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Telefónica
Cutting waste while increasing productivity
For Telefónica CTC, the reduction in the scale of its inventories is just one benefit it can credit to the collaborative work it undertook with VISION*. Chile's largest telecommunications company, Telefónica used to have inventories that numbered 120 million items, valued at US$90 million. After a few months there were just seven million items valued at a mere US$7.5 million. As a result, warehouse space was reduced from 150,000 square metres to 8,500 square metres.
"Before VISION came on board, Telefónica thought of stock as an asset," says Leonardo Diaz, Telefónica's organisation and process manager. "Now it sees it as a liability. A mind shift was created in this organisation and that led to radical savings."
Diaz is a man with a mission - to remove waste and increase productivity within the company. With 7,500 employees, Telefónica CTC provides wireless communications, public telephony, Internet access, data transmission, contact centres and telemarketing services.
VISION has been "immensely successful" in bringing about improved processes within the logistics and call centre departments of Telefónica.
Telefónica reviewed possible advisers and selected VISION as possessing a level of business process knowledge Telefónica found unmatched. Telefónica was under no illusions. Telecom companies are notoriously difficult to coordinate internally, but Telefónica felt VISION would ably address the key issues.
VISION's differentiator
Diaz believes VISION's critical difference is the way that it designs solutions, and then partners with them to implement the new designs. "VISION helps change people's interpretation of what they are doing in a positive way," he says.
VISION was asked to substantially reduce the number of Telefónica warehouses and replace them with virtual warehouses.
Diaz recalls, "Regardless of the amount of cable we stocked we were unable to fulfil our promises to clients. VISION created a process, using Internet technologies, to link us to our suppliers, reducing the amount of cable required in our warehouses to the point where now we don't stock any cable at all; our suppliers stock for us."
Telefónica's logistics department used to employ some 410 people, including 60 contractors. VISION recommended that staffing be reduced to 38 staff and 40 contractors. The department now operates 50% more efficiently after annual savings of US$3.5 million in salaries alone.
"Culture of impeccability"
Telefónica also asked VISION to help build a shared interpretation of precisely defined goals in all its business centres, and to help install a "culture of impeccability" in its relationships with customers.
In Telefónica's call centre operations, VISION set about improving customer relationships by changing the existing interpretation of 'attending customers technical needs' to 'creating value propositions for customers.' The change was supported and implemented on top of improved call centre technology.
A combined VISION/Telefónica team trained 5,476 employees and 372 department heads in 171 leadership and customer satisfaction workshops. Additionally, a team of 48 "mobilisers" were trained to establish and maintain new practices in 38 business centres.
The marked improvement in relationships with customers was real: the number of complaints received went down by 50%.
"With VISION we are doing a very good job. Who says so? Our customers!"
Leonardo Diaz, Organisation and Process Manager, Telefonica CTC.
*This project was completed by BDA. In 2000 the VISION and BDA teams joined forces, in a deal which included VISION obtaining exclusive rights to the use of BDA's intellectual property.
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