Challenge
For a top-tier computer manufacturer, Norbridge staff was asked to develop a new returns business design in order to:
- Cut costs, assets and time involved in shipping, handling, processing, testing and repair of products returning from the field
- Quantify the business case for change
- Recommend an implementation plan
Approach
- Processes were mapped, cycle times were determined and costs were fully modeled across transportation, operations, assets and warehouses
- Multiple potential returns business models and flow paths were identified and analyzed using the costing and cycle time model developed
- Intermediate findings were carefully validated with key client executives to build buy-in to ultimate recommendations
Value Added
A streamlined / partial direct returns model was proposed
- Partial direct-to-vendor returns
- Reduced inter-site transportation
- Outsourced testing
- Reduced staff and facility requirements
$19 million annual cost savings
- New business model: $12 million (returns processing, scrap, facilities, partial direct return, cycle time reductions)
- Related initiatives: $7 million (finished goods inventory reduction, freight negotiations)
