CHAPTER I

INTRODUCTION

JNR is a metal fabrication owned by Mr. Nelson S. Rubia. It was

established on November 11, 2011. And it is located at Block 39, Rose Street

Barangay Fatima II, Dasmarinas, Cavite.

The company have 24 employees. Administrative staff in the company’s

area of responsibility is trained to work hand in hand with production and sales

people to contribute to the facilitation process of workflow and attain best result.

JNR fabricates stainless metals like propeller, cross joint, timon, ehi and

square head bolts.

JNR Metal Fabrication is committed to be a responsible business partner

to its principals and customers providing quality products to satisfy customer

requirements and has provided quality assurance in manufacturing and delivery

of the products.

BACKGROUND OF THE STUDY

JNR Metal Fabrication produces various types of boat propeller. The

commpany supply propellers in different places such as Manila, General Santos,

Romblon, Quezon, Pangasinan and Bicol.

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 The researcher discover the delivery system related problems

experienced by JNR Metal Fabrication and have focused on three problems

which are the no available drivers, insufficient delivery vehicle and the ineffective

labelling of boxes. These problems cause penalized delayed orders and

consequently result to customer dissatisfaction, opportunity loss and profit loss.

The focus of the study is the reason why these problems occur and the ways to

eliminate the average percentage of system related delays. The company gave

the necessary data on the completion of identification of the problem.

PROBLEM STATEMENT

JNR Metal Fabrication is experiencing a penalized delivery rate of

14.13% on the Delivery System amounting to Php 639,300 from the month of

March to August 2017.

OBJECTIVES OF THE STUDY

General Objective

To eliminate the 14.13% penalty rate of JNR Metal Fabrication on the

Delivery System for the months of March to August 2017.

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 Specific Objectives

 To eliminate the delays in the delivery of products

 To improve the performance of the company itself

 To accomplish the deliveries on time

SCOPE AND LIMITATION

The study at JNR Metal Fabrication, focused on the delivery system of the

company that targets small-time businesses like hardware and fishing

businesses. The researchers identified the problems in the delivery system which

include no available drivers, lack of maintenance of the delivery vehicles and the

ineffective labelling of boxes, all of which contribute to the reasons of penalized

orders from the months of March to August 2017.

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SIGNIFICANCE OF THE STUDY

To the Company

The study will help JNR Metal Fabrication understand and identify

the problems in the delivery system. A new perspective may put into the

management that would give them an idea on handling problem. The

organization can get new ideas as well that will help JNR in managing the

system better and plan for its future.

To the Researchers

The study will help the researchers to explore the different areas of

the company in order to use a proper procedure and management

principles. Since the researchers are new in this industry, it will bring

curiosity to their minds and the researchers will be immersed in real life

applications of the systems management.

To the Readers

To those who are not familiar with these types of research, a little

knowledge will be given to them. This would give them idea on how to

solve problems similar to this. This would also serve as a guide through

their researches.

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DESIGN AND METHODOLOGY

Observation

The researchers observed that the JNR Metal Fabrication is experiencing

some problems in the delivery system which causes the penalized delivery order

of the products. The researchers also gathered the six months data concerning

the problems of the company.

Interview

The researchers gathered their data and information from Nelson

S. Rubia, the owner. During the visit of the researchers, an interview was

conducted in order for the researchers to understand the delivery system

clearly. Some questions asked were:

1. What is the history of the company?

2. How many working hours and working days do you have?

3. What problems does the company usually encounter?

4. What are the reasons these problems occur?

5. What is the price per unit?

6. How many workers does the company have?

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DEFINITION OF TERMS

Propeller – a device with two or more blades that turn quickly and cause a ship

or aircraft to move.

System - is a set of connected things or parts forming a complex whole, in

particular.

