EVIDENCE 1: THE LPQ BUILDERS COMPANY CASE ANALYSIS

ALUMNO:
CARLOS ALBERTO HOYA SANJUAN

SERVICIO NACIONAL DE APRENDIZAJE

CENTRO AGROTURISTICO
TECNOLOGA EN NEGOCIACIN INTERNACIONAL
BARRANCABERMEJA
2016

EVIDENCE 1: THE LPQ BUILDERS COMPANY CASE ANALYSIS

ALUMNO:
CARLOS ALBERTO HOYA SANJUAN

Actividad de aprendizaje No. 24

Evidence 1: The LPQ Builders Company case analysis

TUTOR:
JUAN CARLOS RODRIGUEZ SARMIENTO
INGENIERO FINANCIERO

SERVICIO NACIONAL DE APRENDIZAJE

CENTRO AGROTURISTICO
TECNOLOGA EN NEGOCIACIN INTERNACIONAL
BARRANCABERMEJA
2016

Contenido
Pg.

INTRODUCTION ................................................................................................................. 4
ANALYSIS AND RESULTS ................................................................................................ 5
1.

Administration ............................................................................................................ 5

2.

Internationalization ..................................................................................................... 6

3.

Human resource management ..................................................................................... 7

4.

Production ................................................................................................................... 8

5.

Marketing .................................................................................................................... 9

6.

Finance ...................................................................................................................... 10

CONCLUSIONS .................................................................................................................. 13
BIBLIOGRAFA ............................................................................................................. 14

INTRODUCTION

The LPQ Builders is a leader company in production and distribution of building materials.
The company has a logistics network for the marketing of its products that has been
structured based on Colombias geographical conditions. Its main headquarter is in Bogota
city and it also has branch offices in Buenaventura, Cartagena and Armenia.
The LPQ Builders was faced to changes in the organizational structure, which led to a
redistribution of its business units and changing its business model. In the following
management report the results of the processes carried out will be discussed, taking into
account the objectives and plans of the organization specifying in each case the level and
percentage of goals achieved by the use of indicators to display the information provided by
responsible.

ANALYSIS AND RESULTS

Therefore, from the general direction, dissemination and training processes are led on the
new strategic direction which is oriented towards the internationalization of the products in
order to encourage commitment to them.
STRATEGIC BUSINESS UNITS

1. Administration
Detailed analysis of each case
The administration is the social science that focuses on the study of organizations, where
the planning, organization, direction and control of the resources of an organization are
developed.
In LPQ Builders leads management the board of administration, headed by general
manager therefore their work is based on meeting the aforementioned steps.
The general manager should constantly evaluate all functional areas, conducting follow-up
meetings of the management of each manager business unit, hence the difficulty presented
in LPQ was due to a problem of segregation of duties. Where there was a failure in internal
control, what the administration could not prevent or reduce the risk of errors and
irregularities presented.
Solution to problems
Management should be in constant communication with other functional areas, shall
establishing processes and procedures to control the management of the business units.
The proposed solution aims to create manuals, processes and procedures to facilitate the
activities of business units, allowing the achievement of proper management, seeking the
fulfillment of their objectives.

2. Internationalization
Detailed analysis of each case
LPQ Builders decides to implement its internationalization processes facing competitive
challenges with foreign markets.
The business unit decided to hire a professional with 10 years experience in international
trade and the specific processes in the construction sector.
The new manager of internationalization hired a customs agency Level 1, for the execution
of the processes of import and export of LPQ Builders. However, in such employment,
LPQ Builders not clearly specified instructions regarding production processes, which
generated an incorrect tariff classification of imported goods. by error the company must
pay penalty customs for branch operations in Buenaventura.
As to purchase supplies that are imported by LPQ are obtained from import goods with 5
international suppliers, however 2 of those suppliers fail to deliver the goods with the
specifications required quality, which generates returns to the supplier. To overcome these
problems the company decided to implement the contractual clauses which indicates the
increase of the payment period from 90 days to 120 days, in order that suppliers remedied
the aforementioned drawbacks.
The manager stated that area internationalization has been in a constant search for
international suppliers to enable it to cut costs in your portfolio with mainly Chinese
suppliers.
Below is presented the list of suppliers.

