Consumer Electronics Manufacturer Case StudyBottom Line: NAVICENT managed a global service center consolidation effort for a leading consumer electronics manufacturer delivering a technical support and customer service solution at a 60% reduction in operating costs. Situation: Our client, the largest manufacturer of PDAs worldwide, was facing rising operating costs and intense competitive pressures driving a continual assault on its operating margins. Entrenched competitors and well funded entrants had service operations with immense scale as well as an offshore presence that allowed them to provide richer service policies (e.g., extended 3\support hours, longer in-warranty support periods, and faster ASA). The client was under pressure to find a way to achieve a step change reduction in costs while improving service levels globally. With labor comprising 60% of baseline costs, global consolidation in a low cost footprint was considered as a way to provide the best blend of cost reduction while enabling the delivery of market-competitive services. Solution: Consolidated the fragmented baseline of 6 vendors with 14 centers into a total of 5 regional service centers in Argentina, Brazil, the Netherlands, India, and the Philippines run by two vendors. The solution provides worldwide coverage for more than 40 products, handling 3.3 MM voice and email contacts per annum across 12 languages in the Latin America, Asia Pacific, EU and North America regions. Risk was managed through the use of fully redundant virtual centers in both India and Philippines. Variable pricing built into agreement accommodated future changes in service policy, increased ability to manage seasonality in call patterns, and better supported future product cycles and market shifts. Implementation costs were integrated into variable pricing to minimize capital outlay of the effort and use of outsourcers with latent capacity in existing service centers - improving speed of execution and value capture. NAVICENT's Role: NAVICENT consultants directed this effort from analysis, design, vendor selection, implementation and operational stabilization. After building the business case for change, the team formulated detailed sourcing and deployment strategies. After leading an RFI/RFP process with over 27 participants, NAVICENT managed the supplier selection and contract negotiations. The team built the blueprint and implementation plan and directed the global implementation with significant on the ground support in each of the global centers. NAVICENT continued to support the effort both onshore and offshore through operational stabilization. Results: Designed and delivered a $12MM cost reduction, a more than 60% reduction in baseline costs, and increased profitability of revenue-based service options. A consistent global footprint allowed "managing out the variation" in operational processes and improved quality and service levels. |
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