The 3 Toughest Reverse Logistics Challenges Facing COOs
The 3 Toughest Reverse Logistics Challenges Facing COOs
In school, achieving a score of 98% on just about anything puts you at the top of the class. In the real world that is the service supply chain, however, a 98% performance only makes everyone wonder what happened to the other 2%. After all, a shipment arriving on time isn’t news, but a late delivery that shuts down an important customer for 12 hours surely is.
Any sort of high-profile mistake can lead to self-doubt. Worse, it can damage your professional reputation. Instead of counting sheep at night, the typical COO lies awake counting all the things that could go wrong — and adding up the associated costs to the company.
COOs live by metrics and numbers. That’s why meeting and excelling at the following three challenges are so important.
Challenge #1: Controlling Total Cost of Ownership
Accurately calculating TCO in the reverse supply chain can be fiendishly complicated. It’s not a straight line where you add all the steps to get a final cost. The service supply chain more closely resembles a Hubble telescope photograph of a spiral galaxy: cluttered, messy, and a bit blurry.
New units may leave your warehouse on neatly shrink-wrapped pallets, but the return trip is far more chaotic. You need a plan in place to manage this cycle of return/repair/repeat. It takes a lot of time to receive, screen, test, repair, stock, and ship a returned unit. That’s not even factoring in the transportation costs each way. Airfreight charges on emergency shipments can quickly break the budget.
Unless you’re careful, repair functions and reverse logistics activities can greatly inflate TCO.
If your company is trying to manage this alone, you’ll spend a lot on operating costs, capital expenses, personnel, facilities, insurance, and more. A logistics partner who already has the infrastructure and skilled techs in place can help you improve customer service and control costs.
Challenge #2: Meeting Key Performance Indicators
The biggest service supply chain challenge is ensuring the right part arrives at the right place at the right time. Your SLA performance depends on meeting those 4/8/12/24-hour service targets. Your competitors are just waiting to scoop up the business if you fail.
OEMs are caught in a bind. Customer expectations are escalating in the business world. The online consumer experience — online ordering/tracking, free 2-day shipping, free returns — is bleeding over into B2B expectations. Your customers now demand a level of service that not even Amazon can match.
You’re likely to hear a version of that question from your own sales and marketing people when they look at competitors and ask, “Why can’t we do that?”
Maybe you can, but just don’t realize it. The right reverse logistics partner can help you consistently meet or exceed KPIs and customer expectations. Look for a partner who offers services like:
Single-touch test and repair. Many units returned for repair are actually NTF (no trouble found). An in-region test-and-screen program gets spares back into the field more quickly and saves on shipping.
Geospatial modeling. This incredible technology and the conversations it sparks can help you analyze past performance, respond fluidly to current disruptions, and proactively plan for greater optimization and expansion.
End-to-end service supply chain visibility. Access to data that is sent to you as the actions happen and are not batched helps you manage a crisis, minimize transportation costs, and streamline operations.
Flash Global averages greater than 98% on all KPIs, everything from service quality to shipping/receiving accuracy and on-time performance.
Challenge #3: Risk Management and Planning
This challenge, risk management, is all about figuring out your next move.
Sometimes, the circumstances are dire:
A labor strike shuts down a busy port.
A natural disaster — such as an earthquake, tsunami or wildfires — disrupts supply chains across an entire region.
China and the U.S. double down on tit-for-tat tariffs.
A paperwork error has an important shipment trapped at the border while the logistics department tries to handle the problem from 10,000 miles away.
Other times, the risk involves normal business operations. For example, your company is planning an ambitious global expansion and you need a plan to manage trade compliance; support longer, more complex supply chains; and control costs.
This is an area where geospatial analysis and supply chain modeling shine.
A COO doesn’t have the luxury of handling just one crisis at a time or carving out time to plan for future business expansion and development. Everything lands on your plate at the same time — and it all is important. A robust service supply chain model that incorporates geospatial analysis can supply the data when you need it in a format you can use and understand.
As a COO, you face the challenges detailed above on a daily basis — along with many others that are unique to your company. That is why it’s crucial you find a reverse logistics partner who can create custom supply chain solutions that help you solve critical cost, performance, and planning issues.
How Flash Global Can Help
There’s no reason to reinvent the wheel — or the supply chain — when you’re managing risk and planning for expansion.
With operations in more than 130 countries, our logistics specialists and solution design engineers can help solve the problems that keep you up at night. Our in-region test-and-screen facilities, distribution centers, and forward stocking locations are there to help you meet or exceed KPIs and control costs. We can also reduce the legal and financial risks inherent in global trade compliance too. We have the expertise, technology and local connections in the regions and countries where we operate to help ensure adherence to all import/export laws and regulations.
Flash Global is where you are and where you want to go.
The choice is yours. You can keep going it alone or stay with an underperforming partner — either way, you’ll continue to struggle. Or, you can reach out to us and start a deeper conversation with seasoned experts who understand the reverse logistics challenges you face and know how to solve them. Choose wisely.