Using frontier efficiency models as a tool to re-engineer networks of public sector branches: An application to the Hellenic Tobacco Organization

In this paper we propose a framework concerning the restructuring of public sector branches networks supported by tools such as data envelopment analysis. In the absence of reliable and detailed information concerning the effectiveness of the provided services the assessment of efficiency solely on the basis of cost information versus the notional level of demand coverage may lead to serious efficiency misjudgments. To remedy such problems the assessment of efficiency needs to be complemented with external information in the form of prior information concerning the linkage between use of resources and expected provision of services. With such information embedded into the assessment of performance one can reposition the operation of public sector branches seeking radical performance improvements. The problem concerned was embraced from the solution given to the Hellenic Tobacco Organization and the restructuring of its branch network.