Shift Synchronization Process Improvement at VTR Global Com SA

Posted on May 7, 2024 in Economy

INSTRUCTIONS:

1. Select a task or process performed collaboratively with colleagues.

2. Write a description of the task as you understand it. Ask at least 50% of the individuals involved in the task to do the same (individually).

3. Create two flowcharts: one depicting the actual process and another illustrating the ideal process for you and your colleagues. (Use Excel, Word, or PowerPoint.) These flowcharts will serve as a visual guide to understand the chosen process.

4. Review all the descriptions that were developed.

5. Identify the discrepancies.

6. Gather the involved individuals to discuss and reach a consensus on the differences.

7. Based on the agreements, document the process.

8. Include at least the following sections in the document as defined in topic 3.5 of “Information Systems for Quality”: Objective, Scope, Responsibilities, Tools and Materials, Operational Procedures, and Annexes.

9. Develop a procedure outlining the operation, specifying who, how, when, and with what resources.

10. Designate individuals responsible for reviewing and approving the document.

DEVELOPMENT WORK

1. VTR Global Com SA

The company’s market presence is detailed in the “Information Systems for Quality” paper from the Catholic University of the North.

– Company Name: VTR GlobalCom

– Website: www.vtr.com (international) or www.vtr.cl (Chile)

– Sector: Telecommunications Industry, Cable TV, Internet Service

– Size: Large-scale business within Chile, organized into four zonal operations: North (regions I to IV), Central (regions V and VI), South (regions VII to XI), and Metropolitan. Serves a total of 49 cities across the country.

– Background: The company has been operating in Chile since 1928. In the early 2000s, VTR embarked on a five-year business plan involving a $400 million investment. The plan aimed to leverage VTR’s HFC (hybrid fiber-coaxial) network to deliver integrated video, voice, and data services. In December 2001, VTR consolidated its Cable Television, Telephone, and Broadband Internet operations under the subsidiary VTR Banda Ancha SA. Over the past five years, VTR has doubled its sales and subscriber base, reaching one million customers. Today, the company leads the Chilean Cable Television and Broadband Internet market and holds a strong position as the second-largest local phone company with a significant presence in the residential market. In April 2005, VTR merged with Metropolis Intercom SA (Metropolis), further solidifying its leadership in Broadband services in Chile.

The primary issue identified at VTR’s warehouse is inventory shortages, resulting in an inability to fulfill orders, leading to delays and associated losses. This ultimately translates into costs for the company, both in terms of inventory and brand image.

These shortages stem from uncoordinated shifts between the NSC (National Distribution Center) and the teams responsible for pickups and deliveries. Misalignment between these groups often leads to order delays as warehouse staff arrive to find the NSC closed.

2. Perspectives on the Issue

Mauricio Palma: Head of Operations and Supervisors

To ensure a consistent flow of equipment to meet sales demand and returns from commercial branches and external sales points (Dealers), these locations are supplied with an average of 120 DBox units weekly. The range varies from 4 units per week for low-volume branches to 300 units for branches with the highest sales. The lack of coordination in shifts at the NSC (National Distribution Center) creates disruptions in the supply cycle to these dependencies.

Luis Veas: Assistant Manager, Storage and Distribution

The existing shift schedules at the storage warehouse do not align with those of the CDN, leading to gaps in deliveries from the warehouse and reception at the CRC. This results in an inability to fulfill orders, causing delays and potential losses, ultimately impacting the company’s costs.

Rodrigo Norambuena: Head of CDN (National Distribution Center)

When an order is placed, for example, for modems used in Broadband Internet installations for individuals, the quantity is estimated based on the previous month’s orders. This method is often inefficient, as demand frequently exceeds the available inventory. To address this, emergency orders are placed (with associated costs), typically exceeding the overdue demand. Consequently, an excess of equipment remains, increasing inventory maintenance costs. This situation is recurring. The shift misalignment between the CRC and the Warehousing and Distribution warehouse further disrupts the system.

3. Process Analysis

CURRENT PROCESS

IDEAL PROCESS

4. Proposed Solution

PREPARATION

Upon receiving equipment requests from the operations center, the Deputy Manager verifies the storage inventory to determine if it can meet the demand.

If sufficient stock is unavailable, the NSC will be responsible for supplying the required units. The NSC will fulfill the demand requested by the storage warehouse, ensuring complete synchronization between the two departments’ shifts, thereby creating a smooth sourcing process.

