The cable industry has come a long way since the first cable operations were established in the late 1940s. Originally designed to be able to provide television signals to remote areas, cable operators have developed a complex system of services that now includes television, internet, telephone, wireless services. As the services have expanded, so has the competition, resulting in an industry in a state of flux. The article will examine some of the top Cable MSOs and the challenges they are faced with.
Defining the Cable Business Players
Perhaps the best way to start is to define a couple of key terms/acronyms such as MSO and CPE.
- Multi System Operator (MSO)
- A multiple system operator or multi system operator is an operator of multiple cable television systems. Although the FCC defines a cable system as a facility serving a distinct community making virtually every cable operator a - MSO, the term is generally reserved for the major industry players.
- Customer Premise Equipment (CPE)
- CPE is used to describe the hardware equipment as a customers home or place of business. Equipment can include, cable modems, receiver sets, cable, remote control devices and any other hardware provided by the MSO. Placement of CPE with the subscriber allows for the MSO to control the technology used and makes them responsible for equipment upgrades. With hundreds of millions of CPE at stake, good CPE management is essential
The Top 25 MSOs
| Rank |
MSO |
Basic Video Subscribers |
| 1 |
Comcast Corporation |
23,447,000 |
| 2 |
Direct TV |
18,660,000 |
| 3 |
Dish Network |
14,337,000 |
| 4 |
Time Warner Cable, Inc. |
12,817,000 |
| 5 |
Cox Communications, Inc. |
5,100,000 |
| 6 |
Charter Communications, Inc. |
4,801,000 |
| 7 |
Cable vision Systems Corporation |
3,064,000 |
| 8 |
Verizon Communications, Inc. |
3,029,000 |
| 9 |
AT & T, Inc. |
2,295,000 |
| 10 |
Bright House Networks LLC |
2,257,000 |
| 11 |
Suddenlink Communications |
1,244,000 |
| 12 |
Mediacom Communications Corporation |
1,234,000 |
| 13 |
Insight Communications Company, Inc. |
723,000 |
| 14 |
CableOne, Inc. |
667,000 |
| 15 |
WideOpenWest Networks, LLC |
396,000 |
| 16 |
RCN Corp. |
361,000 |
| 17 |
Bresnan Communications |
303,000 |
| 18 |
Atlantic Broadband Group, LLC |
275,000 |
| 19 |
Armstrong Cable Services |
245,000 |
| 20 |
Knology Holdings |
236,000 |
| 21 |
Service Electric Cable TV Incorporated |
225,000 |
| 22 |
Midcontinent Communications |
212,000 |
| 23 |
MetroCast Cablevision |
182,000 |
| 24 |
Blue Ridge Communications |
174,000 |
| 25 |
General Communications |
149,000 |
* Source: National Cable & Telecommunications Association
Top 5 Snapshots
Not surprisingly the top 5 MSOs are a mix of cable and satellite companies. All 5 companies offer triple play or single service offerings. Triple play is when voice (telephone), data (cable) and video (TV) are combined. A quick look at top and a link to their websites.
Comcast Corporation
Comcast Corporation, founded in 1963, has grown to be the largest MSO through a long history of acquisitions and innovations. Comcast first offered broadband services in 1996 and then digital voice in 2005. Recent agreements with General Electric to buy NBC have put Comcast on the verge of redefining the industry.
Direct TV
Direct TV, the largest of the satellite players was founded in 1990. Direct TV now has a major foothold in Central and South America as well as having a major footprint in North America. Direct TV does offer a triple play package although the phone service is through partnerships with national telecommunications companies such as AT & T or Verizon.
Dish Network
Operations for Dish Network began in 1996 and the company has continued to grow. Dish Network does offer a triple play option and like Direct TV the service partnerships with telecommunication companies. Dish Network has also received a great deal of scrutiny from the FCC for some dubious sales practices.
Time Warner Corporation
Time Warner is one the oldest cable MSOs with clients in approximately 28 States. The company offers a triple play package that has been well received as their subscriber breakdown would indicate. Time Warner 8.8 million digital video customers, 9.2 million high-speed data services to residential customers as well as over 4 million residential Digital Phone subscribers.
