Service in the Sharing Economy

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The sharing economy is on the rise as more and more consumers conduct business transactions through platforms like Airbnb to find lodging and Uber for transportation services. These companies have experienced explosive growth in the last couple of years and their financial value is skyrocketing among the investor community.  Indeed, Airbnb’s valuation is at $25.5Billion in their attempt raise an additional $1.5 Billion in funding and Uber’s valuation of $50B is higher than 80% of the S & P 500 companies.

A sharing economy platform is one that leverages information to empower individuals and organizations with information that enables distribution, sharing and reuse of excess capacity in goods and services.

Sharing economy platforms take many different forms, including:

  • Product-service systems – privately owned goods that are shared or rented out via peer to peer market places.
  • Redistribution markets – pre-owned good are passed on from someone who does not want them to someone who does.
  • Collaborative lifestyles – people with similar needs and interests banding together to share and exchange less-tangible assets such as time, space, skills, and money.

 

I also think of a sharing economy platform as having a number of basic elements. First, it uses technology to create a peer to peer marketplace.  Second, they are “open” meaning anyone can exchange goods and services with anyone else.  Third, goods and services are available on demand.  Fourth, payment in full is often made only after the service is delivered in many sharing economy platforms. Fifth, fixed costs are converted into variable expense through the sharing of resources.

The success of Airbnb and Uber has not only led to the emergence of competitors in the lodging and transportation market but also the creation of sharing economy platforms in other industries.  “Uberized” has become a commonly used buzz word in the business world by industry analysts and thought leaders.  This word is often juxtaposed within the question… Is our industry the next to be Uberized?

To a large extent, High Tech Service & Support is far along the path to becoming Uberized. For example, product – service systems like Rolls Royce’s “power by the hour” form that basis of the “Servitization” trend which is gaining appeal in the High Tech Industry.   In addition, redistribution markets have existed for decades within our industry; just think about all the businesses in the IT, Telecom, and Medical Electronics industries that trade used and refurbished equipment.  Collaborative lifestyle solutions are provided through companies like Field Nation, Work Market, and PC-SOS that enable individual field service engineers and small businesses to become a contingent workforce for larger companies.

However, in many ways the High-Tech Service & Support Industry is not truly “Uberized”.  For example, the platforms/solutions I’ve identified above are not truly peer to peer.  They typically involve an intermediary or aggregator that manages the redistribution of products and services. Equipment owners (i.e., end-users) are not leasing or renting unused capacity to other users.  Second, some of these models are not truly open.  There is often a thorough vetting process involved in becoming a member or user of these platforms and solutions.  On the other hand, the on-demand, pay for performance, and conversion of fixed cost to variable expense elements of the sharing economy do exist today within the High-Tech Service & Support Industry

Regardless of where you think our industry is on the sharing economy spectrum there is certainly room for new innovation.   Now it is your turn.  I’d love to get you answer to this question…. Is our industry (i.e., field service, reverse logistics) the next to be Uberized? Please cite examples and share your thoughts on why or why not the sharing economy can work in our industry.  You can also feel free to schedule a strategy session if you have a great idea you’d like to vet or discuss with me in more depth.

A Strategic Analysis of ITAD Trends

ITAD

The data is now in from our large scale market survey conducted on behalf of Arrow Electronics on the subject of IT Asset Disposition (ITAD) trends.  The results validate a popularly held view among IT industry practitioners that ITAD considerations continue to be a top concern for all size companies.   In fact, knowledge of ITAD best practices continues to evolve and improve among C-suite and IT Executives.  However, as one might expect the issues and concerns between the two groups vary somewhat.

Our research also indicates that all companies, regardless of size, are more likely today than in the past to budget for the ITAD process.  In addition, corporations are becoming more aware of penalties arising from improper disposal of IT assets, which has led to an increased implementation of formal ITAD strategies.  While the most important factors for creating an ITAD strategy have remained the same over the last few years (data security concerns, commitment to “Green” business practices, and mitigating legal and financial risks), companies are far less likely to apply their ITAD strategy outside of North America.  It is also clear that companies who have developed a formal end-of-life ITAD strategy are far more likely to have an ITAD provider handle their IT assets when compared with companies who do not have a formal ITAD strategy.

