Customer-driven cost reduction-a case study

The Durban electricity distributor of Eskom faced a daunting task: to meet rising expectations of customer service while cutting costs by 15% over three years. At first, these two requirements appeared irreconcilable. However, the company launched a two-month programme that identified the necessary changes. The programme can be applied in all service industries, as well as utilities. The five step programme developed is described and covers: external review, activity analysis, radical changes, focused changes, and sustainable improvement. The links with business process re-engineering and implementation issues are also discussed.<>