Cox Communications
Cox Communications is the oldest of the major players and began operations back in the 1920's in the newspaper business. Today Cox Communications boasts almost 3 million cable subscribers, 3.5 million internet and 2.2. million digital phone subscribers.
Cable Industry Challenges
In addition to all of the top MSOs offering a triple play package, Comcast has even started offering the first step to Quad play, which is the addition of cellular telephone coverage using Wi-Max. Most, if not all, of the top MSOs will soon be offering the same. The addition of new technologies such as Wi-Max has placed the cable MSO into new fields dominated by huge telecommunications companies such as AT&T and Verizon.
The foray into telecommunications is sure to bring new rounds of mergers and acquisitions as well as legal challenges as companies fight for bandwidth and dominance. However, new technologies and how to integrate them into a service offering are only part of the challenge that MSOs face.
The Cable Silo
The major challenge for Cable MSOs is to change their traditional business structure which has all service offerings acting independently (silos) to a more integrated business model allowing them to operate as a single business unit. Fixing the silo issue includes, the duplication of marketing efforts, product development, warehouse management of CPE, and other operational inefficiencies.
If Cable MSOs continue to operate their products as separate business units they will fail to achieve the operating margins necessary to remain competitive because of the duplication of effort and a lack of company focus. They will effectively open the door for businesses that can offer multiple services offerings as one entity to steal their market share.
Net Neutrality
Net Neutrality is a hotly contested issue pitting internet providers against the public. Network neutrality is the principle that all Internet traffic should be treated equally. At the heart of the issue is whether or not Cable MSOs and telecommunications companies should have the ability to control what internet users see or do. Proponents of net neutrality fear that internet providers will abuse the control to steer subscribers to costlier services by restricting access.
Bandwidth
There is only so much room for data to be transmitted within the framework setup by the FCC. Cable companies struggle to provide adequate bandwidth to subscribers who have increased demand as a result of video streaming, music downloads, emails and all other activity that requires a channel in order to operate. A switch to fees based on usage is already causing a public backlash.
Internet TV
Internet TV is the ability to watch a set of programs on a computer or handheld device. Programs can either be streamed to a media device or downloaded to a computer. Competition is becoming fierce because of the need for quality content. As a result, Cable MSOs as well as Satellite TV companies are looking to expand unique content and control of content through partnerships and acquisitions.
Cable MSO Ownership
As previously mentioned, the industry is through a fairly rapid phase of mergers and acquisitions, the most notable being Comcast's purchase of NBC. Other high profile partnerships include joint ventures between the telecommunication giants, Cable MSOs and Satellite TV companies to provide the next generation of 4G networks.
Wi-Max 
The development of Wi-Max is changing the landscape of broadband markets. Wi-Max essentially enables true portability of mobile connectivity in most markets. It also is capable replacing DSL, Cable and telephony services. Wi-Max has its limitations and signal strength can be reduced by having too many users or by being too far away from the a subscriber unit.
Digital Devices
More and more digital devices are being developed that can accept the various forms of steaming. As they are developed, MSOs are forced to adjust their product offering to accommodate users. Almost all of the above issues can be wrapped into technology development. In addition, newer devices use more power and their is concern that the devices could interfere with each other affecting signal clarity.
Summary
The Cable Industry faces many challenges ranging from business management to technology. The next few posts will take a deeper look into the opportunities presented by the challenges. We hope that you liked this introduction and look forward to your feedback. If you liked this article you may also enjoy reading:
What is worse than not doing a manual serialized CPE reconciliation in the middle of the summer? One answer is, scheduling a manual reconciliation during the 2010 World Cup. It is difficult enough to get people to show up for work on the dog days of summer and even harder when there is a major distraction waiting in an air conditioned room.
The top 5 reasons why cable warehouse managers should not schedule a manual reconciliation especially during the 2010 World Cup are:
- A manual reconciliation can take a few days to a week or more. Unless reconciliations are done at night, this will conflict with World Cup games being shown on cable. Soccer fans have a worldwide history of not showing up for work during game times. Your reconciliation will take even longer.