15 domestic suppliers
5 international suppliers
3 outsourcing companies that manage input imported processes for the construction,
distribution and international transportation of goods and the fiscal and financial review of
the organization respectively

Solution to problems
The solution in terms of business unit internationalization, must go hand in hand with the
search for products or goods quality, because not only is a lower cost, it depends on a
product of lower cost but quality.

The internationalization manager should have a broader briefcase of suppliers, allowing to

meet the needs of production, on several fronts. In addition must select certified suppliers
through a study or risk analysis, in order to ensure effective deliveries and quality products.

3. Human resource management

Detailed analysis of each case
This business unit planned to run two processes of training for operational staff, in order to
encourage the promotion of operational positions in different business units.
When the change in organizational structure began, the CEO asked the department of
human management, will initiate a process of training for group business unit managers,
coordinators and staff processes. This request I cause that processes operating personnel
training was postponed.
With Organizational changes, management director of LPQ demanded that staff were
qualified. Wherefore human management department conducted a review of the
professional staff, identifying 10 people in the administrative that area have not completed
career.
The management decision was without the services of five administrative department
having less than 50% of their training. But the problem was that the focus of training is
open only to senior executives training. So operating personnel and lower ranges aside.
For example the person responsible for verifying the load before being put into units and
accommodated in the transport vehicle, is professional but has no knowledge about the
essential characteristics that must be taken into account in an export, implying an empty in
the process.
At the meeting of managers, the unit manager of Human Business says that the department
has focused on an extensive recruitment and selection process, which has led to qualified
personnel. But insists it is vital for the company to maintain ongoing training for all staff.
Then, relationship of employees is presented.
LPQ Builders Company, human resource :

A general manager
6 business unit managers.
10 area coordinators.
21 process leaders.

20 process assistants.
150 workers in storage roles, distribution, loading, unloading, inventory, enrollment,
tracking, shipping and receiving and filling out documents, distributed in the brach offices
as follows:
60 operators in Buenaventura
40 workers in Bogota
30 workers in Cartagena
20 workers in Cali
100 workers distributed in marketing, sales, administrative, financial and human
development activities.
50 people in adminstrative management.

Solution to problems
For proper management of human talent, it is essential to analyze the opportunities for staff
development, thus LPQ should invest in the training of its staff.
Additionally occupational health helps maintain dynamically active staff in the functional
areas of the organization, in order to maintain an adequate organizational climate. So
another important point is to invest in occupational health activities and leisure activities
and organizational culture.

4. Production
Detailed analysis of each case
The director of internationalization also directs the production area, in the company of
logistics coordinator. In this area of production are reflected in the decisions business unit
of internationalization, because the manager in order to reduce costs, hired a specialist in
international transport of goods, seeking to centralize freight since Bogot.
Due to this fact the sale of two company vehicles is performed in order to buy a software
for inventory control, because it does not have any software in the cellar document
management, to control shipments to customers national and international, which causes
problems between the branches of LPQ.
The international shipping company will share the loss percentages returned orders when
showing of improper handling of merchandise, allowing LPQ assume 50% of the costs of
return in the imperfect orders.

We used raw material in low density polyethylene in the packaging of the goods, which has
caused damage to the goods which causes devolutions by customers.
The decision of hiring international carrier, monthly 40% reduced transport costs, which in
December 2012 were $ 100 million per month.
LPQ assumes 50% of the costs of return in orders due to imperfect transport, involving 5%
of international orders and 10% of all domestic orders.
Monthly, the requested orders for finished products are 1,000 tons for the international
market and 400 tons for domestic.
Returns for orders shipped internationally from 4% of goods for damage and break the
package.
Solution to problems
It is important that management believes area processes and procedures for immediate
hiring suppliers, where make a study of potential suppliers , taking into account the risk
analysis that can generate such transaction.
It must implement the application software, which allow you to do all the document
management procedures of import and export values, into shipments and shipments of
merchandise account in all venues of LPQ.

