OEMs aren't prepared for returns
Due in large part to outsourcing, electronics OEMs are no longer well
prepared to handle returns, repairs, refurbishment, and redeployment of
many electronics products. Logistics providers handle most of the
administrative tasks of identifying, shipping, tracking, and managing
product sales and returns. A wide variety of companies, ranging from
retail outlets to full-fledged repair depots, provide technical services
and product support. The disconnect between these two core competencies--logistics and technology--drew Jabil Circuit Inc. to UPS's logistics and distribution division.
"Companies are finding it hard to integrate these functions into a
single service model," Hertel said. "In 2010, we had an opportunity with
an OEM in Europe that wanted to combine the process of logistics with
technology support. That brought us to Jabil, and what started as an
alliance has evolved into a more formal structure between the
organizations."For example, a global PC manufacturer uses UPS and Jabil to manage several segments of its supply chain business, he said.
Segment 1 is what we call hub-based inventory, which
includes activities such as ownership of spare parts, materials
planning, warrantee management, managing component vendors, and the
distribution of spare parts to repair sites. Segment 2 is what we
describe as the field-stocking network that holds parts close to the
site of consumption, managing two- to four-hour service agreements,
transportation to and from customer sites, depot returns, and the
deployment of spare parts out to technology centers and end users.
Jabil manages the first segment of this OEM's business. UPS manages
the second. "It's all about the optimization of these resources and
managing the cost structures most effectively," Hertel said.
He and Chuck Henry, senior director of business development at Jabil Global Services, will be our guests at a Webinar, Reverse Logistics: Reclaiming Value in the High-Tech Supply Chain,
on Tuesday, Oct. 9, at 2:00 p.m. EST. They will discuss the strategic
advantages of their relationship and how OEMs are recapturing value in
their consumer and industrial products.