- One week of unbearable heat and humidity in a hot warehouse doing a mundane task is not good for employee retention.
- Paper curls in high humidity, sweat drops can distort numbers on printed forms making numbers unreadable. This results in higher error rates, additional rework, and more time wasted performing unproductive work.
- No one wants to work the top shelves where the heat can be 20-30 degrees hotter. This may result in unsafe working conditions and substantially higher errors.
- Because doing a manual CPE reconciliation is a waste of time if the object is to reduce CPE loss or have accurate inventory CPE counts.
Cable Leader SETS is a Better Alternative
What is your summertime CPE inventory count could be done in just a matter of hours, scheduled between games if necessary, provide a serialized CPE reconciliation and also give you accuracy never before achieved using a manual counts inventory? Sound good? Now what if the same serialized CPE, could perform container reconciliations and most importantly interfaced with the three major cable billing systems (ICOMS, CSG and AMDOCS). The answer is it can with, WinTrack® SETS, the only cable warehouse management tool specifically designed for cable operators.
Implementing SETS enables more effective management of CPEacquisition, storage, maintenance and life cycle. This enhances the ability of MSOs to reduce capital expenditures and operating budgets associated with CPE management. SETS accomplishes these goals by:
- Reducing CPE Loss: Serialized reconciliations are far more accurate in identifying CPElocation as well as identifying missing, damaged or lost CPE. This is because they make use of CPE barcode technology for scanning and tracking purposes.
- Reduces labor costs: Serialized reconciliations are performed using rugged handheld devices sharply reducing paper trails and reducing the reconciliation process to a matter to hours by scanning barcodes.
- Reduction of Capital expenditures: Since reconciliations will only take a few hours, they can be performed monthly, providing greater inventory control and planning. Capital expenditures are reduced as less inventory is need on hand to meet demand.
The intangible benefits are of course that fewer warehouse staff will be absent as a result of the 2010 World Cup and time spent scanning the top shelves for CPE inventory is greatly reduced. Lastly, reconciliations are no longer a waste of time but rather they become integral components of a successful MSO cable company. If you liked this article you may also like:
This is the third and final part of How To Justify a Cable Warehouse Management System. Part I covered how to get your head in the game and make a plan. In Part II, we discussed why you need to identify in detail where your operations are suffering or need improvement. In this final post of the series you will learn the basics of putting together the numbers to make your case for change and better CPE management.
It's All About Cable Warehouse Numbers
In order to make a case by the numbers for your cable warehouse operations you must know your current productivity measurements, CPE loss numbers, the time spent on non-productive tasks such as reconciliations and your current overhead expenses such as forms or HVAC. Lets take a look at obtaining the three basic but major expenses in a cable warehouse operation:
- CPE Loss: CPE losses are simply the costs of the number of units unaccounted for or damaged. This number can be ascertained from the reconciliation results.
- Warehouse supplies and expenses: This is the amount of money spent on forms, clipboards, plastic wrap, etc. as well as the amount of money it costs to operate after regular scheduled hours.
- Labor Costs: Labor costs are slightly more difficult to obtain because they need to be broken down into several key sub-areas. If these numbers are not available then measurements should be made to obtain. For example:
- How many man-hours are required to do CPE reconciliations and what is the frequency (monthly, quarterly, annual) of the tasks?
- How many times is the same piece of CPE serviced (repaired or tested)
- What is the total number of truck rolls per client. Each time the truck rolls out there is a labor and a fuel cost. What is your average trip cost?
- What is the total time required for CPE to go from received at the warehouse to issued status. This includes all the time spent waiting for action at bottlenecks, redundant actions and the time spent on filling out forms or checking paperwork. If the number is unavailable then measurements should be taken using an average worker on an average day. The concept is to approximate the average amount of time for the CPE to be processed.
