reducing electronic & hi-tech product damage in a global supply chain
TRANSCRIPT
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Reducing Electronic & Hi-Tech Product Damagein a Global Supply Chain
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Damage Risk for Electronics Distribution
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Electronics Supply Chain Example - HDTV
Distribution Center
Source: Council of Supply Chain Management Professionals
The longer the supply chain, the greater the risk of damage.
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The average number of times a product is handled
before it reaches its destination
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Damage Risk in the Supply Chain
In 2012, U.S. shipment sales of consumer electronics were estimated to be worth $197 billion and are steadily increasing.
- Consumer Electronics Association
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Damage Risk in the Supply Chain
Shock and vibration are estimated to cause 20% of failures
in electronic products.
-D. Steinberg, Vibration Analysis for Electronic Equipment
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Damage Risk in the Supply Chain
For many hi-tech companies, warranty costs are nearly equal to new product development expenditures. In 2011, an estimated $800
million was spent processing defective product returns.
-Ops A La Carte & Accenture
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Managing Damage in the Supply Chain
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How Can ShockWatch Help?
ShockWatch offers a variety of devices which can help:
■ Reduce overall product damage
■ Provide indisputable evidence of mishandling
■ Act as a visual deterrent to improper handling
■ Promote chain of accountability for all product handling
■ Reduce warranty claims resulting from mishandling
■ Confirm effectiveness of packaging
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ShockLog
Multi-use recorderComplete event analysis
and journey profilingG-View
Threshold alarms for3 axesP
erf
orm
an
ce
Full Analysis Data Recorders
Indicators
ShockWatch Product Portfolio
ShockWatch Label, SW2. MAG, Clips,
Tilt
Single-use Low cost
Go – No/Go
Price
Simple Data Recorders
Increasing Value to Customer
ShockWatch Product Line• Solutions range from simple
indicators through full data recorders
• Customers are able to scale their monitoring needs over time – start with a recorder and scale to an indicator when supply chain becomes stable.
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ShockWatch 2 Impact Indicator
The ShockWatch® 2 is a patented, field-armable impact indicator that reveals the mishandling of goods in the supply chain
A wide variety of sensitivities is available to match customer requirements
Each device is tamperproof and serialized
ShockWatch 2 and Companion Label on product packaging
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ShockWatch Flex
The Flex is a reliable, tamperproof impact indicator that reveals if your product has been subjected to unacceptable handling
Ability to monitor equipment that may lose calibration or products that may be damaged with mishandling
Optimal when mounting an impact indicator is complicated by product shape
ShockWatch Flex mounted to product
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How a Monitoring Program Works
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Monitoring Program
When used in conjunction with companion labels, alert stickers, caution tape, posters, and
communication tools, ShockWatch indicators become a highly effective damage reduction and
prevention program.
To aid in communication with program participants, ShockWatch provides customized letters for
your carriers and customers. These letters describe the ShockWatch program and detail the steps
to follow in the event a shipment is received with an activated label.Posters are available for the sending and
receiving docks. These posters are
another reminder of the ShockWatch
program details.
Alert tape and ShockWatch companion
labels are additional tools that increase
the visibility of the handling requirements
of your package.
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Why Implement a Program?
Create an atmosphere of accountability that increases customer satisfaction
Inform & educate ■ employees on how to properly mount the product■ carriers on accountability and liability to damages while in their
possession
Receive results through receipt records from your distributors & customers
Mitigate risk by providing data that helps managers make decisions
Decrease costs through effective packaging & handling of products
Most successful with collaboration from the carriers & your shipping, warehousing, and packaging departments.
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Estimated Return on Investment Typical ShockWatch users see damage rate reductions of 30-70% within 6 months
Company’s est. total shipments per year
X Company est. damage rate = Company damaged units
250,000 2% 5,000/year
Company’s damaged units
X Avg. replacement / repaircosts per unit
= Current yearly costs for replacement / repair
5000 $300 $ 1,500,000
Company’s units shipped per year
X ShockWatch unit cost = Total ShockWatch investment
250,000 $ 1.00 $ 250,000
Current yearly costs for replacement / repair
x Conservative damage reduction rate using a ShockWatch*
40% decrease in damage equates to savings of
$1,500,000 40% $600,000
• Reducing your damage rate by 17% pays for total investment. A conservative 40% reduction more than doubles your return.
• Not captured in current costs (that may be reduced with monitoring program):• Administration fees• Freight (if furniture cannot be repaired in the field)• Unhappy customers (customer service manpower)
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IncludedInstructions
Identify a champion Train
Apply Impact Indicator
Companion Tools
Typical Implementation Process
Instructions for placement included for each order
Identify a champion to drive development, documentation, training, implementation, enforcement, & tracking
Acquire companion tools
Train necessary employees
Apply impact indicators to outbound shipments
Educate shippers and handlers
Communicate with carriers &
customers
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Who Benefits from a Monitoring Program?
Manufacturers – know where trouble spots are in the supply chain and can take steps to help address the issues
Carriers – have evidence that products were handled with appropriate care during the transportation process
Retailers – increase the amount of saleable product and reduce the amount of time and energy expended to deal with damaged product that must be repaired, replaced, or scrapped
Customers – get the goods they want without the aggravation of product showing up with damage
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Reducing Damage Helps You...
Cut expenditures
Improve efficiency
Increase customer satisfaction