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An Organization for Customers
As from the beginning of the year 2008, Elcoteq has adopted a new customer-centric organization model. The new model was launched in order to support global communication technology customers better. The company also wishes to simplify and further standardize its existing processes.
Global customers wish to deal with products and manufacture over geographical boundaries. Accordingly, Elcoteq has strengthened and broadened global customer relationship management during the past years.
”We reckoned that the time was ripe to dismantle the geographical organization,” says Mr. Jukka Jäämaa. Tight cost-savings targets added momentum to the reorganization – achieving the targets entailed streamlining the organization and dismantling structures that were surplus to requirements.
The Terminal Products business area was divided into two separate business areas: Personal Communications and Home Communications, which together with Communications Networks now form the three business areas. The business areas are profit centers that are responsible for their own customer accounts and operation’s functions. Each of the business areas will develop its service offering in its own sector, Elcoteq’s consistent processes as the basis. Centralized group functions provide uniform processes for the business areas and oversee them globally.
COO and Deputy CEO Jukka Jäämaa holds overall responsibility for carrying through the reorganization: ”Our previous organization was set up on the basis of geographical areas because at that time our customers were located in different territories. Even then, our customers were global – but only up to a point, as they did not as yet operate on a truly global scale. Our plants also had many local customers.”
The market conditions have changed significantly during the past few years. Elcoteq’s customer base has become more balanced. The company currently has several global customers. The logistics and material flows of many of the customers run through three continents. Meanwhile, the number of products manufactured for individual customers has grown, product lifecycles have shortened and the service offering has expanded substantially. After-market and box-build services, for instance, have seen global growth in recent years. Now that the new organization is in place, Elcoteq is more competitive and capable to respond faster to customer needs. Functions and responsibilities in our company were clarified. This also serves to ensure greater uniformity in group wide processes in the future, too.
”In short, we’re aiming for better all-around performance globally,” says Mr. Jäämaa.
Towards More Focused Service
Focusing on customers plays an even stronger role in the new organization. As the business areas have been set up on a customer-centric basis, they can start focusing their services faster to better match the needs of their clientele – without neglecting the company’s key competitive edge: consistent operations. Elcoteq’s core processes will remain globally consistent in the future, too, but the business areas have the option of building on these processes in focusing the development of their services and operating practices to best cater to their own customer groups.
Evolving Role for the Plants:
Better Serve Customers
From now on, the production lines at the plants will focus even more tightly on serving the customers of the business areas. It’s the role of the plants to handle resource allocation, manage the shared resources and administrative arrangements as part of the global production organization. The customer-centric approach means that the role of the plants in Elcoteq’s global service network will evolve down a different path: some of the local functions of the plants will be assigned directly under the business areas.
Although the new model no longer includes geographical organizations, certain functions will be attended to on a geographical basis as necessary, such as logistic, financial, administrative, HR and legal matters. As sourcing is of vital interest for our customers, group sourcing will be responsible for: Supplier Roadmaps and Strategies, Supplier Management Alignment, achieving Economies of Scale, and Competence and Team Leadership, while the business areas will be focusing on specific customer and market needs: Supplier and Performance Management, Supplier Network for Business Areas’ Needs, Sales Support and Plant Support.
To really serve customers directly and well, we have put strong emphasis on the key customer account staff at Elcoteq. Key functions are Account Directors (AD),
Account Managers (AM) and Product Line Managers (PLM). The Product Line Manager is responsible for taking care of our customer business in the Product Line. He manages costs, profitability and balance sheet, driving customer satisfaction. He executes commitments to the customer. The Account Manager and Account Director handle the global management of current customer accounts.
The responsibilities under the new organization came into force as from the beginning of the year. The kickoff of operations will be supported by a transitional period during the first quarter of 2008, ensuring the efficient and uninterrupted continuity of operations. ”The last year was quite challenging for us. We believe that the overhaul of the organization will help us to establish a robust foundation for further stepping up our operational efficiency. This enables us to provide our customers with a broader service offering – with globally consistent operating methods, what will result in better service with our customers,” says Mr. Jäämaa in closing.
By Elina Nieminen, Photos by Jere Hietala, Published in Elcoteq’s Magazine: EMSNews, 01-2008
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Topics:
Contract manufacturing, Electronics Manufacturing Services, EMS News, IEMS