It should be noted that each warehouse is different with unique managers and issues. Therefore, the preceding list should not be considered as the only numbers to consider. The key is making sure you have identified the weaknesses in your operation so that they may be fixed with a combination of automation and better CPE management tools. In case you are wondering why you would want to expose the faults in your warehouse operations I can say trust me when I say to you it is better to admit weakness and work on solutions than to wait for senior management to ask you why you did nothing to fix the problems. When that conversation starts you have already lost.
Analyze the Impact of a Cable Warehouse Management System
For some cable warehouse managers analyzing the numbers is the fun part. However the key is to make a case for your operations. With this in mind it is good to make a chart of some kind to picture the potential impact of a new cable warehouse system. One method is to make a small table showing the current situation, the costs, the projected savings and the difference.
For example (numbers are fictional examples and not a promise of savings)
Assuming an average rate of $25 per hour (fully loaded), 2080 hour/year
| Expense Item |
Current Annual Costs/time |
Projected Costs with WinTrack® SETS costs/time |
Annual Savings |
| Overtime |
a |
b |
a-b |
| Average Truck Roll |
1.15 x $30 per trip x # of trips = d |
1.05 x $30 per trip x # of trips = e |
d-e |
| Inventory/Reconciliations |
20 ppl x 80 hours x $25/hr = $40,000 |
20 ppl x 4 hours x $25 = $2,000 |
$16,000 if done monthly |
| CPE Loss ratio |
7% overall, 4% warehouse |
6.5% overall, 3.5% warehouse |
.5-1% (whatever number this is) |
| Overall labor Costs |
q |
q x .85 (assuming 15% savings) = r |
q-r |
| Totals |
xxxxx |
yyyyy |
xxxxx-yyyyy |
Once your key savings numbers have been calculated and charted, it is time to create a PowerPoint presentation of 8-12 pages that states your case for purchasing a Cable warehouse management systems such as WinTrack® SETS. Document all your key assumptions and critical risks for backup. When this is done it time to get in front of the big dogs.
Share with us your questions or problems in making a case for purchasing a Cable warehouse management system to help your operations.
Related articles
In Part I, The Basics of Persuasion, we took a look at 6 areas that cable warehouse managers should address in order to justify the Warehouse Management Systsem (WMS) they want. Part II looks at one of those areas in greater detail. More specifically, this post examines how to identify and describe the reasons you are seeking help.
Your a good manager, you know you need help, but when you approach the big dogs, they tell you budgets are tight, sales are not as good as they had hoped and software to help you run the warehouse just isn't on the radar. Sound familiar? The good news is top management just opened up a huge door for you. The reason is they just told you it is all about money. What they are really telling you is show me the money. This is not as difficult as it may seem but it does require some planning and analysis on your part. All good managers will listen if approached with a proposal that may save thousands if not millions of dollars, all of which can flow directly to the bottom line making them a hero.
Where is your pain
To understand your pain (areas where a system can make a financial impact), you need to understand the workflow as well as the issues in the warehouse in great detail. Productivity consultants would call this a brown paper which a visual map on your wall or conference room with all the steps of the warehouse displayed with step detail on each item. A complete brown paper identifies all the tasks in the warehouse good, fair and those that need improvement but more importantly it answers why there is a problem. The issues uncovered may include items such as:
- Work bottlenecks (including manual processes that should be automated): Eliminating bottlenecks will allow for more work to be done in the same amount of time as well as reduce the waiting time for actionable items dependent on getting through the bottleneck.
- CPE Loss: CPE loss from theft, misplacement or damage is an automatic cash drain on the Cable operator. Know what your loss numbers are. In many cases reducing this loss alone will justify the costs of a WMS.
- Time consuming and/or inaccurate reconciliations: How long and often are warehouse operations put on hold to perform reconciliations. Are the reconciliations count based, what would be the impact of a serialized reconciliation? What are the man-hours to be saved? Chances are your accounting department would like some input here.
- Poor inventory control: Do you track CPE inventory from the moment of arrival through customer or contractor assignment? How do you keep track of CPE in for repairs? Calculate the amount of CPE that is lost because the current system allows for too much to slip through the cracks.