Companies using a 3rd party service provider to manage their end-of-life IT assets are currently very satisfied with their providers.  When choosing these providers, ISO industry certifications are particularly important, with R2 and e-Stewards being the most important environmental standards.  Due to their equal level of importance and credibility, most companies feel that R2 and e-Stewards should be combined into one standard.

While most companies have a data security policy regarding their end-of-life assets, data security concerns are still prevalent.  Data security concerns are particularly high among companies with a formal ITAD strategy as well as companies who use 3rd party service providers.  Most companies use multiple tactics to alleviate data security concerns, which includes using 3rd party service providers.  However, with nearly 2 out of 3 companies selecting a method such as “Delete the file directory on the hard drive” which does not fully eliminate the potential for data security breaches, there remains some uncertainty as to which methods are truly effective.

With most companies adopting a BYOD policy that allows employees to bring at least one device to work, there has been a dramatic increase in the implementation of policies to ensure that company data on BYOD devices is secure during active use.  The vast majority of companies are also implementing policies to ensure that company data on BYOD devices is eradicated once those devices are no longer active on the company network.

Corporate social responsibility/sustainability has also become increasingly important, with approximately 93% of companies expected to have a program in place by the end of 2015.  Companies who currently have a corporate social responsibility/sustainability program in place typically report their program’s progress in their annual report and/or other forms of corporate communication, both public and private.

The cloud is having a significant impact on the purchase of IT assets, with a majority of companies purchasing more assets to support the cloud.  Some of these additional assets purchased likely include tablets, whose use continues to increase.  As a result, ITAD practices and policies will continue a critical topic among C-suite executives and ITAD Managers.

Details of our survey results can be found in the Arrow IT Asset Disposition Trends Report. To obtain a copy, click here.

“Pit Crew” Repair: Atul for Tablet Logistics

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Tablet repair isn’t exactly a matter of life and death. But if we acted like it were, would we be doing it better? If we studied organizations where failure means a lost racing title, a flaming car wreck, or a patient who didn’t pull through, would companies and consumers see more value from tablet sales?

When Atul Gawande addressed a class of graduating physicians in 2011, he told them to leave their ideal of an independent, omniscient doctor in the past, where it belongs. Medicine has grown too big for a single education, he said. The best results come from doctors and nurses who form “pit crews” – who distribute the inordinate time and expertise needed for complex treatments across a team of specialists. People aren’t cars, but when the professionals who fix both look totally different, something is probably amiss.

On it’s glossy face, a tablet doesn’t much resemble a human body, or the hurtling machine that carries one. But tablet repair has plenty in common with high-stakes maintenance, and should take cues from both medicine and car repair.

No pause button

In a NASCAR race, ten seconds of repair means a quarter-mile lead for the competitors. Market research suggests that this is a pretty good metaphor for the tablet industry. Quality might be king, but firms that lag in resale or refurbishment time tend to pay a hefty price. Getting intact tablets back in stock should be a priority on par with getting back in the race.

Integrate or disintegrate

To get back in the race, you need a pit crew. Tablets and cars may not defy one person’s skill or comprehension, but they defy one person’s ability to perform ten services at once. Unimpeded workflow often calls for small and interdependent teams that perform both testing and repair, ideally in the same workplace, and ideally in easy shipping distance from a large customer pool.

But such a team wouldn’t necessarily be integrated, only differentiated. It wouldn’t be a team at all without regular and responsive communication between testing and screening specialists. A growing body of data seconds our call for optimized front-end testing and screening. It wouldn’t do for pit crews to dismantle a working vehicle, before the driver tells them he was feeling lightheaded. Why should tablet repair be any different?

To date only one vendor has fully heeded our call. CTDI’s NightHawk Test System offers the industry standard for reliable and user-friendly functional testing, with assays of tablet connectivity, multimedia capabilities, battery, display, sensors, and system information. And with its front-loading tray system, NightHawk actually can perform ten tests at once. Responsiveness and integration don’t have to come at the cost of throughput. The most intelligent solutions are often the most inhuman.

Speaking of false dilemmas…

Don’t follow the money

Sometimes return on investment doesn’t just diminish – it takes a U-turn. The best hospitals in America are not just the most cost-effective, but among the cheapest. And some of the most expensive hospitals rank near the bottom in patient outcomes. It’s no coincidence that the CTDI NightHawk Test System offers one of the best values on the testing market. We have every reason to think that, by learning from CTDI’s example and applying our recommendations, countless vendors could follow their lead. Schedule a strategy session today to find out how.