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 CHAPTER II

TABLE 2.1 SUMMARY OF DELAYED ORDERS

MONTH TOTAL TOTAL TOTAL TOTAL DELAY

(2017) DELIVERY DELAYED AMOUNT AMOUNT PERCENTAGE
ORDERS DELIVERY OF OF (%)
ORDERS PENALTY PENALIZED
FEE DELIVERY
(PHP) ORDERS
(PHP)

March 168 24 5,150 123,600 14.28%

April 159 28 5,350 149,800 14.46%
May 174 23 4,050 93,150 13.21%
June 157 23 3,000 69,000 14.64%
July 172 25 3,950 98,750 14.53%
August 154 21 5,000 105,000 13.63%
TOTAL 984 144 639,300 84.75%
AVERAGE 14.13%
Source: Mr. Nelson S. Rubia, owner

Table 2.1 shows the summary of the penalized delivery orders. This

corresponds to the total amount of penalized delivery orders from the months of

March to August 2017.

Sample Computations:

PENALTY PERCENTAGE (%) = (Total delayed delivery orders/Total delivery

orders) x 100

Delay percentage (%) = (24/168) x 100 = 14.28%

TABLE 2.2 FREQUENCY OF SOURCES OF PROBLEMS

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 PROBLEMS FREQUENCY OF PERCENTAGE (%)

DELAYED DELIVERY

ORDERS (UNITS)
Insufficient number of 64 44.44%

delivery vehicle
Ineffective labelling of 57 39.58%

boxes
No available drivers 23 15.97%
TOTAL 144 100%

Table 2.2 shows the problems that the researchers experienced in the

delivery system of JNR Metal Fabrication.

Sample computations:

PERCENTAGE CONTRIBUTION (%) = (Frequency of delayed delivery

orders/Total frequency of delayed delivery orders) x 100

PERCENTAGE CONTRIBUTION (%) = (64/144) x 100 = 44.44%

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 DATA FOR INSUFFICIENT DELIVERY VEHICLE

FIGURE 2.2 Actual Delivery Vehicles

Figure 2.2 shows the delivery vehicles of the JNR Metal Fabrication.

TABLE 2.5 Frequency of Delay Due to Insufficient Delivery vehicle

MONTH FREQUENCY OF PENALIZED

DELIVERY ORDERS
March 3
April 5
May 4
June 3
July 3
August 5
Total 23

Table 2.5 shows the frequency of penalized delivery due to insufficient

delivery vehicle. It shows the units of penalized delivery orders due to insufficient

number of delivery vehicles.

TABLE 2.6 Existing Delivery Vehicle

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 VEHICLE PLATE YEAR STATUS

NAME NUMBER MODEL

Kia Besta WHM - 699 1999 2nd hand
L300 FB CJN – 192 2000 2nd hand

Table 2.7 shows the actual vehicles used in the delivery of products of

JNR Metal Fabrication

Some of their Clients NCR

Thomas hardware and fishing Sta. Cruz, Manila
supply corporation
New Standard Fishing Supply San Nicolas, Manila
Bayview Fishing Supply Tondo, Manila
IG Tronqued boats and allied San Juan City, Metro Manila
industries
Dinobilt Hardware Caloocan City, Metro Manila
Holden Hardware Sta. Cruz, Metro Manila

DATA FOR INEFFECTIVE LABELLING OF BOXES

FIGURE 2.1 Actual Labelled boxes

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 Figure 2.1 shows the method of the JNR Metal Fabrication on labelling

their delivery orders.

TABLE 2.4 Frequency of Delay Due to Ineffective labelling of boxes

MONTH FREQUENCY OF PENALIZED

DELIVERY ORDERS
March 9
April 11
May 8
June 10
July 9
August 10
Total 57

Table 2.4 shows the frequency of penalized delivery order due to

ineffective labelling of boxes. It shows the units of penalized delivery orders due

to the ineffective method of indicating the orders of the customers.

DATA FOR NO AVAILABLE DRIVERS

TABLE 2.1 Names of the Delivery Drivers in JNR Metal Fabrication

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 DRIVER NAME
Darwin Compo
Teodoro Lopez
Allan Trinidad

Table 2.1 shows the drivers concerned for the delivery of the propellers in

different areas.