5. Marketing
Detailed analysis of each case
Market demands have required metal cutting saw, LPQ thus began a process of market
research, which seeks with a potential supplier in three countries.
However the provider was chosen, is in the nearest country to Colombia, because that
country signed a free trade agreement with Colombia. But at that time the recruitment was
done without executing a process of competitive analysis, experience and certification
provider.
The reduction in transportation costs allowed the cost of the final product had a lower cost
for LPQ, which generated most competitive prices in the international market.
The marketing manager said LPQ presented a 5% loss of customers for domestic sales, a
loss of 1% of sales from international customers. However receives a monthly value of 10
million pesos in sales, generating 2% of the net profits per month and 6% per year

Below is presented the list of clients.

Customers in the international market

10 clients in the European Economic Community.

10 clients in the Andean area community.
15 clients in the Americas.
2 clients in Asia

Customers in the domestic market

50 clients in the Atlantic region.

50 clients in the Pacific region.
100 customers in the Andean region.
30 clients in the eastern plains region.
150 customers in the Bogots savannah.

Solution to problems
LPQ should conduct market research, where it achieves strategic decisions that provide
business opportunities, taking into account processes and procedures.

6. Finance
Detailed analysis of each case
The company decided to sell two of the four vehicles in its national fleet of transport,
because the buyer provided payment in cash, equivalent to $ 500 million, which was
immediately invested in the acquisition of software to improve the information systems of
the company.
The defective merchandise that LPQ receives causes delays in delivery to customers.
Additionally generates overruns in the shipment of goods. Monthly the purchases these
providers are equal to one billion pesos, therefore when it make effective contractual clause
to the supplier you will be sanctioned with term a wider 90 days to 120 days period of

payment. Such resources are used by the company to cover late delivery orders to
customers.
The manager of the financial business unit, said that in his area, the processes have been
properly handled and warned when dangerous situations are detected.
Solution to problems
The financial problems of the area do not originate in the same, however it is important that
the financial area support, to the internationalization area, advising on processes,
procedures and strategies, financial analysis, allowing them to meet appropriate financial
indicators.

Most indicators used in organizations are:

Indicators for supply rea :

Indicators for human resources rea :

Indicators of financial structure :

Output Indicators:

The above indicators could be used by LPQ to obtain a comprehensive and detailed
analysis of the effectiveness, efficiency, management audit and profitability, in each
functional area.

CONCLUSIONS

Looking for a proper execution of economic activity LPQ, it is suggested to use the
following indicators, which could be:
Strategic Management: develops in the direction, and its main characteristic influence the
actions and decisions is generally corporate and long term. It has to do with the definition
of macro business. Includes the company's relationship with the environment.
Tactical Management: is developed based on strategic management. The impact of
decisions and actions, medium-term, includes strategic business units. It has to do with the
initial operations of strategic decisions. Framed functions of organization and coordination.
Operations Management: developed based on tactical management. The impact of
decisions and actions is short term and includes natural work teams and individuals. It
basically has to do with the functions of implementation and control.

BIBLIOGRAFA
TORRES, Gaytan Ricardo (1990). Teoras del Comercio Internacional. Editores Siglo
Veintiuno, Mxico.
PORTER, Michael (1991) La ventaja competitiva de las naciones. Editorial Grupo Zeta.
Espaa.
HILL Charles (2001) Negocios Internacionales competencia en un mercado Global. Mc
Graw Gill. Mxico.
KINNEAR, Thomas (2000) Investigacin de mercados Mc Graw Gill. Mxico. LEGIS,
(2009) Estatuto Aduanero Colombiano, Legis Editores. Colombia