 

A Blueprint for Big Data Logistics

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How can big data help reverse logistics?

This is a little like asking “How can duct tape help in an emergency?” According to Blumberg’s Law of Big Data, the answer will be unique to every problem that calls for lots of data. No list of applications can hope to be comprehensive, and no generalization can provide detailed guidance for each case and industry. But that doesn’t mean that a list of generalizations isn’t worth making.

In our last post about big data, we told you that our job is to help you build bridges from the problems you have to the data you need. So let’s draw a map. The challenges found in reverse logistics form an organic whole…not unlike the neighborhoods of Manhattan. And some of those neighborhoods need bridges to the sprawling datasets and powerful analytics that have just recently emerged. Here we imagine a branch of commerce that never sleeps as a City that Never Sleeps, and connect the Big Apple to big data.

Brooklyn

Elegant, austere, mathematical, and once the only game in town, the study of service supply chains could reap huge dividends from big data. The quantitative tools of chaos, fluid dynamics, and traffic theory can be used to model the flow of goods and currency in forward, reverse, and their confluence. Where the conceptual framework of an Enterprise Resource Planning (ERP) or Supply Chain Management (SCM) system meets modern data collection and storage, there is an inviting playground for data scientists. Logistics experts from every specialty can now reach out and touch the crisp contours of service flow as they evolve minute-by-minute. With help from operations research, consultants can design safeguards against bottlenecking, turbulence, state transitions, and other logistical nightmares that can arrest normal service for days on end. Big data can also resolve long-term rate distributions with greater precision, allowing firms to make homeostatic adjustments and keep service delays within tolerance.

Triborough

Quality control in reverse logistics is a different animal. It’s not a true field like its manufacturing namesake, but the busy crossroads of a few nameless subfields. What unites them is the goal of recovering value on resale goods…at a lower cost than making them from scratch. Quality control in forward logistics has its hands full churning out a uniform, working product in the controlled conditions of a factory. If your products come from the messy world outside factory walls, you’re going to need more hands. Who can say exactly what an item may have been through before its warranty was up? Maybe a malicious eight year old took it apart, stole the hard drive, replaced it with its weight in dirt, and then lovingly reassembled the product before polishing the screen. The only way to quell such paranoia is to perform every test that the industry can offer – in other words, to replicate the US healthcare system on returned products. The name of the game is detecting tiny but consequential probabilities, and making testing protocols that reflect them. For that you’ll need lots of data.

GW

The science of long-distance shipping costs should take Manhattan’s longest bridge. When companies pay for shipping, they have created a thorny optimization problem, in which the cost of building and running maintenance centers offsets the cost of longer shipping distances…to a point. Both parameters are bound to evolve with the size and geographic distribution of consumers, and may be abruptly reset by the closure and creation of mailing routes. In the war rooms of service management, big data will provide plenty of actionable intelligence.

Queensboro

Like Manhattan and Long Island, forward and reverse logistics are too rarely integrated. Where auditing and other conventional probes fall short, product flow in forward and reverse supply chains can monitor product screening and satisfaction. Robust baseline measurements for the magnitudes and ratio of forward and reverse product flow can serve as a performance index for front-line screening. With enough data, deviations from baseline can be a real-time window to the effects of reorganization and new service protocols. Similar metrics could pave the way for a revealed preference analysis of product features.

Manhattan

The tension between customer satisfaction and short-term revenue calls for a subtle feat of engineering. If you match the rate of salvageable returns with the rate of resale, you eliminate free replacements, but at a greater risk of issuing faulty products. If your resale standards are uncompromising, resale may not cover replacement, and if a dynamic bottleneck forms at testing and repair, those may become sunk costs – insult to injury! Long-term, conditional rates revealed in big data analyses can control for these risks by setting a time range on testing and repair – lower bound to limit defects on resale, and upper bound(s) to keep repair congestion syndrome at bay.

Eager for details? Get in touch for a consultation, and we’ll see how seizing the data can make you an industry power broker.

