Telco Corporation

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- Should certain customers be asked to take their business elsewhere?

No, Telco should never turn down a potential source of revenue. Customers may choose to leave if they wish, however, if they do not agree with the increased price for premier service. It simply does not make economic sense for Telco to continue to provide low lead and delivery times for customers that actually lose Telco money. Either the quality of this service must be reduced or the price for premier service must be increased in order to offset the lack of profitability of certain customers.

- How should the revised service packages to each segment be introduced to that segment? By the sales force? Should all segments be done at the same time?

The revised service packages should be introduced in a timely manner to each segment at the same time to heed bias. All customers should be given fair notice beforehand allowing them time to consider whether they wish to continue business with Telco or possibly restructure on their end. While the sales force could be the ones to break the news, it may be beneficial for the president or another high ranking officer to release an executive statement regarding the revised service packages. This could perhaps help alleviate some of the enmity between the customers and sales representatives throughout the process.

- Each division has its own sales force, manufacturing facilities, and logistics network. As such, common customers (those who buy from more than one division) place separate orders with each division, receive multiple shipments, and receive multiple invoices. Would it make sense for Telco to organize around customer rather than around product? If so, how would this be done? What would the new organizational metrics look like?

Yes, a restructuring of Telco’s logistics network and delivery service could certainly be advantageous in order to reduce redundant orders and shipments to customers who order from multiple divisions (which is known to be 40 percent of all customers). A restructuring of this nature by Telco would obviously be a large task, but it could help drastically increase efficiency if implemented appropriately. For some of Telco’s largest, most diverse customers, focusing on the customer instead of the product could greatly reduce redundancies and shorten delivery times, which would in turn increase customer satisfaction as well. To assess the value of its new structure, Telco could measure order fill rates, lead and delivery times, as well as overall efficiency and compare them to values obtained from the old structure to gauge the quality of improvement. Telco could also be careful to monitor customer relations under the new structure as communication and dependability are of equal importance to time and efficiency when it comes to customer satisfaction. I personally feel that the elimination of redundant work will prove to be greatly valued by Telco’s customers.