- Useless or inefficient paper flow: Non-computerized work flow systems are inherently inefficient and wasteful. Know how all the paper flows and identify what should be eliminated. Calculate the savings.
- Overtime as well as other labor costs: The first question is to ask "Why is there overtime?" Is overtime a result of inefficiency, poor scheduling, training, uneven workloads etc.? The best place for answers on this is with the actual warehouse staff. Involve them with the issues and solutions. How much overtime can be reduced? You will need this support later on.
- Antiquated or non-automated billing interfaces: How much time and money could be saved if the CPE movements were automatically integrated into the billing system?
- Redundancy in operations: Workflow analysis may indicate that many of the same tasks are being performed at various locations either within the warehouse, with contractors or at multiple locations. How much work can be consolidated using a hub and spoke model (centralization of specified tasks)?
Although this is not a listing of every opportunity for improvement it is a start for manual or problem operations. But this step does not end here. Even if you are to identify the most significant problems, one needs to be able to describe them for your presentation/report.
The Art of Description
Imagine you are an executive talking to several of your top managers. You ask how things are going and what you can do to help. One manager tells you that everything is great and not to worry, the second starts telling you all the problems he has and that he needs a WMS to get better control. The third manager says to you that she has found a great opportunity to save the company money both in labor and capital purchasing expenses, get more done with less and make accounting smile. Which manager do you want to hear? Most executives would want to fire the first person, make an excuse to walk away from the second manager and invite the third manager into the office to hear more.
The art of description is to transform negatives into a positive. Henceforth and for the remaining pieces of this article, there are no problems to be fixed only opportunities to be captured. The key in describing an opportunity is to be able to present your case by the numbers and be able to back the numbers up. For example, using the list above derive or calculate:
- Using a system specifically designed for cable warehouses, we will be able to track CPE inventory using barcodes to know where all of our CPE is. This action will reduce CPE losses by at least 75% saving over $ XXXX.
- We can reduce the time to perform reconciliations by 50%, reducing labor costs by XXXX man-hours and also increasing accuracy of inventory which will enable us to budget capital purchases better lowering cash flow reserves needed for promotions.
- By switching to an automated system, labor efficiencies will increase 20-30% and paper costs will be reduced significantly. This will help the companies Green objectives.
By the time you are finished with this part of the justification preparation, you should have identified all the areas that can be improved by implementing computerized systems to help with warehouse management as well as know the expense reduction potential. The next post will talk about how to obtain more specific expense reduction numbers by understanding productivity measurements.
If you need assistance in identifying opportunities in your warehouse, contact us or leave a comment. We will be happy to assist you.
We all know times are tough, the cable industry is in a fight for survival against telecommunication providers, satellite services as well as other TV, internet, phone and WiMax providers. Lost in the battle for market share are the warehouses that supply the customer premise equipment (CPE) for customers. However, these business units can add significant dollars to the bottom line for cable operators after a Warehouse Management System (WMS) has been implemented. Monies saved can be used to further the sales and marketing push or reinvested back into operations. Many warehouse managers recognize they need help but are unsure how to proceed. This post will provide an outline to ascertain the WMS cable operation managers need. Subsequent posts will take a look at sections in greater detail.
The Basics of Persuasion
Warehouse managers should never assume their pleas for help will be overruled by the screaming and slick presentations of the sales and marketing department. Successful campaigns rely on preparation, persistence and presentation (PPP). The following steps will help warehouse managers prepare for battle.
- Prepare mentally by understanding it will be a battle. The passion you proceed with will only enhance how others perceive you professionally as well as define who you are. You are asking people for money, so leave nothing to chance in your preparation. If you are not up for the battle then move over and let new blood in. Cable operators need people willing to take risk for the benefit of the company.
- Identify all the things that need improvement in the warehouse. This may include a reduction on labor costs, CPE loss, wasted inventory days, space usage, the tons of paper flying around and even warehouse management (staff or procedures). List everything as this is the pain that is being addressed and will be part of your opening presentation as well as the closing arguments.
