The most interesting thing about a magic show is there is no magic involved. “Magic” is just hard work, planning, practice, and lot of activity behind the scenes. Every magician has a signature, crowd-pleasing trick: levitation, cutting someone in half, or even the old standby — pulling a rabbit out of a hat. The audience leaves the show happy and satisfied, having gotten their money’s worth.
When working properly, the service supply chain also looks like magic. How else can you explain how someone manages to receive, review, repair, and return all those units while controlling costs and keeping customers happy?
Let me suggest that successful high-tech companies might also have a signature trick. It’s called test and screen.
The punchline to this old business joke is “pick two.” But a test and screen (T&S) program can give you all three. Here’s how it worked for a Flash Global partner.
The company was experiencing a high rate of returns on a consumer product. It was sending at least 5,000 units a month back to the contract manufacturer (CM) in Asia for screening and/or repair. Usually, the units shipped by ocean. Unfortunately, the manufacturer often had to cover shortages with air freight shipments because so many units were either being stockpiled for shipment, floating somewhere in the Pacific, or waiting for the CM to get around to checking them.
When the OEM came to us for help, we implemented in-region test and screen services at our distribution center and found that 20% of returned units were NTF, or No Trouble Found. The OEM was sailing (or flying) 1,000 units to Asia each month for no reason!
This simple, inexpensive testing and screening process put 20% of returns back into the field right away and saved our partner $1.2 million in freight costs the first year alone. Fast. Right. Cheap.
Hmm…. that does sound like a lot like magic.
Downtime and shortages are among the worst customer experiences. They cost money and may cascade downstream, affecting your customer’s customers.
Many SLAs require 24-hour or 48-hour response times (or less). If you don’t have a replacement unit nearby, then air freight may be your only option. The cost can be 10x the price of ocean shipments. There’s no upside there: Unlike Business Class fares, air cargo won’t earn any extra frequent flyer miles. Without replacement units nearby, however, flying may be your only option.
B2B customers demand great service — and they have long memories. Service affects lifetime customer value and the long-term growth of your customer base. Just take a look at these numbers:
Consider this situation: Your customers can’t support their own customers because some of your parts have failed in the field. You’re covered up with returns, trying to get them shipped out, tested, repaired, and returned. It’s not surprising that your customer doesn’t want to hear about your problems. The issue is how you plan to solve theirs.
An in-region T&S process can help you meet or exceed SLA requirements while controlling total cost of ownership (TCO). Because the units stay close to the customer, they can be quickly tested and returned or swapped out for replacement units with little or no downtime and no extra transportation costs.
So sure, you can spend time apologizing to your customers and presenting an action plan for the future, but wouldn’t you rather get this good news from your team instead?
“We just tested and screened a shipment of returned units and found more than enough NTF to solve the shortage. Let the customer know that we’ll have a technician on-site with their replacement units within 4 hours.”
The right logistics partner can help identify process bottlenecks, troubleshoot quality issues, and work with your team to devise solutions. At Flash Global, that’s the kind of relationship that we have with our partners, and it’s one that most OEMs expect. A 2018 Gallup Advanced Analytics report noted, “B2B customers want the suppliers they do business with to be experts on them, their industry and their own customers.”
That’s not magic. It’s just how an efficient service supply chain is supposed to work.
We know how social media helps amplify customer complaints. An unhappy shopper is quick to fret on Facebook or tell the “Twitterverse” all about his bad experience. That bad review might cost a B2C company a couple of $10 sales, but so what? There are other customers coming in the door.
Not so with OEMs and other B2B companies. They have smaller customer bases and much larger contracts. Losing a single customer could cost $10 million in revenue — or more.
You probably won’t read about a B2B service failure on Twitter (unless it’s a huge news story like the Boeing 737-Max MCAS software), but there are other ways it will damage your brand. The B2B world has its own kind of social media: after-work drinks, trade shows, networking events, and conferences. In the B2B world, repeat business is driven by service. New business is often driven by referrals.
Don’t underestimate how service (or a lack thereof) after the sale can affect your bottom line and future business prospects. Poor service won’t just cost you just one customer; it can tarnish your brand within an entire industry. You could lose business opportunities you never even knew about.
There’s nothing magical about that.
When you need to pull a rabbit out of your hat, test and screen may be just the supply chain trick you need.
Or maybe it’s not. Your company may need a different service from your service supply chain partner. Chances are, we can help with that too. We can deliver replacement parts to the right place at the right time at the right price, helping you minimize overhead and downtime. For example, we provide superb:
When you partner with Flash Global, we handle the details so you can focus on design and innovation while we keep your global customer base happy. We help you reduce the total cost of ownership, grow your customer base with superior customer support, and polish your brand.