Automobile Time need to leave the Actual Time

company
L300 7:10am 7:45am
Kia Besta 4:30pm 4:40pm
TABLE 2.2 SCHEDULE OF THE DELIVERY

Table 2.2 shows the time of vehicle to leave the company and the actual

time.

TABLE 2.3 Frequency of Delay Due to No Available Drivers

MONTH FREQUENCY OF PENALIZED

DELIVERY ORDERS
March 10
April 11
May 12
June 10
July 10
August 11

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 TOTAL 64

Table 2.3 shows the frequency of penalized delivery due to no available

drivers. It shows the units of penalized delivery orders due to the no scheduling

of drivers in the company.

FIGURE 2.3 FISHBONE DIAGRAM

JNR
METHOD
(100%) Metal

No available drivers Fabrication is

(15.97%)
experiencing
Insufficient number of 13
delivery vehicle 14.13%
(44.44%)
penalized
 Ineffective labelling of boxes
(39.58%)

Figure 2.3 shows the percentage contribution of each problem in the

delivery system of JNR Metal Fabrication.

FISHBONE ANALYSIS

Method

The system used by the company in the Delivery system contributes to the

delayed deliveries of the boxes. First is the no available drivers, the problem is

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that the drivers are not informed when it is his turn to deliver the products to the

clients.

Second one is the insuficient number of delivery vehicle. The delivery

vehicle that is being used by the company are not enough. As a result, the client

receives the product late.

Lastly is the ineffective labelling of boxes. The worker tapes a piece of paper,

with the name of the company, name of the customer, and the address of the

customer written on it, on the box. The paper that is taped on the box tends to

get removed by itself, causing the workers to look for the right box to be

delivered. It is also done manually by handwritting the details on the paper. As a

result, it contributes to the delay in delivering the boxes.

FIGURE 2.4 PROBLEM TREE

Causes

Ineffective
Insufficient labelling of
delivery vehicle No available
boxes drivers
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 To eliminate 14.13% penalty rate of JNR Metal Fabrication

on the Delivery System for the months of March to August 2017

Customer Opportunity Profit loss

Dissatisfaction loss

Effects

PROBLEM TREE ANALYSIS

CAUSES

1. INSUFFICIENT DELIVERY VEHICLE

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 The clients cancels their orders because the drivers does not follow the

time frame that the company provided. Yet, this is due to lack of delivery

vehicle that the JNR Metal Fabrication have.

2. INEFFECTIVE LABELLING OF BOXES

The company’s ineffective labelling of boxes could lead to mixed up

orders, workers looking for the right box to be delivered and wasted time in

handwritting the label on the paper that is to be taped on the box. This could

lead to customer’s dissatisfaction due to the delayed delivery of their orders.

3. NO AVAILABLE DRIVERS

The company has no scheduling of who is going to drive the different

vehicle. So the drivers are pin pointing who is going to drive or they are all

gone because they thought that it is not their turn to drive the truck.

EFFECTS

1. CUSTOMER DISSATISFACTION

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 The Company cannot fulfil the customer’s request will result to a

dissatisfied Customer. Having a poor condition of delivery vehicle and

delayed delivery of the customer’s order will result to bad reputation to the

customers and it will increase the opportunity loss.

2. OPPORTUNITY LOSS

Because of the time consumed on activities that were not part of

the standard process, the production will be affected resulting to a slower

production. Having a slow production will result into decreasing of

produced output by the workers thus increasing the opportunity loss.

3. PROFIT LOSS

Failure to maximize the opportunity of the company will result to

profit loss. This means that the potential profit of the company per month

is reduced because of the unsettled orders.

