wcm 2015 optimized lifecycle management

2015®

®

“Optimized Lifecycle

Management”

Michael Schuler

CEO of Veterans

Alliance Resourcing

®

Introduction to Veterans Alliance Resourcing

Aftermarket Service Industry Consulting• Sales & Business Development

• Reverse Logistics

• Depot Repair

• Parts Supply Management

• Software Platforms (ERP, CRM, Service & Resale)

• Service Supply Chain Management

• Product Remarketing & Value Recovery

Staffing Services • Executives and SMEs in Sales, Marketing, IT,

Operations, Purchasing, Logistics, Compliance and Product Remarketing

A Service Disabled Veteran Owned Small Business

®Agenda

Optimized Lifecycle Management

• Returns Management & Product Remarketing

• Service and Parts Harvesting

• Depot Repair, Onsite Repair and Product Exchange

• Technology Refresh and Trade-In Programs

• Understanding the Secondary Market

• Q & A

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Returns Management & Product Remarketing

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In 1994, Micro Exchange and other used PC Dealers bought Truckloads of PC Returns from IBM, Apple and Compaq at 10% of Cost

• Within 3 years, those same loads were recovering 60% of Cost

• Within 10 years, recovery exceeded 80% of original Cost.

• Today, a refurbished iPad sells for 90% of retail (Net Recovery exceeds direct costs)

®


Product Reconditioning

Warranty

Direct Sale by OEM/Retailer

Not a Focus

Fear: Cannibalize

New Product Sales

Costs Applied without Data

Market Acceptance of Used Product

Channel Development

Factors

Impacting

Recovery

$

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Key Performance Indicators

• Net Recovery

• Resale Channel Development

• Total Turn-Time

• Inventory Turns & Charge-Offs

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• Net Recovery

• Gross Recovery less Costs for Logistics, Repair (Labor & Parts), Kitting, Repackaging and Remarketing, (add Warranty Recovery $)

Costs

8% to 30%

5% to 20%

4% to 7%

A

B

C

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• Resale Channel Development

• Diversity of Channels (Retail & Wholesale)

• Quantity of Resellers with Increasing Sales

Wholesale Retail

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• Total Turn-Time

• Average time to repair, process and resell

• Return Privileges to OEM/ODM

• Market Depreciation (as much as 6% per month)

• Inventory Turns

• Turns by Count

• Turns by Dollars

• Charge-Offs

®Service & Parts Harvesting

• In 1994, Service Electronics “SEI” became first sole-source parts supplier to supply all post-warranty PC parts for a major retailer.

• In 1995, SEI was awarded Vendor of the Year saving over $5M in costs, increasing next-day fill-rates to 90%+

• Within 10 years, more than ½ of all post-warranty (retail) PC parts were sourced from secondary market ($500M+).

• “This Part May be Refurbished” become an OEM standard

• Is Parts Harvesting and Secondary Market Sourcing an integral component of your Supply Chain?

®Service & Parts Harvesting

• 15% - 20% of all TV Returns have Broken/Defective Panels

• Cost to Replace Panel Exceeds value of TV

• Annual TV Defect/Service Rates <3.5% of Deployed TVs

• Broken Panel TVs could provide 100% of parts for Lifecycle

• Increased Parts Harvesting and Low Salvage Recovery are Changing the Parts Supply Industry for TV Repair

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Depot Repair, On-Site Repair & Product Exchange

• For over 30 years, the Rental/Lease industry has made Returns Management, Audit, Refurbishment, Repair and Re-Deployment of Whole Units an essential component of their business model

• Shipments of Refurbished TV Cable-box units now exceeds New TV Cable-box product shipments

• Do you employ refurbished product into your demo, product exchange, depot repair or on-site fulfillment strategy?

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Technology Refresh & Trade-In Programs

Sample: Lifecycle exceeds 5 Years, 50% of Parts Needed for Lifecycle are used after 24 Months and Whole Units are Available at 30% of Original Cost, let Customers hold Parts Stock (as Whole Units) for Trade-In

$-

$200

$400

$600

$800

$1,000

$1,200

New 4 Mo 8 Mo 12 Mo 16 Mo 20 Mo 24 Mo 28 Mo 32 Mo 36 Mo

Market Value

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Understanding the Secondary Market

• (Almost) every product sold has a secondary market that can be cultivated

• The value of embracing the secondary market far exceeds any negative concerns i.e. cannibalizing new product sales

• The value of used product is like water,… it seeks it own level. Price must be balanced by availability, demand, condition, risk, terms and resale channel

• There are KPIs that can be applied to show progress

• The opportunity for secondary market growth is based on the delta between cost and resale (and price stability)

• Your service market should be an integral component of any optimized lifecycle management strategy

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Questions & Answers

Michael SchulerVeterans Alliance Resourcing, Inc.2150 S. Central Expressway, Suite 200McKinney, TX 75070Tel: 972-200-5236Cell: [email protected]

wcm 2015 optimized lifecycle management

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