 

Thou Shalt Not: Reverse Logistics Sins in the Tablet Industry

moses

 

“Moses then turned around and came down the mountain. He carried the two covenant tablets in his hands….When he got near the camp…he hurled the tablets down and shattered them in pieces at the foot of the mountain….The Lord said to Moses, ‘Cut two stone tablets like the first ones. I’ll write on these tablets the words that were on the first tablets, which you broke into pieces.'”

That’s right: Moses started reverse logistics for tablet repair. We doubt his CV needed it…

We also doubt he would recognize the field today. Tablets are a bit cheaper and have some new capabilities – though turning to sand, summoning angels, and melting faces are not (yet) among them. The market has also grown; archaeologists find it far simpler to locate modern tablets, and most tablets are, in fact, easier to have delivered if you don’t live on a mountaintop.

Above all, manufacturing firms are not almighty, and that’s what makes things interesting. Tablets don’t do well when hurled to the floor in anger, but inconveniently, most returned tablets have not been. Yet any manufacturer who plans to stay in business must swiftly process every tablet returned under the warranty, maintaining efficient product flow for resale, repair, and disposal options – to say nothing of replacement. And any manufacturer who plans to thrive must look under the humming hood of customer service, and check that the engine doesn’t waste fuel. The tablet industry has gone from zero to 60 in the blink of an eye, and shows no sign of slowing, but with that kind of speed comes unpredictability, and tablet repair is already associated with distinctive logistical problems.

Put simply, explosive growth means outgrowth. Take the scarcity of regional maintenance facilities. A behavioral economist might say that the cost associated with building them is more certain, tangible, and discrete than the cost of shipping without them – which is nonetheless higher. This may help account for an industry-wide failure to drive down aggregated shipping and facility costs, by investing in far-flung sites for cleaning, screening, and repair. What’s clear is that the customer base for tablets has outgrown the maintenance infrastructure, with expensive consequences.

Market size has also outgrown screening efficiency. The combination of high model turnover and overwhelming choice belies an immature market, and the result is a high return rate from “buyer’s remorse.” Many support organizations routinely incur avoidable costs from inefficient testing and repair, usually through a third party service provider (3PSP).

Weak front-line screening and diagnostics represent a third revenue sink. Though robust technical support boosts customer satisfaction and limits frivolous transit and testing costs, the tablet industry has been head-scratchingly slow to catch on. Industry standards that were ubiquitous in the “PC era” are still percolating. Until the tablet industry heeds the unwritten commandments of screening and diagnostics, it will be smitten again and again by its reverse logistics supply chain.

These inefficiencies are easier discussed than solved. You may even be tempted to smash your iPad in frustration, or to mail it to California so a 3PSP can check whether it’s been smashed. We recommend taking a few deep breaths, and tuning in to our upcoming posts from Blumberg Advisory Group on the tablet industry. We’ll give you our take on how companies everywhere can optimize forward and reverse logistics velocities, hold down costs, and face the future in top gear.

 

How is the Liquidation Market Evolving?

liquidation

The Liquidation industry has changed a great deal over the past ten years or so. What was once a marketplace built upon relationships between buyers and sellers as well as price of inventory has shifted its focus towards the optimization of excess inventory. These days, its all about sophisticated methods for repurposing that excess and recovering the value within distressed assets. Retailers and Manufacturers (i.e., suppliers) now have a wide variety of options when it comes to liquidation of excess product. Suppliers need their vendors to act as trusted business partners now more than ever. What do vendors, retailers, and manufacturers need to know about the changing landscape of this industry so they can maintain a competitive edge?

The Importance of Information Technology

As technology grows more and more powerful every year, top-tier IT has become increasingly important to operate complex systems like transactions, purchasing trends, and inventory management. Liquidation vendors such as LSI, B-Stock Solutions, and Optoro have all utilized information systems to help them more efficiently manage their businesses. 

Liquidation Providers as Strategic Partners

Suppliers have recently realized that Liquidation is essential to exposing their product to budget-conscious consumers. They are now effectively championing these secondary channels. There are even a number of suppliers who are branding the liquidation platforms managed by 3rd Party Providers so they can sell liquidated products at a premium price. 

Self-Service Liquidation Models

Nowadays, as opposed to sending distressed assets from retail locations to a return center and then to a 3rd Party Liquidator, suppliers are trending towards self-service auction models. This is a solution that reduces logistical handling fees as well as transportation costs because it gives retails and manufacturers the freedom and flexibility to sell products directly from their own return centers. This method also allows the retailer or manufacturer to mark up the price of these products because they have effectively cut out the middle man.

