As margins on consumer electronics and technology hardware grow thinner, more executives are paying attention to the significant costs associated with the reverse logistics or aftermarket services process. Much like the forward supply chains, reverse supply chains are increasingly coming under scrutiny for cost pressures and inefficiency. More than just repair, the entire reverse logistics process, from customer service desk to parts reclamation/disposal, is being scrutinized. Along this chain, there is the realization that key function outsourcing is critical. Partners who are experts in different areas of the reverse chain are being selected to handle particular aspects where economies of scale and cost efficiencies can be realized.

Service is provided in the following areas:

• Inbound Logistics
• Testing/Repair
• Refurbishing
• Re-Boxing
• RMA Validation
• Warranty
• RMA Services
• Trade-in
• Surplus Inventory Management
• Product Re-Marketing
• Re-Distribution

 Key drivers creating enhanced importance of electronics/IT reverse chains:

1. Due to product price erosion, OEMs are introducing new products faster, creating greater aftermarket service challenges
2. Environmental rules and regulations like SOX are driving OEMs:
1. To look at ways of turning costs associated with product disposal into profit opportunity via refurbishment, remarketing, and parts harvesting
2. To be more attuned to end-of-life asset disposal issues
3. Customers demand product quality at all levels, including consistent reliability and uptime

Constant product innovation displaces legacy technologies. Displaced technologies, however, are useful; the parts and whole systems are used for aftermarket service for customers wishing to remain on older platforms. The effect increases the TCO for existing technology implementations. There is a greater awareness on the part of OEMs to preserve legacy technology with proper processing.

Key issues associated with reverse logistics:

1. There is greater labor intensity in reverse logistics than in forward chains. Some labor is specialized.
2. Items are no longer treated as “SKU” units, but are treated independently since each returned item is unique in its defect. The exception is global recalls.
3. Automation and metric implementation is critical to controlling costs.
4. With IT chains serial number capture, packaging, collection timeliness, and dispersed collection sites can pose challenges.

Selecting an organization with the logistics skills, service capability, and comprehension of the process that can work integrally with ecosystem partners is critical. Hesstech has the experience in technology and consumer electronics to handle local and national reverse logistics needs.

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