In each chapter of this book, we use a database for a fictitiouscompany, Performance Lawn Equipment (PLE), within a case exercisefor applying the tools and techniques introduced in the chapter.33To put the database in perspective, we first provide somebackground about the company, so that the applications of businessanalytic tools will be more meaningful.
33 The case scenario was based on Gateway Estate Lawn EquipmentCo. Case Study, used for the 1997 Malcolm Baldrige National QualityAward Examiner Training course. This material is in the publicdomain. The database, however, was developed by the author.
PLE, headquartered in St. Louis, Missouri, is a privately owneddesigner and producer of traditional lawn mowers used byhomeowners. In the past 10 years, PLE has added another keyproduct, a medium-size diesel power lawn tractor with front andrear power takeoffs, Class I three-point hitches, four-wheel drive,power steering, and full hydraulics. This equipment is builtprimarily for a niche market consisting of large estates, includinggolf and country clubs, resorts, private estates, city parks, largecommercial complexes, lawn care service providers, privatehomeowners with five or more acres, and government (federal, state,and local) parks, building complexes, and military bases. PLEprovides most of the products to dealerships, which, in turn, selldirectly to end users. PLE employs 1,660 people worldwide. Abouthalf the workforce is based in St. Louis; the remainder is splitamong their manufacturing plants.
In the United States, the focus of sales is on the easternseaboard, California, the Southeast, and the south central states,which have the greatest concentration of customers. Outside theUnited States, PLE’s sales include a European market, a growingSouth American market, and developing markets in the Pacific Rimand China. The market is cyclical, but the different products andregions balance some of this, with just less than 30% of totalsales in the spring and summer (in the United States), about 25% inthe fall, and about 20% in the winter. Annual sales areapproximately $180 million.
Both end users and dealers have been established as importantcustomers for PLE. Collection and analysis of end-user data showedthat satisfaction with the products depends on high quality, easyattachment/dismount of implements, low maintenance, price value,and service. For dealers, key requirements are high quality, partsand feature availability, rapid restock, discounts, and timelinessof support.
PLE has several key suppliers: Mitsitsiu, Inc., the sole sourceof all diesel engines; LANTO Axles, Inc., which provides tractoraxles; Schorst Fabrication, which provides subassemblies;Cuberillo, Inc, supplier of transmissions; and Specialty Machining,Inc., a supplier of precision machine parts.
To help manage the company, PLE managers have developed a“balanced scorecard” of measures. These data, which are summarizedshortly, are stored in the form of a Microsoft Excel workbook(Performance Lawn Equipment) accompanying this book. The databasecontains various measures captured on a monthly or quarterly basisand used by various managers to evaluate business performance. Datafor each of the key measures are stored in a separate worksheet. Asummary of these worksheets is given next:
Dealer Satisfaction, measured on a scale of 1–5 (1 = poor, 2 =less than average, 3 = average, 4 = above average, and 5 =excellent). Each year, dealers in each region are surveyed abouttheir overall satisfaction with PLE. The worksheet contains summarydata from surveys for the past 5 years.
End-User Satisfaction, measured on the same scale as dealers.Each year, 100 users from each region are surveyed. The worksheetcontains summary data for the past 5 years.
2014 Customer Survey, results from a survey for customer ratingsof specific attributes of PLE tractors: quality, ease of use,price, and service on the same 1–5 scale. This sheet contains 200observations of customer ratings.
Complaints, which shows the number of complaints registered byall customers each month in each of PLE’s five regions (NorthAmerica, South America, Europe, the Pacific, and China).
Mower Unit Sales and Tractor Unit Sales, which provide sales byproduct by region on a monthly basis. Unit sales for each regionare aggregated to obtain world sales figures.
Industry Mower Total Sales and Industry Tractor Total Sales,which list the number of units sold by all producers by region.
Unit Production Costs, which provides monthly accountingestimates of the variable cost per unit for manufacturing tractorsand mowers over the past 5 years.
Operating and Interest Expenses, which provides monthlyadministrative, depreciation, and interest expenses at thecorporate level.
On-Time Delivery, which provides the number of deliveries madeeach month from each of PLE’s major suppliers, number on time, andthe percent on time.
Defects After Delivery, which shows the number of defects insupplier-provided material found in all shipments received fromsuppliers.
Time to Pay Suppliers, which provides measurements in days fromthe time the invoice is received until payment is sent.
Response Time, which gives samples of the times taken by PLEcustomer-service personnel to respond to service calls by quarterover the past 2 years.
Employee Satisfaction, which provides data for the past 4 yearsof internal surveys of employees to determine their overallsatisfaction with their jobs, using the same scale used forcustomers. Employees are surveyed quarterly, and results arestratified by employee category: design and production, managerial,and sales/administrative support.
In addition to these business measures, the PLE databasecontains worksheets with data from special studies:
Engines, which lists 50 samples of the time required to producea lawn-mower blade using a new technology.
Transmission Costs, which provides the results of 30 sampleseach for the current process used to produce tractor transmissionsand two proposed new processes.
Blade Weight, which provides samples of mower-blade weights toevaluate the consistency of the production process.
Mower Test, which lists test results of mower functionalperformance after assembly for 30 samples of 100 units each.
Employee Retention, data from a study of employee duration(length of hire) with PLE. The 40 subjects were identified byreviewing hires from 10 years prior and identifying those who wereinvolved in managerial positions (either hired into management orpromoted into management) at some time in this 10-year period.
Shipping Cost, which gives the unit shipping cost for mowers andtractors from existing and proposed plants for asupply-chain-design study.
Fixed Cost, which lists the fixed cost to expand existing plantsor build new facilities, also as part of the supply-chain-designstudy.
Purchasing Survey, which provides data obtained from athird-party survey of purchasing managers of customers ofPerformance Lawn Care.
Elizabeth Burke has recently joined the PLE management team tooversee production operations. She has reviewed the types of datathat the company collects and has assigned you the responsibilityto be her chief analyst in the coming weeks. To prepare for thistask, you have decided to review each worksheet and determinewhether the data were gathered from internal sources, externalsources, or have been generated from special studies. Also, youneed to know whether the measures are categorical, ordinal,interval, or ratio. Prepare a report summarizing thecharacteristics of the metrics used in each worksheet.