5. Expected Outcomes

SETTLEMENT

This process is expected to significantly improve the efficiency of receiving requested equipment to meet demands.

Synchronizing shift schedules for operators in both departments will lead to improved delivery times, preventing equipment shortages and delays in deliveries required by the operations center. This will eliminate excess inventory, dramatically enhancing the equipment distribution process.

6. Agreement and Benefits

AGREEMENT

The agreement involves synchronizing the shift operations of the National Distribution Center and the Warehousing and Distribution warehouse. Additional staffing will be implemented to cover missing shifts and generate emergency shifts.

The justification for this staffing increase is that it will not exceed the costs incurred due to the inventory shortages discussed earlier.

Mr. Rodrigo Norambuena (Head of CDN) emphasized that the additional staff will expedite the distribution process and potentially enable 24/7 emergency coverage.

Mr. Mauricio Palma (Head of Operations and Supervisors) noted that this measure will adequately address the demand generated by over 300 locations across Chile, reducing delays, complaints, and claims from clients requesting repairs or equipment provided by VTR.

Mr. Luis Vera (Assistant Manager, Storage and Distribution) added that equipment distribution times within the country will be optimized, preventing delays in shipments to other regions and ensuring efficiency and effectiveness in the involved processes.

LOGISTICS AREA

CODE: 3245100
VERSION: 4.5

REVISION DATE: 15 OCTOBER 2008

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SHIFT SYNCHRONIZATION

TABLE OF CONTENTS

1. OBJECTIVES
2. SCOPE
3. RESPONSIBILITIES
4. TOOLS AND MATERIALS
5. OPERATIONAL PROCEDURES
6. ANNEXES

1. OBJECTIVES:

The objective is to address inventory shortages, which result in an inability to fulfill orders, leading to delays and associated losses that ultimately impact the company’s costs. These shortages originate from uncoordinated shifts between the CRC (warehouse) and the teams responsible for pickups and deliveries. Misalignment between these groups often leads to order delays as warehouse staff arrive to find the NSC closed.

2. SCOPE:

The scope involves recruiting additional staff to meet the demands placed on the supply center. This will not increase operating costs but rather enhance efficiency and effectiveness in the process. The cost of implementing additional personnel will be lower than the losses caused by inventory shortages.

3. RESPONSIBILITIES:

Mauricio Palma: Head of Operations and Supervisors

Responsible for managing equipment orders and meeting the demands of over 300 VTR outlets across the country.

Luis Veas: Assistant Manager, Storage and Distribution

Responsible for managing equipment inventory to meet the demands of the hub.

Rodrigo Norambuena: Head of CDN (National Distribution Center)

Responsible for distributing equipment requested by the National Storage and Distribution warehouses.

4. TOOLS AND MATERIALS:

Commodities: Fiber optics, cable, satellite antennas, Internet installation equipment, television programming boxes, among others.

5. OPERATIONAL PROCEDURES

Synchronize the shift operations of the National Distribution Center and the Warehousing and Distribution warehouse. Implement additional staffing to cover missing shifts and generate emergency shifts.

6. ANNEXES:

1. VTR MANAGERIAL ORGANIZATION

2. VTR OPERATIONAL AREAS

3. CAUSE-EFFECT DIAGRAM (ISHIKAWA)

4. PRODUCTS AFFECTED BY INVENTORY SHORTAGES

D-BOX

CABLE MODEM

OTHER

5. HISTOGRAM OF CLAIMS

7. GANTT CHART

PROCEDURES

WHO:

HEAD OF OPERATIONS: MAURICIO PALMA

Manage equipment orders and meet the demands of over 300 outlets throughout the VTR country.

HOW:

Synchronize the shift operations of the National Distribution Center and the Warehousing and Distribution warehouse.

WHEN:

Implementation will begin as per the Gantt chart (Annex 7) between December 2008 and February 2009.

WITH WHAT:

Recruit additional personnel to cover missing shifts and generate emergency shifts.

Reviewers:

REFERENCES

– Universidad Catolica del Norte Paper “Information Systems for Quality” Author: Marta Cofré Rodriguez, Co-author: Ruben Gonzalez Recabarren.

– Schroeder, Roger G; Operations Management: Decision Making in the Operations Function. Third Edition, 1999. Editorial McGraw & Hill.

– Project Authorization: Luis Fernando Veas Stuardo, Deputy Manager of Warehousing and Distribution.