- Identify productivity measurements that are already in place. If measurements are not in place then create them by monitoring activity for a 4 week or more period of time. This is your workflow detail and it is the most important preparation you can do. Executives such as your CFO understand that a business is run by the numbers. Therefore, unless you can show how the WMS tool will lower costs to provide a positive return on their investment you will never succeed.
- Engage your staff. Ask the warehouse personnel for their feedback. Do not assume you know all the questions or answers. For example, ask the how they would improve operations or what issues they run across. Two things will happen with this. First, engagement of employees will obtain their buy-in. Without their buy-in, any new system will struggle for adoption or even fail. Second, you will discover an ally, a person who wants to make the company better and can do so with the right energy and attitude. It is an opportunity for someone to establish themselves as well as create a career path.
- Make a list of major gains. Use the information gathered above to prepare a list of major benefits for implementing a computerized system. Justification for these items will take place in one of the subsequent posts to this article.
- Do you homework. Executives do not want to hear your problems, they want to hear your solutions. Begin information collection on WMS specifically designed for cable. Seek out systems that can best meet your pain. Quality is more important than price at this stage. In later posts we will discuss how to review the Total Cost of Ownership (TCO) and how to reflect this in your recommendation/presentation.
The preceding steps are identified to help you create a plan of attack. They will also help you truly understand the workflow in your warehouse which is crucial to good cable warehouse management. Future post will examine Steps 2-6 in greater detail. Contact us at any time if you need assistance and make sure you don't miss any posts by subscribing to the Mintek blog today.
Whoops this was supposed to go to the EAM blog you can still read it here if you are interested.
Preventive Maintenance Goes Green for St. Patrick's Day
When acquiring mobile handheld technology, price is not the most important decision factor. Purchase managers will want to evaluate the costs associated with durability, reliability, ease of use/training, as well as ongoing maintenance over the entire
asset lifecycle for each handheld device. Together these factors help make up the Total Cost of Ownership (
TCO). The
TCO for some products can be 3-10 times the original price making it very important to ask the right questions during the planning stage.
The top influences for determining the
TCO include:
- Durability. Durability covers the likelihood that an item will break as a result of motion, too many moving parts, temperature extreme and quality of design for the task at hand. Each time an item breaks there are costs associated to replace as well as downtime. Purchasing managers should look at external casings, design and susceptibility to changing thermal conditions.
- Reliability. Reliability issues include battery life, software stability, how often is technical support needed and at what costs. Examples include the amount of downtime due to battery recharging, bugs in the software and technical support issues.
- Ease of Use/training. Often an underestimated expense, it is important to understand what type and how much training is required to operate the device.
- Technology platform. There are two major components to evaluating the technology platform. The first is making the proper efficiencies are being provided by the technology. This may include a touch screen or ease of mobility. The second component is making sure the operating platform is in series and not going to be obsolete with replacement or new devices. Equipment should be easy top track and maintain and not worry about which device has which features or operating system.
Consumer versus Commercial Products
To get a better idea of how
TCO should influence purchasing decisions let us take a look at the
TCO for operating handheld devices versus competitive offerings in the cable industry.
Example 1 - Cable Industry, MC9090 versus tethered scanners. Primary goals are to scan CPE inventory, asset tracking, perform serialized reconciliations.
|
Price Range |
Durability |
Reliability |
Ease of Use |
Technology Platform - mobility |
Technology Platform - stability |
| MC9090 |
$1500 - $5000 |
great |
great |
great |
unlimited |
stable |
| Tethered Scanners |
$150 - $ 2500 |
fair-good |
good |
good |
limited |
stable |
The key to successful integration of handheld technologies is to understand how the devices will be used over the entire lifecycle of the product. Commercial products such as the Motorola line are designed to be very durable but also to work with specific application software. Consumer products although cheaper on the initial buy have less flexibility with regard to true mobility (tethered products), battery life, memory capacity and stability. In addition, consumer products will more likely have to be replaced more often as either a result of failure or changing series. For example, the MC9090 has been used for over a decade and can be supported almost indefinitely.
