When it comes to supply chain innovation and efficiency, Telefónica O2 UK is at the top of its game after winning not one, but three, much-coveted European Supply Chain Excellence Awards in 2009. Leading the team is general manager of supply chain Nick Lefever, who is a strong believer in the importance of customer satisfaction in creating a successful supply chain. “My team’s raison d’être is to ensure that our customers get the products they want, when they want, where they want them, while minimising the capital we invest in stock and, of course, the associated operating costs.”
“The challenge,” he continues, “is embracing the ever changing and demanding needs of the customer”.
In fact, it was this customer-centric ethos which went a long way in helping O2 secure the awards. The judges said: “[O2] is leading the way with its groundbreaking approach to customer service and through the strategic realignment of its supply chain.” The judges also stated that by proactively managing the end-to-end customer experience and its product portfolio, O2 was able to “reduce the cost of returns to the business and so made a significant reduction in overall inventory within the supply chain to best-in-class levels.”
The telecoms company was awarded the “Sourcing & Procurement” and “Hi-tech, Communications & Electronics” prizes, as well as winning the ultimate accolade of “Overall Winner”.
“We were delighted, and somewhat surprised to win the “Overall Winner” award too,” says Lefever. “We had some impressive competition and it’s great to think that the awards are across all industries, not just our own. It has given the team a tremendous boost knowing that what they are doing is at the leading edge of supply chain practices.”
But Lefever will not be resting on his laurels. “It’s a tough ride to beat this elevated position but we know that to remain on top we have to keep pushing the boundaries of what we do.”
Over the coming year, O2 will be steaming ahead with its vendor managed stock programme. It has already made the switch to vendor managed replenishment and inventory commercial models, and is now set to begin pilot schemes for vendor managed availability, which Lefever believes holds “exciting opportunities” for both O2 and its suppliers.
Across Europe the company has a best practice programme which standardises the best parts of each of its supply chains. The next step will be to roll out a similar programme across the whole of the Telefónica group, “no small task,” says Lefever, “owing to the very different distribution models and cultural differences”.
In addition, the company will be trialling several pre and post sales propositions, as well as continuing to focus on the environmental agenda by working with its partners and suppliers on a number of projects to reduce waste and consequently save money.
“From customer feedback we’ve found that there is too much packaging, too much empty space inside the box, too much paper and often unnecessary accessories and cables. We’re also pushing for a single charger across all brands so that a charger might not even need to be automatically dispatched each time a phone is.”
Keeping the customer happy seems to be paying off. Telefónica Europe’s total customer base increased to 53.9 million in the first quarter of 2010, a 15.5 per cent increase year-on-year, plus it reported a 3.6 per cent rise in total operating income before depreciation and amortisation (OIBDA) to £761 million. In the UK alone OIBDA was up 7.3 per cent.
Collaboration with like-minded organisations is another thing the company is keen to look at, however Lefever stresses that “the buzzword is used all too frequently without the desire to truly deliver a collaborative and more efficient operation”.
He reckons that if he could find a company that had similar aspirations and skills it would be “a fantastic conversation to have as it could only benefit our own bottom-line”. And he would not be averse to collaborating with competitors – if the fit was right. “It requires a degree of maturity and confidence which we’ve so far yet to find, but it’s been done in the grocery and pharmaceutical sectors so there’s no reason why it shouldn’t work in our sector too, but it would require a most mature approach.”
Lefever has now been working in the telecoms industry for more than 22 years, after starting off as a repair engineer at Motorola “for the kind of phone you have to carry around in a suitcase”. But it is an industry that suits him well, and as such he says: “I’m going to continue to find challenging roles that best suit my abilities, but I hope to stay in this
Lefever studied Electronics and Telecommunications at Southampton, before starting his career in the design and development of the UK’s first commercially available satellite television receiver.
Two years later (22 years ago) he moved to Motorola as a repair engineer, working on the very early fixed and portable analogue cellular telephones.
Since then Lefever has held a number of senior roles in smaller organisations, including managing director of a mobile phone repair company.
He joined O2 two years ago from 3 UK where he was supply chain director for five years. Before then he worked for Vodafone twice: once as a senior operations manager and once as head of logistics.
Between these roles he did a 12 month contract for what was then BT Cellnet (now O2).