It is common practice for most of the multinational firms the last years to centralize supportive departments and keep locally core departments which requires direct contact with customers – Customer Service/Support, Sales etc. Nowadays, most of the companies with global operations centralize their IT, R&D and Production functions for example. The trend in highly centralized organizations is to include also Finance, Logistics, Marketing and Human Resources Departments in the centralization plan. Admittedly, these practices lead to reduction of administrative volume and other costs. However, the challenge for strategic planning has been always what to centralize and what to decentralize. Both strategies have advantages and drawbacks, but the vital question is if these drawbacks put at risk customer satisfaction and if in the long term companies observe how their client portfolio shrinks.
The main scope of the consulting project is to provide more profound analysis of the following centralization practices within the company:
Centralization of specific process – Manufacturers (Customers for CHEP) send equipment (pallets) to their customers (usually retailers). CHEP denotes these retailers as D locations in its glossary. Long procedure stands behind the opening of D locations in CHEP system. Does centralization of the process deprive of flexibility local teams? In terms of administration, cost and customer relationship is there any negative or positive impact?
The research methodology applied in the project is retrieved from different sources in the attempts to present comprehensive results and recommendations. First, primary data from the company software system has been collected and split into two periods 01/07/2013 – 31/12/2014 and 01/01/2015 – 30/06/2016 in order to carry out a collation of KPIs between the two periods.
Furthermore, survey with questionnaires has been carried out among CHEP employees from Customer Service, Sales, Logistics and Asset management departments directly affected by centralization.
Keywords: customer service, centralization of processes, logistics, efficiency, cost reduction, strategic management
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