Growing your business value is about value optimization. A foundational component of value optimization is creating and implementing solutions or systems. In recent years companies have spent millions of dollars on investing in systems to track and report on their reverse logistics efforts and practices. The reality is that many of these systems are inadequate and inefficient; therefore resulting in missed opportunities in value optimization. What makes a system inadequate an inefficient? Discontinuity.
Reverse logistics processes are not neat and tidy, rather they cross departmental (and budgetary) lines. While many companies have solid systems in place to track and report on reverse logistics efforts and practices in each/by each department, few have successfully implemented a system which is integrated across departments. This siloed approach to reverse logistics results in inefficiencies, waste, duplication, and lost revenue. The solution – an integrated system that takes a holistic view of the data chain and is inclusive of communication not just in theory, but in practice.
The idea of putting a system in place that captures data from across departments and data chains may seem daunting – not only in terms of time, but also in complexity and in expense. The reality – it’s worth the headache. How worth it? One ReSolve customer was able to work with the company to put in place a new system – one which enhanced communication and collaboration across departments and, in doing so, added over $1 million, annually, to their service center’s bottom line. How did they do this?
ReSolve’s customer solution team developed a custom tailored program that began with inspecting and testing the customer’s returned HDDs and found that a large portion of them were actually NFF, or “no fault found.” After a thorough and complete visual and mechanical inspection, the drives were erased to DoD specs. ReSolve was then able to redeploy the much-needed NFF high-capacity drives back into the customer’s service inventory. Instead of paying hundreds of dollars each for brand new drives, the customer is now paying a minimal service fee and reutilizing perfectly good drives from its own returns stream. In addition, ReSolve is also able to remarket the customer’s NFF drives that were no longer needed to support ongoing repair and warranty requirements. This has added more than $250,000 to the customer’s bottom line each quarter, bringing in a significant stream of unplanned revenue.
Where to begin? Start by taking a good look at your company’s reverse logistics processes and systems. What is happening in each department? Is there overlap across departments? Is there communication and data sharing between/amongst departments? If you take a holistic rather than a linear or siloed look at what is happening my guess is that you will be able to identify missed opportunities – opportunities which you can optimize to reduce inefficiencies, waste, and duplication, and to increase revenue.
Kate Lee is the Director of Research and Marketing for Fronetics Strategic Advisors, www.fronetics.com, a management consultant firm.