Service Parts Recovery

The overall cost of product and scrap material returns to manufacturers has become staggering. The Aberdeen Group estimates that high-tech companies alone spend approximately 8% of revenue just to manage their reverse logistics function. With these costs adding to overall operating expenses, how can an organization uncover hidden value from material returns – and recover bottom-line revenue from scrap?

For most organizations, materials are returned from the field through the reverse logistics function – whether they are product returns, damaged goods or service depot returns. In most instances, the reverse logistics model employed is designed to minimize costs, allowing materials to accumulate over time and eventually be disposed of in an environmentally friendly manner. For technology companies for which the average product life cycle is measured in months, the process of recovering value from returns can be significantly improved with a timely inspection process designed to identify hidden value before recycling. Unfortunately for many firms, scrap material already sent for disposal could have become a new revenue stream.

Converge’s solutions development team reviews a technology-driven organization’s current reverse logistics practices to help develop and introduce a comprehensive inspection-process and best-practice model that can review returned materials for no-trouble found (NTF), no-fault found (NFF) and potential warranty returns.

To maximize return velocity, returned materials are sorted, inspected and tested to manufacturer specifications to determine if value can be recovered through warranty credits, intelligent redeployment into the service supply chain or remarketing in the secondary market.

By using a series of in-depth solutions, Converge can help your organization eliminate the inefficiencies of its reverse logistics function through:

• Testing and screening
• Warranty evaluation 
• Material kitting
• Market intelligence reporting
• Remarketing 

If you’re wrestling with the high costs of managing your current reverse logistics function and would like to implement best-practice methods to recover lost revenue from your reverse supply chain, contact us.