Telco TMT case study

Streamlining success for after major telecoms merger

Telco industry, supply chain

Situation

Global telecoms group with revenues of some £45bn and EBITDA of £14bn.

Network and infrastructure operations included 180,000 installations in 25 countries around the globe.

Following a major acquisition, the project goals were to reduce global supply chain costs with regard to parts and logistics and deliver a significant reduction in working capital whilst maintaining or improving on service levels.

Approach

  • Full Potential Analysis: Analysis of key structures, processes and data, conducted remotely, concluded that significant potential was available in the following areas:
    • Restructuring supply base
    • Targeted improvements in prices, costs and terms for key products and services
    • Reengineering of the operating model (key structures and processes)
    • Quantification of improvement potential across all key performance areas including working capital, capex and opex
  • Concept Development: a multi-functional team was established, drawing from the two merged organisations, in order to promote buy-in to the new operating model being developed.  Key activities included:
    • End-to-end value stream mapping to identify costs, improvement potential and priorities
    • Standard data sets were generated across business units
    • OpCo’s were benchmarked against each other to highlight best-in-class performance
    • Suppliers were reviewed in terms of costs, terms and conditions, and performance
    • Key equipment was evaluated from a performance and total cost of ownership perspective
    • Options were developed and evaluated against set criteria to identify the optimum concept
  • Implementation: once a best practice supply chain model had been agreed based on service levels and total cost of ownership, a restructured supply chain function was formed to implement the new model.

Vendor selection and renegotiation provided the foundation of a new, unified way of working with suppliers once vendor selection had been finalised.

A revised dashboard provided transparency, enabled progress against performance targets to be monitored and formed the basis for continuous improvement activity in the future.

Roll-out to all OpCo’s globally ensured delivery of performance improvement targets.

Results

25
%
Opex reduction
33
%
Working capital reduction
27
%
Capex reduction

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