Eureka Case 25 min Operations

The Vendalia Letter

You are Nubia Arbeláez Quintero, founder and manager of Confecciones Hilvarda, a 30-person garment workshop in Bogotá's Restrepo district. From January, your largest customer will renew only with ISO 9001-certified suppliers. On Monday at eight you sit down with the consultant to decide how July begins.

The situation

Hilvarda sews polo shirts, corporate uniforms and basic sportswear. It sells about COP 1,800 million a year, earns about 180 million of operating profit and carries fixed costs of about COP 85 million a month. The retail chain Vendalia buys half its output under a private-label contract worth COP 900 million a year. Its letter arrived on Friday, July 2, 2027: from January 1, 2028, no ISO 9001:2015 certificate, no renewal. At least three Bogotá workshops are already certified and quote Vendalia 5% to 8% less.

You have six months and a budget of COP 250 million, from cash and a bank loan; whatever you do not spend stays with the company. The programme has four phases: a baseline in July, a gap analysis in August and September, implementation in October and November, and the audit in December, when the certifier's COP 40 million fee also falls due. In each phase you decide three things: what to pay the consultant (0 to 80 million), how many hours of training each of the 30 employees gets (0 to 40, at about 0.5 million per hour for the whole plant) and how deeply to document: minimal, standard or comprehensive, at 5, 15 or 30 million.

The diagnosis from the consultant, Andrés Lozano, is blunt: the quality management system is 5% ready, only 15% of the staff follow defined procedures and can show it, documentation is 5% written and the risk of failing certification is 80%. The specification of each garment lives in the notebooks of the most senior operators. Lozano has sent his proposal: COP 80 million for July. Wilson Patiño, your production head, wants to know how many hours you will take off the machines. And Ofelia Garzón, fifteen years in the workshop, stopped you on Saturday at the cutting-room door: "Doña Nubia, are you going to make us fill in forms now?"

Your job in this case: look at what is at stake and what each lever costs, work out what each July plan leaves for the three phases after it, and decide what you put in front of Lozano on Monday at eight.

The decision

What July plan do you put in front of Lozano?

  • A · Lozano's full proposal: COP 80 million
  • B · Train the floor: 20 hours for everyone
  • C · Write it all down: full documentation

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