Suppliers Need Flexibility and Options

Liquidation used to be all about selling products to the highest bidder, but no longer. Now, the primary focus has shifted to the optimization and flow of assets in the secondary market. Suppliers want options and flexibility when it comes to how, where, and to whom their products are sold. Its likely that a supplier might utilize multiple liquidators and look to their vendors to manage B2B and B2C liquidation platforms. Its also not unheard of for a B2B liquidation vendor to release a portion of the inventory, on the suppliers orders, to a competing B2C vendor. 

The new rules of the Liquidation marketplace dictate that vendors ought to have strong capabilities in IT management, e-commerce, quality control, and customer service. In particular, a vendor who has a firm handle on software and services has the opportunity to gain a competitive edge. Suppliers too are changing up the game in terms of how they approach the management of their liquidation channels. Suppliers must keep optimizing the flow and value of their products in the reverse logistics supply chain while continuing to build their brand; this demands that liquidation methods be factored into more decision-making than ever before. 

To learn more about how your company can grow to meet the demands of this continuously shifting industry, visit our site today and schedule a consultation for more information about trends and best practices.

Innovating Reverse Logistics in the Pharmaceutical Industry

pills

As the former chairperson of The Medical/Pharmaceutical Industry Committee at the Reverse Logistics Association (RLA), I have studied at length the unique challenges of the reverse flow at various pharmaceutical companies.

Pharma industry manufacturers, like consumer technology OEMs, have an opportunity within reverse logistics to redistribute products where they might find greater value, nip potential quality issues in the bud and prevent defects, as well as eliminate the amount of hazardous waste being released into the environment. Pharma companies can also recover and repurpose materials from expired products or those that no longer have economic value. An efficient Reverse Logistics plan can dramatically improve a pharma companys revenue in addition to their bottom line profitabilitynot to mention the potential for increased customer satisfaction and bolstered opportunities within the marketplace.

Some of the trends Ive noticed throughout the pharma industry in regards to Reverse Logistics are:

Disposal & Destruction

How can companies implement cost-efficient (and environmentally sound) methods to destroy and dispose of old products? 

Recall Management

Pharma companies must develop procedures to handle recalls efficiently and proactively. Its also very important to keep public opinions and customer satisfaction positive throughout the procedure. 

Restocking and Rebalancing Product

Its vital to have processes set in place to handle the returns of overstocked items and quickly move these goods to markets where they will be in higher demand. 

Asset Recovery and Liquidation

Materials like plastics found in packaging material have a lot of lingering economic value that ought to be capitalized upon. Its important to recover this type of material and find channels through which to repurpose it. It might also be contributed to regions suffering through economic crises, especially goods that still have useful shelf-life but are no longer being sold as intended. 

Optimization of Transportation and Shipping Costs

Leaving your transportation un-optimized, in any industry, is a major blow to your businesss reverse flow. In the pharma industry, like so many others, its all about identifying new strategies for shipments that result in both increased speed and reduced costs. How can your company further utilize the assets and resources accessible to you? 

Its true that pharma companies are expanding and optimizing their reverse logistics processes across the globe, and there are regulations that pharmaceutical companies in particular must adhere to. Reverse Logistics for all methods of distribution in the healthcare industry is mandatory. The reverse flow of any expired or non-saleable medication must be very carefully regulated and documented to ensure proper disposal, but its also important to keep detailed documentation of these processes in order to take full advantage of potential revenue opportunities. Pharma companies often dispose of a great deal of material that could be repurposedthey are often leaving money on the table. 

Schedule a consultation with us today to get more insight about the specifics of Reverse Logistics as it relates to the pharmaceutical industry. With todays increased environmental and safety concerns, not to mention a slew of new United States healthcare laws, theres never been a better time to optimize your Reverse Logistics System and re-strategize. 

Reducing E-Waste: Good for Marketing and The Bottom Line

e-waste

According to the EPA, over 2.5 million tons of electronic waste are produced each year, making it the fastest growing form of waste in the US. Electronic waste, or “e-waste,” is defined as discarded electronics, including but not limited to computers, mobile phones, and TV sets. This also includes used electronics being processed through the Reverse Logistics supply chain that are being salvaged, recycled, resold, or disposed of.