Mintek strongly recommends the MC9090 for its proven longevity and durable within the cable warehouse industry. Share with us your thoughts on using handheld devices.
A hub and spoke model is essentially a centralized distribution system where customer premise equipment (CPE) inventory is processed and then shipped to smaller nodes or directly to consumers. The smaller nodes may be smaller warehouses, office locations, local pickup and drop-off locations. Converting to a hub and spoke model has significant advantages for cable companies which include:
Advantages
- Reduced Capital for Inventory and Lowering Facilities Costs are the primary reasons to convert to a hub and spoke distribution system
- Reducing the number of warehouses significantly reduces rent and other building expenses such as utility and maintenance expenses. In addition, lower operational and administrative overhead is achieved as taxes, insurance, telephone and other facility overhead is eliminated.
- Reducing the number of warehouses and centralizing inventory dramatically decrease the the amount of inventory carried. Only the hub needs to carry a lengthy supply and nodes can switch to a more economic Just-in- Time inventory method.
- Moving equipment between the becomes easier as logistics becomes simpler to manipulate.
- Increased Efficiencies as specialization takes the place of generalist perfoming multiple tasks. Functions positively impacted by centralization are
- Testing
- Diagnostics
- Cleaning
- Repacking
- Box and Set up
- Speed of moving CPE between facilities and to the consumer increases.
- Economies of scale result in cost savings
in all aspects of operations.
- Mass shipping and receiving of larger quantities will lower inbound and outbound shipping costs
- Larger more efficient equipment i.e copiers, labeling equipment etc., replaces smaller less used equipement at remote locations lowering maintenance and repair expenses
- Centralized purchasing lowers per unit, shipping and administrative time as operating supplies can be purchased in larger quantities
- Inventory control is better by not having to reconcile as many locations
- Duplication or elimination of software packages and administrative tasks
- Lower CPE loss
- Ability to perform am accurate serialized inventory is enhanced. A serialized reconciliation provides detailed CPE information traceable by the serial number on each piece of equipment.A full reconciliation tells you what is missing by gathering all records for the specified location from the billing system and then comparing it to the scanned data. Fewer locations needing to be reconciled means better control and less CPE loss.
- Outside vendor repairs shops can be minimized as economies of scale are developed thus reducing missing CPE
Drawbacks: A hub and spoke system does have potential drawbacks and these should be recognized and planned for with contigency plans or adjustments.
- Bottlenecks: From an operational standpoint the central hub has the potential to become a non-functioning bottleneck especialy with regard to weather and other environmental problems. In addition to weather related issues, poor operations management can negate virtually all of the above listed advantages to the point where customers must wait extended periods of time to receive CPE thus impacting revenues.
- Reduced Flexibility: Other drawsbacks include flexibility that smaller operations have over larger operations. Problems and issues that may be of concern to a particular location are now lumped into a bigger pot and may not receive the attention they need. This is an operations management issue to be thought out before conversion.
- Not all tasks can be centralized: For example CPE resets have historically been performed by the location that the CPE originated from. Plans should be made to accommodate these types of issues.
Conversion to a hub and spoke model is a competitive necessity. Approximately 40% of cable operators operate on a hub and spoke model of some degree. The cost advantage to these operations is likely to be magnified as revenues flatten due to economic times or competitive forces.
A serialized reconciliation provides detailed Customer Premise Equipment (CPE) information traceable by the serial number on each piece of equipment. Tracking by serial number also eliminates guesswork of CPE repair by creating a history for each CPE. Typical reconciliation reports provide detailed CPE counts, matches against the billing system, lists of missing items, wrong location or status and unknown serial numbers.
Why do a Serialized Reconciliation?
The biggest reason serialized reconciliations are performed is
because of their impact on the cash flow of an organization. Good CPE counts impact cash flow by:
- Increasing operational and financial control
- Better forecasting and planning - accurate historical information is the premise for forecasting future needs. A solid forecast enables better planning especially budgeting. Nothing hurts an operations manager worse than coming in over budget.
