Globase Guatemala: Outside-of-the-Box Process Improvement
May 19, 2014
Global Business and Social Enterprise Program (Globase), offered in the full-time MBA program, offers a unique opportunity to learn in the classroom and immediately apply these techniques to entrepreneurial businesses and nonprofit organizations in emerging economies. Organizations participating in Globase are based in Latin America, Africa, and India.
Students are assigned to projects based on their preferences. They talk with the organizations about the project, learn about the issues the organization faces, and develop some initial recommendations.
The Globase Guatemala course is led by clinical associate professor Alex Lopes from the Department of Operations and Decisions Technology (ODT) , who supervises all projects. Other faculty in ODT teach classes in Globase to support students. As students move through the project development phase, these faculty open their offices to questions and help fit the right tool to the problems.
The highlight of the course is a visit to the organization in its home country. Students present their initial recommendation, and learn more about the organization to update the recommendations. They finish the project proposal after returning from the trip and send it to the organization.
Amy Mueller, Eduardo Drakhlis, and Amanda Abbey were a part of the team assigned to Cantel, a high-quality textile company in Guatemala. Cantel opened in 1874 but filed for bankruptcy in 2008. New investors, “who remembered wearing Cantel cloth diapers as children,” according to Mueller, rescued the company which reopened in 2009.
Now supplying Hilton Hotels with ten percent of their towels, changes in Cantel needed to be made. Cantel oversees all of the steps in making a towel, which is one of the quality selling points. Unfortunately, the manufacturing facility is a massive compound of machines and inefficiencies.
The team knew a synopsis of the company and the issues prior to visiting, but “everything changes when you’re really talking with them,” said Mueller.
How to Begin
The team began communicating with the company during the second week of the semester, and immediately came the question of where to start.
Cantel’s suggestions for the project were internal analysis and operational improvements, and their position in the market. Narrowing the particulars of these suggestions proved difficult. Originally, what looked like a Human Resources issue, quickly became an operations project.
“They tell you the first week of class, ‘They will probably tell you this is the problem and it probably is not the problem.’ But it is hard when someone is telling you this is our problem to not say, ‘Okay let’s fix it.’ Trying not to take everything as face-value and try to get into the situation,” said Abbey. “We went through 3 different stages of what we thought the problem was.”
Group members contacted faculty in ODT to guide the project. Clinical Professor Carl Briggs taught in the Globase course, and Associate Professor Kyle Cattani taught MBA Core courses. Both advised the team on how to approach Cantel’s complex issues.
The Globase team chose to analyze Cantel’s production efficiency.
“They are plagued by old machines that breakdown often, a long production process and numerous issues dealing with low employee morale, communication issues between departments within the plant and lack of measurement of production metrics and maintenance orders,” said Mueller.
In addition to these issues, Cantel deals with power outages. Last year, the plant did not have power for 156 days. Most of the issues could be solved by purchasing new machines and generators, but Cantel does not have the resources to invest in these.
“The most challenging part was that things we learned in class weren’t feasible given our time constraint and our knowledge of the factory,” said Abbey.
Operational Solutions in a restrictive environment
Focusing on what the students could solve meant ignoring many of the solutions that are outside of Cantel’s budget—in particular, purchasing new machines and back-up generators. Some parts for machines were created by hand, wood and metal, because the certain parts of the machines are no longer mass produced.
The Globase team conducted interviews and analyzed data given by Cantel. The team offered four solutions to decrease the cycle time: engaging employees, information sharing, standardizing communication, and tracking metrics. These solutions emphasized preventative actions that can be taken by the company.
Solutions were communicated before the team visited Guatemala, and when they arrived, the Cantel managers presented for 2 hours on how they implemented the team’s initial recommendations.
Mueller observed, “Management was excited with our ideas and what we were proposing and thought that the ideas were things they had not tried, and were doable items that they felt would truly make a difference for their company. The client was great, they were generous, positive and really wanted to make positive change and impact on their company which was encouraging to see and work with.”