Improper disposal of e-waste is a very real challenge facing the manufacturing and consumer electronics industry today. E-waste is considered not only hazardous to the environment but also to the human population: electronics’ components typically contain lead, a neurotoxin, and cadmium, which is a carcinogen that can cause lung damage and kidney failure. Hazardous waste may also leak toxins like mercury, beryllium, and arsenic into the ground and water. In large amounts, especially in landfills, these discarded parts have proven to be highly unsafe. 

Though a growing number of states have enacted laws to manage the disposal of e-waste, the United States does not have a federal system it adheres to like that of the European Union, for example. By law, any manufacturer in the EU is held responsible for its own safe disposal and must follow a “green design” initiative for electronics design (meaning that there are limits to the amount of lead, mercury, and other harmful toxins that can be present in these devices). There’s also a system referred to as “take-back”, which requires manufacturers to implement e-waste collection and disposal infrastructure. Here in the USA, there’s a lot of pressure on businesses to to implement strict policies for reducing E-Waste in their Reverse Logistics processes and carefully monitor their own progress. But it’s to their benefit to do so. Not only do sustainability programs have a huge impact on a business’s bottom line, but, in general, people want to do business with a “greener” company nowadays. It’s good for marketing and makes perfect sense financially. But it can be difficult for businesses to individually streamline optimal solutions. 

A great example of the way businesses are cracking down on e-waste and developing innovative new solutions is Sprint’s phone recycling program. Their sustainability efforts have  saved them over $1 billion in excess costs through design, recycling responsibility, and maximizing a device’s useful life; at least 70% of Sprint’s electronics will meet Sprint’s meticulously detailed environmental criteria by the year 2017. They also put a great deal of emphasis on their refurbished devices to ensure high quality and long life so they don’t end up back in the reverse supply chain. Their brand has now become synonymous with “green design” among industry insiders, which has boosted their image and sales.

Sprint’s Buyback program is a great model for the ways a consumer electronics business can reduce e-waste and significantly cut costs. Sprint will accept any used mobile device, even if it’s from a different carrier and in less than perfect condition, and offers its customers up to $300 per device. A great deal of these old phones can be refurbished and updated, so Sprint tests and sorts each one accordingly. A lot of these refurbished phones are sold overseas where the older models are in higher demand. The devices Sprint cannot refurbish and resell are either salvaged or sent to 3rd party recycling vendors who harvest raw materials from the devices, like metal and plastic, to be repurposed for a huge variety of other products. 

One of the many ways the Blumberg Advisory Groups helps businesses with their Reverse Logistics Management is in the department of e-waste reduction. Visit our site to learn more about the Reverse Logistics services we offer, especially if you’re looking towards a more promising, greener future for your business. Remember: environmental consciousness doesn’t have to feel like a burden, especially in this day and age, when it can only serve to boost your company’s potential even further.

Viable Solutions to Service Lifecycle Management Pain Points

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The manufacturing industry has become highly competitive the past several years, with much of a companys success hinging upon service delivery quality and efficiency. Theres more value placed upon services than ever before, thanks to an increase in global competition, companies that try to use their existing capital equipment for as long as possible, and the fact that equipment buyers now demand business solutions whose outcome is a combination of products, services, and performance benchmarks. The unpredictable economic times weve endured the past several years certainly havent made any of this any easier.

As a result, OEMs have started viewing the business processes of SLM the same way they might have previously for Supply Chain Management and Product Lifecycle Management. Processes like spare parts management, returns management, knowledge & content management, and depot repair are just a handful of the areas in which OEMs are enforcing SLM optimization efforts. 

Although there have been huge strides made in the service technologies field, there is unfortunately a pervading sense across the industry that these vendors are not providing optimal service, that the investments havent paid off. Studies show that from 2001-2009, Customer Relationship Management (CRM) failure rates reached a peak level of 70%, tapering off to whats still a staggeringly high average of 50%. ERP implementations are also falling short of initial expectations. So what, exactly, has been happening?