FIGURE 2.5 OBJECTIVE TREE

Means

Provide additional Implement the Provide a

vehicle for delivery use of stickers scheduling of
Drivers
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 To eliminate 14.13% penalty rate of JNR Metal Fabrication on the

Delivery System for the months of March to August 2017

Satisfied Opportunity Profit Gain

Customers Gain

Ends

OBJECTIVE TREE ANALYSIS

MEANS

1. Provide additional vehicle for delivery

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 The vehicles that the company used are not enough to make

deliveries to their customers on time. Having an additional delivery vehicle

will eliminate delays in the delivery. The capacity of the products that can

be deliver will increase. It can also maintain the quality of the product by

proper stocking of boxes.

2. Implement the use of stickers

By using stickers instead of papers, the company can eliminate the

risk of the label being torn or lost on the box and instead of handwritting the

details, stickers can be printed and can consume less time on labelling the

boxes. Thus will make the delivery become more efficient, effective, and

faster .

3. Provide a scheduling of Drivers

If they have schedule of who is going to drive, the drivers will know

that it is their turn so there will be no delay in their system.

ENDS

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1. Satisfied Customers

By fulfilling the customer’s demands, this will increase customer’s

lifetime value. Customers cost a lot of money to acquire. You and your

marketing team spend thousands of dollars getting the attention of

prospects, nurturing them into leads and closing them into sales.

2. Opportunity Gain

By successful settling of orders of the customers, the company

would be able to maintain a good relationship with the customers. Thus,

gaining opportunities for the future orders of customers.

3. Profit Gain

By improvement, it will increase the company’s credibility and the

company would be able to maximize their opportunity in gaining profit by

being able to accommodate orders and successfully processing it.

CHAPTER III

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 ALTERNATIVE COURSES OF ACTION

Alternative Course Action 1: Provide a scheduling of Drivers

Advantages:

 Improve Productivity

 No interruptions

 Increase in productivity

Disadvantages:

 Additional Cost to the company

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Alternative Course Action 2: Provide additional vehicle for delivery

The vehicles that the company used are not enough to make deliveries to

their customers on time so the company should provide additional vehicle for the

delivery of the product. Dissatisfied customers and penalties because of delays

can be avoided if they will have an additional vehicle, wherein this will help the

company to increase number of customers and will help avoid penalties because

of delays.

Advantages:

 Eliminate delays in delivery

 Increase number of customers

 No interruptions

 Increase the capacity

 Maintain the quality of the product

Disadvantages:

 Additional Cost to the company

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Table 3.2 Proposed delivery vehicle

Name Specifications Quotation

Color: White
Body Type: Commercial
Vehicle
Transmission Type: Manual
Engine Size: 2.5 L

Fuel Type: Diesel

Fuel Capacity: 55 L

Dimensions:

Length: 4,100 mm
Width: 1,695 mm

Height: 1,795 mm

Number of Doors: 3

Price: Php 620,000

Mitsubishi L300 Deluxe Cab Chassis
Source: AUTODEAL
2017

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 Color: White
Body Type: Van
Transmission Type: Manual
Engine Size: 3.0 L

Fuel Type: Diesel

Fuel Capacity: 70 L

Dimensions:

Length: 4,695 mm
Width: 1,695 mm

Height: 1,980 mm

Number of Doors: 5

Price: Php 1,346,000

Toyota Hiace Commuter 3.0 MT 2017 Source: AUTODEAL

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 Color: Black
Body Type: Pickup
Transmission Type: Manual
Engine Size: 2.4 L

Fuel Type: Diesel

Fuel Capacity: 80 L

Dimensions:

Length: 5,285 mm
Width: 1,800 mm

Height: 1,690 mm

Number of Doors: 2

Price: Php 798,000

TOYOTA Hilux 2.4 Cab & Chassis 4x2 Source: AUTODEAL

MT 2017

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Action Plan

Purchase Mitsubishi L300 Deluxe Cab Chassis

Color: White
Body Type: Commercial
Vehicle
Transmission Type: Manual
Engine Size: 2.5 L

Fuel Type: Diesel

Fuel Capacity: 55 L

Dimensions:

