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Customers also expressed dissatisfaction with the company's boot department. As a result, many cost centers must be reconsidered in order to determine their efficiency and how it affects output quality. Perhaps the output level has deteriorated, which may explain the high number of consumer grievances and declining returns traffic. As a result, outlining the primary cost centers would be extremely beneficial in determining the source of the current crisis. Presentation of this information in affinity diagrams is important because it would help in making informed decisions to reverse the declining stream of returns and re-establish positive feedback from customers by redressing their grievances (Jiao & Chen, 2015).
The following diagram shows cost centers in the boot division of the shoe manufacturing company. Some items and services that cost the company have been highlighted.
Cost Centers in the Boot Division
Raw Material Inventory
Transport or materials
Training of staff
Power e.g Electricity
Processing and machinery
Finished goods Inventory
Packaging and delivery
Salaries and wages
Research and Development
In conclusion, Management costs, labour costs, production costs, utility costs, material costs and manufacturing costs form the basic cost centres whose operations could have led to customer complaints and problematic returns. In this regard, it calls for proper administration and management of resources to ensure that such costs are minimized while maximizing quality and foster customer satisfaction. The affinity diagram is therefore a significant tool that would greatly help the management team to organize and group their recommendations and come up with comprehensive and effective solutions.
Jiao, J., & Chen, C. H. (2015). Customer requirement management in product development: a review of research issues. Concurrent Engineering, 14(3), 173-185.
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