Common Pain Pointsin Service Lifecycle Management illuminate a lot of whats been going wrong. Through these primary pains, we can see that sometimes SLM can seem like a disjointed network of technologies and business practices, with no unifying thread, no checks and balances, to keep everything running efficiently. A few of the most common Pain Points service executives face include (but are not limited to):

-Field service and logistics not optimized (Results in low profitability and low customer satisfaction)

-Inability to manage/control service business day-to-day (Business is often run as a product business instead of a service-based one)

-A need for real-time control over parts and personnel in the field (Results in slow response time to customer needs in the field)

-High cost of logistics and inventory (Results in constant purchasing of new parts as well as parts not being where they need to be when they need to be there)

-Inability to manage the business strategically (Low customer satisfaction, low employee morale, and low revenue growth)

The solution, in broad strokes, is systemic optimization, that elusive unifying thread, a spine to keep everything standing upright. These businesses require a sequential, organized service technology system that gives executives the power and tools they need to effectively profit from post-sales service. Businesses often achieve optimization in one area, but not all of them, resulting in what can feel like a less tangible form of assembly-line bottlenecking. Its important to keep the domino effect of all these processes combined in mind. 

This infographic helps illustrate how systemic optimization across processes can have a symbiotic, positive effect on the business as a whole.

SLMinfographic

To learn how the Blumberg Advisory Group can help your business achieve this kind of Service Lifecycle Management optimization, please visit our site and read about our SLM Consulting Practice. We customize our solutions to meet your specific needs and specialize in enhancing your service parts logistics operations quality and productivity. 

Reverse Logistics Sustainability 201: Green is Lean

As I mentioned in my previous post, the “Greenification” of Reverse Logistics is a critical opportunity. While going green traditionally was viewed as an expensive transition with little ROI, today the tides have turned quite a bit. Currently, green initiatives can be seen as wholly beneficial – saving time, money, and the environment in one fell swoop.

I want to discuss how implementing green processes in reverse logistics can in fact create a tighter, leaner, and more cost-effective reverse pathway. In fact, going green has tangible benefits for many key areas of the reverse logistics process, including the following three.

Returns Prevention and Reducing NFF

Studies indicate that consumers would rather do business with a “green” company, but that they aren’t willing to pay significantly more money for that benefit. As I mentioned in my previous post offering possible solutions for No Fault Found, one potential solution could be to improve the returns process by including the consumer more – something that is often neglected by retailers who would prefer to limit customer involvement as much as possible for fear of aggravating them and sacrificing customer satisfaction. I posited that a little disclosure might go a long way, tapping into consumers’ sympathies by indicating reasons why certain information was necessary.

The implementation of green initiatives is the perfect time to put those ideas into practice. Recall that consumers would rather do business with a company they perceive to be environmentally conscious. Customers are looking for businesses that are attempting to lessen their carbon footprint, and are sympathetic to the need to eliminate wasteful practices. Reduction of NFF returns is possible if there are consumer incentives involved in returns policies.Preventing returns has obvious benefits to the reverse supply chain, including lessening the burden of excess volume.

Logistics

Some of the ways businesses can optimize their reverse logistics pathways are actually the same ways to go green. Relocation of warehouses and repair depots can help significantly cut down on time spent in transport, fuel consumption, and carbon emissions. One centralized regional location can reduce fuel consumption, cutting costs while improving the impact on the environment.

Additional beneficial areas include customer satisfaction (locations closer to customers enable expedited service and returns) and improved turnaround time. Faster resolution to problems promotes customer satisfaction.

Repair, Reuse, or Liquidate

When an item is traveling along the inbound pathway, some major decisions need to be made. The OEM needs to consider the revenue potential of selling items as repaired or refurbished units or disassembling them for scrap.

Disassembling items can yield an abundance of usable parts, which can be saved to eliminate the time and money it takes to repair future distressed products. A good strategy must be implemented to address the usability of parts, forecast need for spare parts, and determine the necessary treatment for those parts to be used most efficiently.

Of course, this optimized efficiency of parts contributes to a lessening of eWaste. Discarding less useful parts immediately and saving the most useful ones helps to reduce the amount spent on finding the necessary parts for repairing/refurbishing later products. As an added benefit, lower parts inventory improves warehouse energy use and emissions.

Companies have a unique opportunity now to optimize their Reverse Logistics pathways. Supporting initiatives to “go green” means bringing new efficient practices and cost savings to a much-needed facet of business.

To learn innovative ways to optimize your Reverse Logistics pathway, talk with the experts at Blumberg Advisory Group.

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