Global Transition of Video Coding Services
A Case Study in Supply Chain Optimization
Client Challenge
TNT Post needed to secure the best solution for outsourcing the video coding process in a market experiencing an 8% annual volume decline. The goals included gaining a better-informed view of market possibilities, developing a competitive business case, selecting the right service provider, securing a solid proof of concept during the Christmas period, navigating the contracting and negotiations process, and transitioning activities to an offshore BPO service provider.
Response
We adopted a pragmatic approach, leveraging existing work and market reach. This joint undertaking kept TNT Post in control while we drove and challenged the process. Our staged approach included sourcing discovery in September, business case development in October, and a proof of concept and evaluation from November to January. Three providers ran a real-time video coding POC with 100 FTEs each from Mexico (ACS), India (TCS), and the Philippines (SPI). Contracting and negotiations led to the selection of SPI as the preferred supplier. By February, the migration of the video coding process to two SPI delivery centres in the Philippines (primary) and Vietnam (secondary) was underway.
Outcomes
We secured Work Council approval for outsourcing the video coding process (~250 FTEs) and contracted SPI to take over the activities. The majority of video coding now takes place on a real-time basis (<28 seconds). Significant cost reductions were achieved, including a 100% reduction in the cost base, 10% centralization, 30% efficiency gains, and 50% wage arbitration, resulting in a new cost base of 20%. Additionally, we supported the setup of TNT Shore BV.
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