BUSI 338 Week 4 New Venture Project Phase 2 Presentation Example

Phase 2: Purchasing, Parts Inventory and Quality Control in a Repair Van

Slide 1: Phase 2: Purchasing, Inventory and Quality Control

• Inside the van: what we buy, stock and check
• Factor covered: operations
• New Venture Project, Phase 2

Speaker notes: Phase 1 set up the business legally and ethically. This phase covers what happens inside the van: which parts the business buys and from whom, how much of each it carries, and how every repair is checked before the bicycle goes back to its rider. The decisions rest on a log of the first 60 repairs from the soft launch with two workplace partners, which is the best market research a service business can have.

Slide 2: The Constraint: A Van Is Not a Store

• Storefront shops stock thousands of parts and accessories
• The van holds about 120 stock items on its shelves
• Every slot must earn its place

Speaker notes: The four storefront shops in the area carry deep inventories, from tubes to complete wheelsets, and can usually finish any repair from stock. The van cannot. Its shelving holds roughly 120 different items. If the wrong parts fill those slots, a rider waits for a second visit, which defeats the purpose of a mobile service. Byrd and Megginson (2018) note that inventory is money sitting on a shelf, and in a van it is also space that cannot be added.

Slide 3: What 60 Repairs Used

• 41 of 60 jobs used inner tubes or tires
• 33 used brake pads or cables
• 22 used a chain; 9 used a cassette or freewheel
• 7 needed parts the van did not carry

Speaker notes: The job log recorded every part used in the soft launch. Tubes, tires, brake parts and chains appeared again and again. Cassettes, freewheels and bottom brackets appeared less often but cost more. Seven jobs needed a part the van did not have, mostly unusual sizes on older bicycles, and each required a second visit. Those seven second trips cost about three hours of labor and fuel, which is what the inventory plan must reduce.

Slide 4: ABC Groups

• A: chains, cassettes, brake sets (few items, most money)
• B: tires, common tubes, cables (moderate)
• C: small hardware, ferrules, valve caps (many items, little money)

Speaker notes: Sorting parts by the money they tie up and how often they are used gives three groups. The A group is a small number of items that represent most of the inventory value, so it is counted weekly and ordered carefully. The B group is checked every two weeks. The C group is cheap, so the van simply carries plenty of it; running out of a ten-cent ferrule should never cancel a repair.

Slide 5: Reorder Points for A and B Items

• Reorder point = daily use x lead time + safety stock
• Example: chains, 0.8 a day x 3 days + 3 = about 6
• Weekly order to the distributor every Monday

Speaker notes: For a chain, the log shows about four used each week, or 0.8 a working day. The distributor delivers in about three working days. Safety stock of three chains covers a busy week. So when the van is down to six chains, the next order includes more. Gaur et al. (2005) studied publicly listed U.S. retailers and found that inventory turnover varied widely between firms and was linked to gross margin, capital intensity and sales surprises. For a small van, faster turnover means less cash locked up and fresher stock, which is why the reorder points are kept low.

Slide 6: Choosing Suppliers

• Primary: a national bicycle parts distributor, about 3-day delivery
• Backup: a regional distributor for brands the first lacks
• Avoid: online retail for stock, slow and inconsistent

Speaker notes: Byrd and Megginson (2018) describe purchasing as getting the right item, in the right quantity, at the right time and price. For this business, time matters as much as price. A national distributor with an account for licensed shops offers wholesale prices and delivery within about three days. A second distributor covers brands the first does not carry. Buying stock from online retailers was rejected because delivery times vary and the business needs predictable restocking.

Slide 7: Special Orders Without a Second Trip

• Unusual parts: photographed and ordered during the first visit
• Rider pays a deposit; part ships to the rider's home
• Install on the next scheduled route nearby

Speaker notes: The van will never carry every part, so the plan handles the rest. When the log's seven unusual cases recur, the mechanic photographs the old part, orders the replacement on the spot and takes a deposit. The part ships directly to the rider, and the installation is scheduled on the next day the van is already in that neighborhood. This turns a wasted second trip into a planned stop on an existing route.

Slide 8: The Five-Step Quality Check

• Brakes: lever feel and stopping test
• Drivetrain: shifts through every gear
• Wheels: true, tight, inflated to rating
• Bolts: torqued to spec
• Test ride and signed checklist

Speaker notes: Every bicycle leaves the van with a signed five-step checklist taped to the handlebar. The steps cover the systems that keep a rider safe. According to Jesus, the person who can be trusted with very little can be trusted with much (English Standard Version Bible, 2001/2016, Luke 16:10). The bolt nobody sees is the one that decides whether the rider trusts the next repair. The checklist makes that standard part of the routine rather than something left to a busy afternoon.

Slide 9: How Riders Judge Quality

• Reliability: the repair works and lasts
• Responsiveness, assurance, empathy, tangibles
• Reliability matters most to customers

Speaker notes: Berry et al. (1988) summarized their research on service quality in five dimensions customers use to judge a service, and reported that reliability, doing what was promised correctly the first time, was the one customers rated most important. For this business, that means a repair that holds is worth more than a friendly visit. The checklist protects reliability; arriving on time and explaining the work protect the other four dimensions.

Slide 10: Tracking Quality Over Time

• Comeback rate: repairs redone within 30 days
• Target: under 3 percent of jobs
• Every comeback reviewed for its cause

Speaker notes: Quality control needs a number. The business will track comebacks, any bicycle that needs the same repair redone within 30 days. The target is fewer than three comebacks per hundred jobs. Each comeback is reviewed to find whether the cause was a part, a skipped step or a misdiagnosis, and the checklist or stock list is adjusted. Comebacks are fixed free, which keeps the incentive to get it right the first time with the business.

Slide 11: References

Speaker notes: The phase draws on the textbook, two journal articles, on inventory turnover and on service quality, and one passage of Scripture, listed in APA format below.

References

Berry, L. L., Parasuraman, A., & Zeithaml, V. A. (1988). The service-quality puzzle. Business Horizons, 31(5), 35-43. https://doi.org/10.1016/0007-6813(88)90053-5

Byrd, M. J., & Megginson, L. C. (2018). Small business management: An entrepreneur's guidebook (8th ed.). McGraw-Hill Education.

English Standard Version Bible. (2016). Crossway. (Original work published 2001)

Gaur, V., Fisher, M. L., & Raman, A. (2005). An econometric analysis of inventory turnover performance in retail services. Management Science, 51(2), 181-194. https://doi.org/10.1287/mnsc.1040.0298