- Better organized warehouses - knowing where everything is means less time spent looking for particular CPE and more efficient operations and a lowering of labor costs. Serialized reconciliations can be done with just a fraction of the manpower and far quicker.
- Increasing accuracy
- Flexibility for the unknown (large PPV events, new marketing campaigns) - Good counts allows for the storing of CPE for special events and promotions without the risk falling short of demand or committing supplies that are not available.
- Great purchasing with timely replenishment of inventory levels - carrying cost of inventory are lowered and more timely restocking will occur.
- Reduced CPE loss from technicians, contractors and repair vendors by knowing who is accountable for CPE.
- Better internal audit results - spot and regular audits will be quicker and can pinpoint where CPE is located.
- Identify work flow gaps where CPE loss occurs - by identifying missing and not on file CPE patterns will develop, enabling adjustments to work flow procedures to correct high variances.
- Reducing CPE Losses
- Reduction in lost CPE - elimination of opportunity theft and a reduction in missing/not on file CPE flows directly to the bottom line.
- Reduction in capital expenditures to replace missing CPE - lower theft means and a reduction of missing CPE means less capital expenditures are required to maintain supplies.
- Reduction in labor expenses replacing missing CPE - replacement of CPE costs more than just the physical unit. Less labor will be involved in ordering, restocking and investigating.
- Increases productivity by boosting morale - Reconciliations are no longer such a despised task. Faster more accurate reconciliations will reduce the stigma of a mundane task resulting in improved morale.
Tell us your pain and let our
industry experts find a solution for you.
Reconciliations, the word brings groans from warehouse and accounting staff. You can hear them cry out - "No Mas, No Mas". Monthly/Quarterly and Annually, morale dips and senior management braces for the latest CPE loss statistics. CPE reconciliation doesn't have to be a nightmare. Fortunately, there is a way to involve fewer people, perform an inventory reconciliation faster, and make senior management smile at the latest stats. The secret is a good Subscriber equipment Tracking System (SETS) integrated with handheld technology.
Old Versus New - The Process 
Back in the dark ages manual inventory reconciliations involved groups of people running around the warehouse trying locate and track down CPE. The result was usually a band-aid report showing only the number of boxes missing. Type of CPE and serial number were rarely detailed. Inventory reconciliations with SETS enables warehouses to perform a full physical inventory by scanning the serial numbers for a particular location. Locations normally include:
- A warehouse
- A contractors inventory
- Installers inventory
- Front office
- Vendor repair center
Reconciliations with SETS are performed with a handheld device, then uploaded to a PC and finally compared against the information in the billing system. The end result is a discrepancy report detailing the variance between the scanned data and data contained within the billing system.
Old Versus New - The Science
The use of technology (software and handheld devices) has enhanced the tracking of CPE and automated reports. More importantly the techology has impacted the bottom line of organizations. Bottom line impacts by:
- Increasing the accuracy of reconciliations. Reconciliation by serial number is significantly more accurate than a reconciliation by total. Counting the number of boxes does not tell you the serial numbers inside them. Handheld scanners virtually eliminate manual keying errors.
- Reducing labor costs. Few people are required to perform the reconciliation, Reconciliations are done in just a fraction of the time.
- Lowering theft Theft is lowered as inventory is more tightly and accurately controlled. Location inventory tightens down the theft opportunity.
- Lowering accidental losses. CPE is far less likely to fall through the cracks and go missing.
Reconciliation Options
Serializing your inventory allows for the tracking of CPE with far greater detail and flexibility. With SETS a full or cycle count reconciliation can be done. A full reconciliation tells you what is missing by gathering all records for the specified location from the billing system and then comparing it to the scanned data. From this comparison a discrepancy report shows the matched serial numbers and also the unmatched serial numbers. In addition, reports will show any CPE that were not scanned but the the billing system says they should be there and CPE scanned but not in the billing system.
In contrast, a cycle count reconciliation will only confirm (verify) what is at a particular location. Cycle count reconciliations are great for spot checking inventory count.
No longer do reconciliations need to be a nightmare. How do you do your reconciliations, are they accurate and fast?