newsworthy
short takes
Holland, a subsidiary of YRC Worldwide Inc., now
offers next-day delivery service for shipments moving between the greater Springfield, Mo., area and
the LTL carrier’s Chicago, Joliet, Rockford, and
Wheeling, Ill., service centers. … Vocollect Inc., a
developer of voice solutions for mobile workers, has
expanded its operations in Asia by establishing an
office in Hong Kong. The new office will cover China,
Singapore, Malaysia, Taiwan, Thailand, Australia, and
New Zealand. ... Third-party logistics service provider
Saddle Creek Corp. has been awarded a LEED certification for its new 304,000-square-foot distribution center in Harrisburg, N.C. The building incorporates a number of sustainable strategies to minimize
energy and water use and contribute to a healthier
environment. … Kardex AG, the parent company of
Kardex Remstar International, has now fully merged
Kardex Systems of Marietta, Ohio, (which it acquired
at the beginning of 2009) into its operations. The
organization has been redubbed KardexRemstar,
with headquarters in Westbrook, Maine, and regional offices in California, North Carolina, Ohio, and
Texas. … JDA Software Group is acquiring i2
Technologies Inc., a global provider of supply chain
software solutions, for approximately $396 million.
… Freightliner Custom Chassis Corp. has made
major environmental improvements in its manufacturing operations. The company has gone from disposing of 250,000 pounds of solid waste per month
in January 2007 to disposing zero pounds today. …
A slot exchange agreement involving Evergreen
Line’s Far East-Mediterranean service and Norasia
Container Line’s Asia Black Sea service will provide
Evergreen with weekly sailings between the Far East
and East Mediterranean/Black Sea ports. … BDP
Project Logistics has opened an office in Mexico
City to serve the growing Latin American project
market. The new office will be staffed by Roberto
Lange, formerly project manager in the BDP Project
Logistics office in Nuremberg, Germany. ... The
Retail Industry Leaders Association (RILA) has
partnered with the Coalition for Responsible
Transportation (CRT) to expand efforts to reduce
diesel emissions in and around U.S. ports. … Toyota
Material Handling, U.S.A. has expanded its Aichi
dealer base by adding 11 dealers for its Aichi aerial
work platform (AWP) products. The company now
has 26 dealers for the Aichi equipment, which
includes scissor lifts, crawlers, and wheeled-boom
lifts for a range of indoor and outdoor applications.
Dell finds gold in parts returns
When companies significantly alter their sales strategy, it’s
clear they also have to rethink how they deliver their products
to market. What may not be as obvious is that the shift in
strategy could affect their reverse logistics operations as well.
Consider Dell Inc., the country’s second-largest PC maker
and the company that made supply chain management an
art form in the personal computing world. In the mid-
1990s, Dell abandoned retail stores as a sales channel and
focused exclusively on selling its products direct to customers. The remarkable results that ensued are the stuff of
business legend.
Two years ago, however, Dell resumed selling into the
retail channel in an effort to beef up sales and fend off arch-rival Hewlett-Packard Co., which has since surpassed Dell as
the leading PC maker. Dell’s return to the retail space
changed how it managed its supply chain. The change was
most keenly felt in its reverse logistics operations.
Under the direct-to-customer model, managing reverse
logistics was a relatively straightforward process. Because all
of Dell’s computers were built to order, there was little
excess inventory in the supply chain. When a customer
returned a product, Dell’s policy was to refurbish and sell
the unit.
The return to the retail channel introduced some complications. For one thing, Dell soon found itself saddled with
excess inventory. The company quickly discovered that, in
some cases, the parts were more valuable than the assembled
unit itself. “In reality, a good portion of [those refurbished
units] were not economically valuable,” Matt Snyder, senior
manager of reverse logistics for Dell, said at the annual conference of the Council of Supply Chain Management
Professionals in September.
Recognizing this, Dell created a parts channel. Now, when
a computer is returned, the company must decide whether to
refurbish it or break it down for parts. Refurbished computers are sold either through a Dell outlet or through a broker.
Parts are either sold externally or transferred internally.
Refurbished parts have created a new profit source for the
company, and reverse logistics is no longer considered a cost
center at Dell, Snyder said. Today, the company’s reverse
logistics mission is to “increase revenue-generating opportunities while decreasing operating expenses,” he said.
—Susan Lacefield
In the article “and the winner is …,” which appeared in the
Inbound section of the November 2009 issue, we incorrectly
referred to Virginia Tech as the Virginia Institute of Technology.
The correct name is Virginia Polytechnic Institute and State
University.
oversight
