A system study on the Export Department of Pac-Atlantic Lines (Philippines) Inc

• Main Authors: Del Rosario, Carmina, Parentela, Florinda
• Format: text
• Language: English
• Published: Animo Repository 1997
• Subjects: Root cause analysis; Freight forwarders; Industrial Engineering
• Online Access: https://animorepository.dlsu.edu.ph/etd_bachelors/4098
• Institution: De La Salle University

Pac-Atlantic Lines (Philippines) Inc. started out as a small freight forwarder in 1987 and became a consolidator in 1991. At present, it has already assumed the role of a Non-Vessel Operating Common Carrier (NVOCC), Freight Forwarder, Cargo Consolidator and Breakbulk Agent altogether. The group performed a system study on the Export Department of Pac-Atlantic Lines. After weeks of observations, interviews and data collection, the group identified potential problems in the system of the Export Department. By doing WOT-SURG Analysis, it was determined that the main problem of the department was the low turnover of its accounts receivables. The A/R turnover of 2.05 in 1997 was 80% short of the target of 10.10. This says that the average collection period of the department has reached 148 days. Compared with the allowable 30-day period for collection, it is 118 days delayed. After further analysis, the true causes that contribute to problem on low accounts receivables turnover were made known. These are: certain problems in the forwarding industry such as trading-off of export with import sales. The absence of a credit policy to be strictly implemented and the absence of a monitoring and collection system in the Export Department. Such move led to choose designing of credit policy and monitoring/collection procedures, formation of a Credit and Collection Team and Negotiation among major forwarders as best solutions to the problem. The implementation of the proposed solutions will incur costs while gaining benefits for the department. The yearly cost that will be incurred is estimated to be P 288,600 while the quantitative benefits computed amounts to P 744,555. The department will have savings amounting to P 455,955 per year. Implementation plan includes: first, presenting the study to the Export Management, second, planning for the entire credit and collection program while hiring a collection personnel, third, orientation of the employees and the collection team, fourth, actual implementation and f