Wesco

3570 Words Dec 7th, 2008 15 Pages
1. What is your action plan? Do you recommend that WESCO be proactive in Managing its NA program or would you prefer that WESCO adopt a passive approach?

Action Plan: WESCO should definitely adopt a proactive approach in managing its NA program.
A proactive approach in managing the NA program would definitely fulfill the company’s visions of becoming a $ 3 billion company with an average EBIT of over 5% by the year 2000 (from its 1996 figures of $ 2.2 billion company with an EBIT of around 3%.)
Though the current position was not conducive to continue the program further, because the company was already at a loss of complete 2% in their revenue as compared in the previous year, still looking towards a long term prospective this
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 As in the case of WESCO’s success story with an industrial customer in the paper segment, WESCO conducted a complete energy audit and recommended more energy efficient systems for all their plants. They also reduced inventory and implemented EDI procurement.
 Customer’s sometimes even wanted a complete solution and wanted WESCO to handle their new projects in designing specifications and installation of new systems.
 Value is also added in NA projects in terms of managing customers inventory saving customers time and therefore cost. This also helps the customer to reduce their procurement cost and gives the customer the opportunity to standardize procurement.
Thus summarizing, WESCO adds value to its customers in terms of:
• Transaction cost reductions,
• Energy savings,
• Inventory reductions.
This ultimately led to cost savings to the customer.

3. Why do you think the NA program is delivering on its promises?

WESCO’s NA program had been established under the premise that large contracts could mean significant savings for both customers and WESCO. In exchange for giving their EES business to WESCO, NA Customers received competitive, year long, national pricing regardless of volume. Once a client enters into an agreement with Wesco for its NA program there might be good chances the customer might give its EES business also to the company. This
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