As the world's largest technology company, Hewlett-Packard (HP) manufactures and distributes desktop and notebook PCs as well as other state-of-the-art electronics equipment to businesses and consumers across the globe. Part of this process includes facilitating the return and repair of products when necessary. This is the "reverse logistics" part of the supply chain, which can prove a challenge for even the most successful of companies.
For HP, the biggest challenges in reverse logistics were coming from Europe in 2008,where replacing or repairing returned items was proving costly and the cycle time took too long - a factor that could impact customer service. With an average of 500 repair and warranty requests coming in per day, the company needed a way to streamline and expedite the returns process while protecting its high-value products from damage or theft and keeping costs down.
A PROCESS IN NEED OF REPAIR
HP brought in UPS to help the company turn around its commercial off-site repair and returns process for notebook PCs and ultimately solve a larger business challenge. Before engaging UPS, HP was working with another transportation provider using a standard three-leg repair process. This process began with the shipment of an empty box to the end user, who would be left to their own devices to pack the broken item and send it back at a time that was convenient for them. The notebook PC was then repaired and returned to the customer.
This entire process placed too much responsibility on the customer and often resulted in further damage to products and extended the process by an additional two to three days.
"Our previous returns process was inconsistent and lengthy, and we needed a better way that would provide advantages for our business and, most importantly, for our customers," said Mark Stetson, director of global parts supply chain, HP EMEA. "We turned to UPS to deliver a solution that would not only improve efficiencies in the process and drive down costs, but also would make the process more convenient."
THINKING OUTSIDE THE BOX
After evaluating HP's current reverse logistics practices and procedures, UPS proposed a solution that would give the company end-to-end visibility and ability to direct the packaging and shipping portions of the returns process. A key part of this solution was a service called UPS Collect and Return (CAR) that eliminates the need to ship empty boxes in advance or rely on customer-provided packaging, making the returns process easier and more efficient while also helping to prevent shipment damage.
The service, which has been expanded and re-branded as UPS Returns® Pack and Collect, works like this: HP initiates the service with a simple electronic collections request sent to UPS. The next business day, UPS will deliver a return label and specially-designed box to the customer, assist with packing the item, and immediately inject the package into the UPS network for instant visibility. This process ensures that damage is minimized and returns goods will reach their designated destination, which is particularly important when high-value items like electronics are at stake.
"With the UPS Returns Pack and Collect service, we've cut out an entire leg of the returns process, reducing our total cycle time by two days on average," said Stetson. "By choosing an optimal combination of UPS transportation services, we are able to consistently provide a total repair turn-around in as little as five days to our customers."
To further ensure protection of returned items, companies have the option to work with the UPS Package & Design Lab to test the shipment of their products in the UPS Returns Pack and Collect packaging before utilizing the service.
COLLECTING A RETURN ON RETURNS
By using the UPS Returns Pack and Collect service for its applicable products, HP has virtually eliminated the inventory, management and transportation costs associated with shipping empty boxes to customers at the beginning of the repair process. The service allows them to choose between the number of collection attempts UPS makes, which has resulted in a 33 percent reduction in the time HP spends processing additional collection requests.
HP also has seen a 10 percent improvement in overall service levels, according to regular monthly reports. It's no surprise, as the new service from UPS helps HP deliver peace of mind to their customers by leveraging UPS Quantum View® to provide end-to-end visibility into the shipping process. In addition to sending pre-alerts via e-mail reminding customers when a package will be collected, a single customer reference number is linked to both the repair and return shipments to allow HP to use one reference number throughout the entire transaction.
UPS Returns Pack and Collect is now available across Europe, allowing HP to provide service to more customers than ever before. "Since introducing UPS Returns Pack and Collect to our returns program, we've seen a 25 percent improvement in first call resolutions compared to the standard three-leg returns process we were using before," said Stetson. "We're happy, but more importantly, our customers are happy."