑅̅ UCL = 𝐷4 𝑅̅

= 2.7 + 0.73 (3.1) = 2.28 (3.1)
= 4.963 = 7.068

LCL = 𝑥̅̅ + 𝐴2 𝑅̅ LCL = 𝐷3 𝑅̅

= 2.7 - 0.73 (3.1) = 0 (3.1)
= 0.437 =0

X-Bar Chart
6

5
Parcel Delayed (times)

5 UCL

3 3 3 3 3
Mean
2 2 2 2 2 2

1
LCL
0
1 2 3 4 5 6 7 8 9 10
Samples

X-bar LCL CL UCL

Figure 3.3.1.1: X-Bar Chart of the Number of Parcels Delayed in year 2021 by Ten Samples

12
 R Chart
8

7 UCL
Parcel Delayed (times)

5 5

4 4 4 4

3 3 3 Mean

2 2 2 2 2

0 LCL
1 2 3 4 5 6 7 8 9 10
Sample

R LCL CL UCL

Figure 3.3.1.2: R Chart of the Number of Parcels Delayed in year 2021 by Ten Samples

Interpreting patterns of control chart for variable data

Figure 3.3.1.1 and figure 3.3.1.2 shows a X-Bar Chart and R Chart of the
number of parcels delayed in year 2021 by ten samples respectively. The X-Bar chart
is a type of process chart that is used to track the average of the characteristic being
monitored while the R Chart is used to examine the process's dispersion. For the X-
Bar Chart, the process is out of control while the process of R chart is said to be in
control. The R Chart is in control because the averages and ranges are within the
control limits which is 5 times. When a process is "in control," it signifies that it is steady
and predictable. However, in the 9th sample of X-Bar Chart, the times of parcel
delayed (5 times) is higher than average number of parcels delayed per times which
is 4.98 times. Therefore, we need to determine the underlying cause of the specific
variation and control it before it going more worse

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 3.3.2 Attributes Data (Parcels Defects)

Table 3.3.2: Number of Parcels Defects in year 2021 by Months

Number of Parcels Defects
Months C-Bar UCL LCL
('000)
January 13 24.75 39.6748 9.8252
February 17 24.75 39.6748 9.8252
March 21 24.75 39.6748 9.8252
April 37 24.75 39.6748 9.8252
May 14 24.75 39.6748 9.8252
June 13 24.75 39.6748 9.8252
July 24 24.75 39.6748 9.8252
August 12 24.75 39.6748 9.8252
September 35 24.75 39.6748 9.8252
October 20 24.75 39.6748 9.8252
November 47 24.75 39.6748 9.8252
December 44 24.75 39.6748 9.8252
Total 297

Calculation：

297
𝑐̅ = 12

= 24.75

UCL = 𝐶̅ + 3 √𝑐̅

= 24.75 + 3 √24.75

= 39.6748

LCL = 𝐶̅ − 3 √𝑐̅

= 24.75 - 3 √24.75

= 9.8252

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 C-Chart
50
Number of Parcel Defects ('000)

47
45 44
40 UCL
37
35 35
30
25 24 Mean
20 21 20
17
15 14
13 13 12
10 LCL
5
0

Months

Number of Parcel Defects ('000) c-bar UCL LCL

Figure 3.3.2: C- Chart of the Number of Parcels Defects in year 2021 by Months

Interpreting patterns of control chat for attribute data

Figure 3.3.2 shows a C-Chart of the number of parcels defects in year 2021 by
months. The C-Chart is used to detect non-random events in a production line. Based
on the C-Chart above, the average number of parcels defects per month is 24.75
thousand. On the other hand, the number of parcels defects in November and
December are outside of the control limit. Therefore, the process is out of control, we
need to determine the underlying cause of the specific variation and control it by make
sure the number of parcels defects is under control which is below upper control limit
(39.7 thousand).

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4.0 Implementation

Figure 3.1 shows a Cause-and-Effect diagram prepared for Shopee Express

that was experiencing problems with the image of their brand. The Cause-and-Effect
diagram shows that two major areas of concern which are parcels defects and parcels
delayed. Here is a solution and implementation plan for Shopee Express to address
the issues.

