Managing reverse logistics and depot repair, or all operations related to the reuse of products and materials, is a growing challenge for B2C and B2B manufacturers, retailers and service organizations. Despite the difficulties, addressing reverse logistics issues should be a priority for any product-based service business engaged in aftermarket repair services.
Unfortunately, many companies struggle to grasp the real effects of poor reverse logistics management and their associated costs, or the operations’ impact on the ability to sell incremental products. Even fewer have successfully harnessed improvement opportunities.
Understanding the characteristics of a successful repair depot may be helpful as organizations look to improve and streamline operations. This paper will review a number of characteristics of successful returns operations that your organization should consider when planning improvements or updates to your own operations.
The most successful repair depots are those that can handle a wide variety of transaction types. Unfortunately, managing varying types of transactions presents significant logistic issues and requires a sound enterprise resource management strategy.
The most common transaction types, and their unique challenges, include:
• Return for Repair—the unusable product or part is shipped to a designated repair center with the intent to return that specific item to the original customer once it has been repaired
• Challenges—timely returns, repair turnaround, repair part shortages, turn-around-time
• Return, then Swap—the unusable product or part is shipped to a designated repair location. If the item cannot be repaired, a new or refurbished replacement is “swapped” for the defective item, and this replacement item is shipped to the customer
• Challenges—timely returns, inventory availability, customer satisfaction, product or asset ownership, and warranty and contract integrity
• Advance Exchange—a new or refurbished product or part is shipped to the customer to replace an unusable product or part that the customer returns after receipt of the replacement
• Challenges—timely returns, inventory availability, customer satisfaction, product or asset integrity and ownership change, no problem found mitigation, billing and dunning for overdue part or product returns
• Return Only—an unusable or undesired product or part is returned without any replacement.
• Challenges—excess returned inventory, proper crediting of accounts
• Ship Only—a useable part or product is shipped to the customer with no expected return.
To facilitate multiple types of transactions, the repair depot must have sufficient inventory and replacement parts, implement an effective shipping and receiving strategy, and maintain detailed records of the part’s movement throughout the process.
Meeting these requirements requires a great deal of advanced planning, historical data and real-time information.
TRANSPARENCY AND CONSISTENCY
Providing customers with a clearly defined return and replacement policy, as well as a simple and easy-to-traverse return material authorization, or RMA, process is vital to the success of your repair depot.
Offering this transparency is simply the first step in the creation of an effective repair depot process, however. It is also vital to strategize and draft standard internal processes for handling repairs and returns, as well as discrepancies, and exceptions. The more detailed these standard processes become, the easier they are to follow and to document.
You can maintain transparency and communication throughout the service process by offering the customer regular updates on the progress of their repair. By proactively keeping the customer informed, you help to create a more satisfied customer and limit phone calls from frustrated individuals seeking information on their repair or return status.
COMMITTED TO TRAINING
The success of a repair depot is directly related to the skills and knowledge of repair technicians and logistics personnel responsible for the various steps in the repair and return process. Organizations that focus on providing quality training programs for employees and offer continual opportunities for skill building and advancement are often able to increase the efficiency and effectiveness of repair depot operations.
Employees with comprehensive training are often more efficient and better equipped to handle the most complex repairs and management of depot processes.
ON THE CUTTING EDGE OF TECHNOLOGY
Repair depot operations can be high volume or complex product repair operations with repair complexity. Automating the steps in the repair or return process is an excellent strategy for streamlining operations, reducing human error and reducing costs.
To automate a repair depot to its fullest potential requires a commitment to investing in and maintaining effective technology and enterprise management software.
When investing in technology automation, focus on software and hardware that support the vital processes within your depot, including:
• Diagnostics: The faster your technicians can diagnose an issue, the sooner the problem can be addressed. Providing technicians with the best possible diagnostics and triage tools will significantly reduce the time spent pinpointing issues
• Repair: As with diagnostics, the better armed your technicians are to execute repairs, the faster customers will receive their repaired units. Invest in high-quality analysis and documentation tools, and organizational solutions to keep repairs moving
• Data collection and tracking: Without up-to-date data collection and tracking hardware, maintaining real-time awareness of a unit’s progress throughout the repair depot is all but impossible
• Logistics and shipping: Hardware involved in the efficient receiving, shipping and logistics of the repair depot is vital to maintaining the flow of units into and out of the facility. Integrating with the bar code, label printers, transport shipping systems, and appropriate customs documentation can expedite the logistics function.
Whereas hardware is vital to the efficiency of any repair depot operation, making the disparate systems and hardware throughout the enterprise work together is just as important. Integrating key applications to create a more comprehensive intelligence network is an important step to maximize the efficiency and success of a repair depot operation.
Various software solutions offer the connectivity and management capabilities needed to merge processes and applications. Enterprise resource planning and enterprise asset management solutions provide the power needed to track and monitor virtually every aspect of a repair depot operation from initial RMA request throughout the completion of repairs and return of the customer’s unit.
Considering the characteristics of a successful repair depot is important to improving the efficiency and effectiveness of your own operations. Instilling these characteristics into your organization through technological upgrades, enhanced training or software integration may turn your repair depot into a money-making effort, rather than a simple necessity of operations.
As a Senior Product Evangelist at IFS, Tom DeVroy serves as a service management advocate to maintain high customer satisfaction while continuing to expand the IFS Enterprise Service Management (ESM) footprint. With more than 30 years of service management experience, Tom is well versed in the challenges facing modern organizations, allowing him to offer invaluable insight to service organizations. Tom has successfully provided service operations guidance to Fortune 500 hardware, software and consulting firms, as well as global service organizations.
As a member of the organization’s ESM Center of Excellence, Tom’s insights are deployed to support sales and marketing efforts around the globe.
Tom joined IFS in 2012 with the acquisition of Metrix LLC, where he lead the sales team as Vice President of Sales.
Tom holds a degree in business administration from the University of Wisconsin-Parkside.