Pareto Analysis

Topics: Customer service, Service, Pareto chart Pages: 11 (3617 words) Published: April 14, 2006
Prepared by: Yiannis Giannopoulos
Individual assignment
Operations management
NYU – Skopje

Table of contents

Executive summary2
Introduction of the company3
Description of current situation3
Possible solutions5
Description of the proposed technique or planned change6
Description of the new situation in the company8
Justification of proposed solutions with cost based analyses10 Implementation plan12
Conclusion and recommendations13

Pareto analysis for improving ISDN service

1. Executive Summary
The national telecom provider, MakTel, faces poor sales of ISDN service for several years. Although the service was introduced e years ago, utilization is less than 50%. Poor sales of the ISDN arise from quality of the service delivery. Applying Pareto analysis about failures in the service delivery shows that the main problem is poor quality of network terminals and unqualified technicians (uneducated) for provisioning of the ISDN service. By reducing the number of suppliers, replacement of all terminals from two vendors that count for 80% of all faults and establishing a commitment of long-term partnership with the best vendors the quality of the service will increase. The other improvement relies on the employees. Well educated, empowered and rewarded employees will deliver excellent quality. Justification of proposed solution shows that in the period of one year the company will have benefit, which will be increased in the next years. An implementation plan is given. An education for technicians for provisioning and customer orientation will be organized in a period of a month. Meanwhile, the procurement department should conclude partnership programs with two vendors only, and operation teams should replace terminals from two vendors that count for 80% of total faults in terminals at the end of September. Continuous measuring, reviewing and improvement of customer service, based on the customers' perception of how well the service is, not on how the company thinks it is, is a crucial factor for improving business growth.

2. Introduction of the company
"Makedonski Telekomunikacii AD" (MakTel) is a dominant provider of telecommunication services in the Republic of Macedonia (RM). In 1999, the company was separated from its predecessor "PTT Makedonija" as a telecom provider. In 1998, the Company has been registered as a Shareholding Company owned by the Government of RM, in order to prepare for the future privatization. In 2001, the Consortium led by the Hungarian telecommunication operator MATAV, Soros and the Greek company CosmoTelco bought 51% of the shares of MakTel, thus becoming a dominant owner of the Company. The Company's portfolio consists of a variety of products and services, starting with telephony services in national, long-distance, and international traffic, including ISDN services, value-added services, public payphones, up to Internet services and complex business solutions. At the end of 2005, the number of subscribers was 580,000, out of which only 6,200 are ISDN customers, which represent only 1,2% of total customers. The Company will have a "monopolistic" position on the market for offering voice services until the end of 2006. Internet business competition exists from the very beginning of the Internet era in the country. The ISDN service is also under the monopolistic position and the Company is a sole provider of it.

3. Description of the current situation
In many households, there is a demand for several phone lines: one for business, one for normal family use, one for Internet, a different one for teenage children etc. In most cases, ISDN is the solution because it offers multiple subscribers numbering, making it possible for as many as 10 numbers to be allocated per line. ISDN (Integrated Services Digital Network) is a service offered by telecom providers. ISDN offers affordable...

References: 1. Berry Leonard, (1980), Service marketing is different. Business magazine May-June 1980, p.451
2. Committed to Quality (2003), [online], British Telecom, Available on, [Accessed 9 May 2003]
3. Heskett James (1987), Lessons in the service sector. Harvard Business Review March-April 1987, p.119
4. Heather Clancy (1995), Resellers find new industry growing from seeds of ISDN, Computers Resellers News, 8/7/95 Issue 642, p.53
7. Kotler Philip, Gary Armstrong et al. (2002), Principles of Marketing. Third European edition, Prentice Hall
8. Kovac Ron (2000), ISDN: Still viable choice
11. Porter Michael (1998), Competitive Strategy. The Free Press, New York
12. Slack Nigel, Chambers et al (2001) Operations Management, Third Edition Prentice Hall, Harlow, England
13. Taguchi Genichi and Clausing Don, (1990), Robust Quality, January-February 1990, Harvard Business Review
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