PARCELS DEFECTS

Improper Handling

Improper handling because the workers hired do not have the skills to handle
packages such as making sure the tape used is really strong to wrap the package. To
solve this problem, Shopee Express needs to provide proper training to the employees
to ensure they know how to pack the customer's packages correctly. Proper and safe
packaging is very important because the goods purchased by customers consist of
fragile items and not only items that are light and easy to handle. In order to keep
Shopee Express’s image strong, they need to train their employees.

Due to Weather

Parcels defects due to the weather because of the use of packaging materials
such as boxes or cardboards that are easily wet and damaged when exposed to rain.
To solve this problem, non-absorbent packing materials should be used by Shopee
Express to make sure the parcels in good condition without damage. For example,
use waterproof packaging will preserve the boxes and item inside. Therefore, using
non-absorbent packing materials can help improve Shopee Express’s image.

Not Enough Cushioning Material

Parcels defects happens due to every package did not used or filled enough
with fillers such as airbags. For that reason, to solve this problem, Shopee Express
can use other materials as fillers such as crumpled paper or foam fillers for products
that are not easily broken to ensure that the cushion material provided is sufficient for
each parcel. It is clear that the use of other materials as fillers can ensure that the
cushioning material is sufficient and helps strengthen the company's image.

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PARCELS DELAYED

Delivery Vehicle Breakdown

Parcels being delayed because of delivery vehicle breakdown. This is because

of the lack of attention to ensure that the vehicle used to deliver the package is in good
condition and safe to use. Shopee Express needs to ensure that the vehicles used for
package delivery are regularly serviced. Besides that, by doing regularly serviced can
also guarantee the safety of the employees. It is emphasized here that the service
frequency for Shopee Express vehicles is important to improve the company’s image.

Spike in Delivery Volume

Parcels being delayed is the spike in delivery volume. This is due to Shopee
Express wanting to dominate the courier service. Shopee Express can split the
number of packages that each courier will deliver evenly to overcome this problem. It
is emphasized here that a spike in delivery volume is the cause of the parcel being
delayed that affects the image of Shopee Express.

Processing Time

Processing time affect parcels being delayed. This happens because the
application used is no longer efficient. Therefore, Shopee Express must update their
application and use the latest technology to ensure this problem does not happen
again. It is clear that processing time is the cause of the parcel being delayed which
affects the image of Shopee Express.

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5.0 Conclusion

In conclusion, Shopee is the leading e-commerce platform in Southeast Asia

and Taiwan. It is a platform tailored for the region, providing customers with a
convenient, secure and fast online shopping experience through strong support and
logistics support. In this assignment, we have done the research of the causes and
effect of parcels defects and also parcels delays. In 2021, the number of parcels
delayed was increased from January and started to decrease at the end of December
2021. For parcels defects from January 2021 until April it increased but started May
decreased back and changed back and not static and at the end of December it
decreased which was 44 number of parcel defects. But, Shopee Express believes in
technology transformation and wants to change the world for the better by providing a
platform to connect buyers and sellers in one community. As shopping on mobile
devices becomes the new norm, Shopee aims to continue to improve its platform to
provide a smooth and pleasant shopping experience for all users and become the e-
commerce platform of choice in the region.

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6.0 References

Hessing, T. (2014, April 25). X bar R control charts. Six Sigma Study Guide.
https://sixsigmastudyguide.com/x-bar-r-control-charts/
Hessing, T. (2020, December 22). Attribute chart: C chart. Six Sigma Study Guide.
https://sixsigmastudyguide.com/attribute-chart-c-chart/
LinkedIn, December 16, 2022, Ivan Chew Kean Guan - Head of Shopee Express-
LinkedIn, https://my.linkedin.com/in/ivan-chew-kean-guan-16a99715

Lopienski, K. K. L. (2020, January 15). Shipping damage: How ecommerce companies

can prevent it. ShipBob. https://www.shipbob.com/blog/prevent-shipping-
damages/

Wikipedia, November 12, 2022, Statistical Process Control. Retrieved from

https://en.wikipedia.org/wiki/Statistical_process_control

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7.0 Appendices

Picture 1: Logo of Shopee Express

Picture 2: Logistics Provider of Shopee Express