In many companies, the reverse supply chain functions less like a chain and more like an anchor. The traditional test, screen and repair process lowers profits and keeps the manufacturer from moving forward in the quest to provide better product quality and improved customer service. A single-touch approach offers you an improved reverse logistics strategy with the potential for significant upsides to your bottom line, quality, and brand.
The traditional reverse logistics chain takes too long and costs too much. In some industries, the “no trouble found” (NTF) rate is 40% to 50%. It doesn’t make sense to keep good product out of service for months and pay transportation costs to and from a centralized service location.
With the single-touch test, screen and repair model, product stays near the customer and is screened for NTF at an in-country or in-region facility. NTF units go back into the field quicker and more efficiently.
The cost savings can be significant.
Those savings went right to be bottom line. The supply chain team members were heroes.
Your team can be heroes too. Consider these six ways single-touch test, screen and repair can improve service supply chain operations.
Because the product stays close to your install base (end customers), there is less handling and minimal “touches.” While the product is at the service center, you might consider taking advantage of the opportunity to use additional value-add services, such as configure to order, to further enhance customer experience.
Returned product is tested for NTF upon receipt at the in-region facility, so those units can be returned to the field or placed in usable stock much quicker than under the traditional model. There’s also a much lower risk of having to replace returned, NTF material with a new product.
You save by:
You not only carry less inventory; you stock the right inventory. Many manufacturers underestimate the hidden costs and impact of replacement inventory shortages. If your refurbished inventory is low, then you may have to replace returned units with new product — which, in some cases, can cost 10 times more.
Consider the difference between a 4- to 8-week repair cycle and a single-touch process that supports advanced exchange and same-day turnaround. What a difference in customer support!
Turnaround time (TAT) is one of the most important metrics for evaluating the success of your returns strategy and is often a key performance indicator for logistics and service departments. Shortening the service supply chain cycle enables you to meet or exceed SLA requirements.
Happy customers come back for more and spread the word about your service. Unhappy customers are even more likely to share their bad experience. Remember the anger of Apple iPhone customers when they faced hours-long waits in stores for service and waited weeks for replacement batteries? Apple has a fiercely loyal customer base, and those disgruntled customers weren’t shy about sharing their dissatisfaction.
Some countries, particularly developing economies such as India and Brazil, require a specific amount of “local content,” so in-country service is a requirement. In-country service also means jobs and opportunities for local residents, generating trust and goodwill that benefit your company.
Data analysis is another important benefit of one-touch test, screen and repair. If 25% of returns are NTF, that still leaves 75% of returns that may require repair or replacement. There’s nothing worse than knowing you have a product defect but not understanding why.
Having your operations, quality, and engineering teams working together using reliable quality data gives you an opportunity to improve your product. If there’s a design flaw, the engineering team needs to know so they can improve the next generation of the product. Solid data combined with open communication can provide you a leg up on your competition.
If you outsource single-touch testing and screening, make sure you find a trusted partner who can help solve problems, add value, and drive product quality and innovation.
Trade compliance cost is an often-overlooked variable in the total cost of ownership equation. A word of caution: Ignore trade compliance costs at your peril. Choose your trade compliance partner carefully because you can be held legally responsible for their mistakes.
Some things to know:
Imagine the supply chain problems you would encounter if critical shipments were routinely delayed for weeks due to customs paperwork problems or other compliance issues.
With Flash Global as a trusted partner, that won’t happen because we’re truly global.
Our global footprint reaches 130 countries. We have in-region experts who are ready to assist with compliance and help you manage your service supply chain. We’ll help you comply with all regulations, support your install base, service clients, and protect your intellectual property.
With Flash Global, you get the benefits of global reach while maintaining an in-country feel. We’re your single-stop partner for single-touch test, screen and repair — and a whole lot more.
Start a conversation today with one of our Flash Global experts.