Our client was a division of a major telecommunications company. The division was generating lower margins than the overall business and lagged behind its analog competitors. We needed to identify key areas for focused cost reduction in the operations center to help improve profitability. The client also wanted to know how they should react to competitor pricing strategy and how their strategy should be adapted as the market evolved.
Our objective was to identify specific cost gaps and key drivers for those costs. Once identified, we were to develop specific, detailed programs to realize cost savings potential and assist management with implementation.
We benchmarked the operation to other players in the industry and other divisions of the company to identify, size, and determine the root cause of different operational performance gaps. We performed process defect and productivity variance analyses in the work center and created a new management tracking system (using existing computer systems) to focus on the productivity variance issue.
These improvements provided accurate workload forecasting/balancing and effective order and productivity tracking. We used the data for focused improvement programs for low performers. We worked daily with operating managers to conduct a trial of the new management system. We used this chance to refine our system and improve management practices.
We identified cost improvement opportunities of 20% and improved productivity variances by 2x across all corporate functions. Overall the company realized productivity improvement in excess of 35%.