Length: 4,100 mm
Width: 1,695 mm

Height: 1,795 mm

Number of Doors: 3

Price: Php 620,000

Mitsubishi L300 Deluxe Cab Chassis Source: AUTODEAL

2017

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 COST BENEFIT ANALYSIS

BENEFITS
ACA COST
TANGIBLE INTANGIBLE
Units Affected = 23 units
ACA 1:
Proposed Gloves Price per roll = Php 2,200 -Improve safety of
Provide
(3 pairs) (296)(2,200) the workers
scheduling of
= Php 759.00 = Php 651,200.00 -Improvement in
drivers
Php 651,200 – Php 759 Job performance

=Php 650,441.00
-Increase number
Units Affected = 64 units
of customers
ACA 2: Price = Php 620,000
Proposed -Eliminate delays
Provide (64)(620,000)
Vehicle (1) in delivery
additional = Php 39,680,000
= Php 620,000 -Increase the
vehicle for Php 39,680,000 – Php
capacity
delivery 620,000
-Maintain the
= Php 39,060,000
quality

Units Affected = 57 units

Proposed Lifter -Easy to identify
ACA 3: Price per roll = Php 2,200
(2) differences
Provide (545)(2,200)
= Php 28,000 -Eliminate delays
Stickers for =Php 1,199,000
in delivery
labelling of Php 1,1199,000 – Php
-Increase
boxes? 28,000
productivity
= Php 1,171,000.00

CHAPTER IV
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 CONCLUSION AND RECOMMENDATION

Conclusion

Recommendation

After further research and analysis, the researchers would like to

recommend JNR Metal Fabrication to apply the alternative courses of actions,

thus ensuring that the 14.13% penalty rate on the delivery system will be

eliminated.

Through the information and data gathered, the first alternative course of

action which is to provide additional vehicle for delivery will be implemented, it

will eliminate 44.44% penalty rate. With the second alternative course of action,

provide scheduling of drivers, this will eliminate 15.97% penalty rate. Providing

stickers for labelling of boxes which is the proposed third alternative course of

action will be implemented, it can eliminate 39.58% penalty rate experienced in

JNR Metal Fabrication.

Chapter V

DETAILED PLAN OF ACTION

Figure 5.1 Gantt Chart

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 Week Week Week Week Week
ACTIVITY
1 2 3 4 5
The proposed alternatives will

be addressed and presented

to the Top Management

Approval of Proposal

Scheduling and Planning of

the Actions to be Done.

Budget all the cost that must

be anticipated

Dissemination of information

to employees.

Implementation of Alternative

Course of Action number 1.

Implementation of Alternative

Course of Action number 2.

Implementation of Alternative

Course of Action number 3

The actions will be monitored

to supplement its

implementation

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 Evaluation

1. The proposed alternatives will be addressed and presented to the

Top Management

The proposal of the recommended alternative courses of action will

be presented by the students to the Production Department.

2. Approval of Proposal

The Operations Manager and Head of Production Department will

review the proposal and look on the actions if it is necessary to the

company.

3. Scheduling and Planning of the Actions to be Done

Planning is the most important step to be made by the

management. The management will assess the date and time when to

start to implement the proposed alternatives.

4. Budget all the cost that must be anticipated

Budgeting of the costs needed for the proposed action is to be

considered in implementing the action.

5. Dissemination of information to employees.

It is the targeted distribution of information to employees.

Dissemination strategies aim to spread knowledge about the proposed

alternatives to the employees.

6. Implementation of the proposed alternatives

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 The proposed alternatives course of action should be strictly

followed after the approval of the administration. It starts within forming

and disseminating the changes made in the company, and the

implementation of the proposed ACA to the workers then the performance

and implementation.

7. The actions will be monitored to supplement its implementation

The Production supervisor/s and Line leader/s will monitor the

performance of the workers to ensure successful implementation of

alternative courses of action.

8. Evaluation

There will be an assessment to the effect of the action taken by the

Operations Manager and Head of the Production Department. There

must be a significant change after the action

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