Ingram Micro Commerce & Lifecycle Services: An Inside Look at the Mobile Device Lifecycle
Indianapolis, Indiana USA Site Visit
August 2, 2018
By
Karen Erickson
Key Personnel:
Alex Paskoff – Senior Vice President U.S. Mobility
Eric Proctor – Executive Director of Operations
Eunice Lobo Romero – Director of Operations
Eric Schelm – Director of Operations
Katie Wild – Director of Global Marketing
It is estimated that a mobile device depreciates 3% to 5% every month. The Consumer Technology Association (CTA) reports that the top three most commonly owned consumer tech products are (1) televisions, (2) smartphones and (3) notebooks, laptops or netbooks.
INGRAM MICRO: COMMERCE ENABLEMENT & DEVICE LIFECYCLE AT-A-GLANCE
- Sales in 160 Countries Globally
- Reverse and Repair Capabilities in 23 Countries
- 19.6+ Million Square Feet Across 154 Logistics Centers Globally
- Ships 500 Million Units/Year Worldwide
- Authorized Service Provider for 70 Manufacturers Globally
- Six Million Technology Assets Reused and Recycled/Year Worldwide
- Part of the HNA Group, A Global Fortune 500 Company
The Ingram Micro distribution center (DC) in Indianapolis, Indiana is a multi-client facility within the 1.8 million square feet of value-added warehousing space in the Indianapolis campus providing third-party logistics services for manufacturers and mobile carriers. Ingram Micro handles one out of three mobile devices in the United States.
Managing the forward and reverse logistics for a product with a short lifecycle and ever-changing technologies is complex. Ingram Micro provides end-to-end serialized tracking of individual units, proprietary phone support tools (PSTs) and software services (flashing, version updates, pre-programming, and SIM card kitting). Value-added services (VAS) include laser printing of unique identification numbers (UINs), repackaging, kitting, light manufacturing, sub-assembling, re-working, and labeling. Reverse logistics solutions include return, repair, refurbish/recycle and IT asset disposition (ITAD) solutions.
CASE STUDY 1: NEW PRODUCT INTRODUCTION (NPI)
The rapid development and deployment in the technology/mobility segment puts pressure on the supply chain to quickly push innovative products to market. It is a delicate balance of NPIs while staying on top of existing volume. Once the technology and mobile-connected devices are introduced to market, fulfilling orders is a critical step in NPI. Ingram Micro Commerce & Lifecycle Services performs this critical step for 30 Fortune 100 companies.
Ingram Micro Commerce & Lifecycle Services’ mobile device NPI operations consist of a pre-order fulfillment phase and an e-commerce fulfillment phase. NPI pre-order fulfillment can generate 10 to 20 times the average daily volume. Volume can reach 100,000 orders per day. As pre-order fulfillment orders taper off, e-commerce fulfillment orders start to hit the system. During the e-commerce fulfillment phase, the volume of daily orders can swing from lows of around 20,000 to peaks as high as 400,000. All of these orders need to ship same day, with 100% accuracy and serial numbers captured for each order.
To meet this incredible challenge, the Ingram Micro leadership team deployed a continuous improvement (CI) initiative to better align daily NPI forecasts with DC capacity. Ingram Micro leaders worked directly with customers to improve communication to the DC regarding NPI and upcoming promotions. Improved data analytics on the DC side aim to provide more accurate forecasts. As part of the CI initiative, the DC operations team delivers improved packaging for logistics and faster order fulfillment while sustaining the highest quality. Here are some highlights for each of the four pillars of the CI initiative:
Communication: Ingram Micro and its customers formalized the communication process with cross functional teams. The sales and operations planning (S&OP) process between Ingram Micro and its customers created a responsive versus reactive continuous flow of order fulfillment.
Packaging: Ingram Micro’s engineers worked with customers to design packaging that eliminates dunnage while ensuring the product is not damaged while in transit. Additionally, eliminating dunnage reduces shipping costs and increases productivity on fulfilling orders.
Speed: Ingram Micro engineered a Hot Zone in the warehouse to manage the NPI volume. The NPI goods are moved to the Hot Zone, slotted in bin locations and allocated for picking. Additionally, the Hot Zone reduced travel and bottlenecking in the warehouse.
Quality: The Hot Zone was designed and engineered to ensure 100% accuracy on every device shipped. The picking process and technology are a combination of pick-to-light with radio frequency (RF) scanning of each unit. Additionally, each shipment is weighed prior to shipping with a tight weight out of tolerance (WOOT) variance allowed.
The DC Hot Zone solution leverages technology to meet the complexity and volume challenges characteristic of the NPI.
ORDER FULFILLMENT
Hot Zone
The Hot Zone is set up away from the traditional pick and pack area where several pickers can be positioned to pick the product allowing a continuous flow of goods from pick to ship.
CASE STUDY 2: SPECIAL SERVICE REQUESTS (SSRs)
High-tech electronic devices with a short product lifecycle and emerging technology are perfect for product mass customization and/or postponement at the DC. Ingram Micro developed and deployed an agile and cost effective SSR program to meet its customers supply chain strategy. The SSR program allows its customers to postpone customization or configuration of products as late in the supply chain as possible. The customer can then offer more product variations with complex configurations which in turn helps keep inventory low.
The SSR Process: The customer submits a scope of work (SOW) document to Ingram Micro. The SSR SOW is routed through operations, then to the on-site Industrial Engineering team. Finance then approves the resources needed to complete the SSR. Operations coordinates the deployment of the SSR with its customers.
Most SSRs are turned around same day. It typically takes 24 hours to validate engineering, confirm pricing, and ensure all bills of materials (BOMs) are available to deploy the SSR. The SSR submission for approval to the customer includes documentation of the process steps with cycle time and photos. Additionally, the customer receives a run-sample of the finished product/kit and cost per kit, device, unit or finished good.
Once the SSR is deployed to production, Ingram Micro measures the results daily and adapts where needed to ensure on-time completion and on-budget execution at the defined standard of quality. Fast, efficient and cost effective…no hidden fees.
SSR successes include laser printing of UINs, re-packaging, kitting, light manufacturing, sub-assembling, re-working, re-packaging and labeling.
CASE STUDY 3: REVERSE LOGISTICS, IT ASSET DISPOSITION (ITAD)
Almost as quickly as cell phones and mobile devices hit the retail channels, older models are entering the reverse supply chain channel. Consumers return their devices as a trade-in or to be repaired. Ingram Micro then conducts the initial evaluation triage on the return to determine product disposition. The device can then be refurbished for resale or recycled.
Ingram Micro manages reverse logistics services that include products such as cell phones, multimedia gadgets, digital cameras, music players, wearables (wrist bands, watches and glasses), GPS systems, and just about anything electronic and mobile.
Customers consign products to Ingram Micro to enable reverse logistics services. The services include testing and flashing of the unit with software updates, sampling, repair, disassembly, reassembly, reclamation and recycling. Ingram Micro manages the parts inventory/supply chain from procurement to completion of the reverse logistics services. Ingram Micro’s reverse logistics services add value by extending the lifecycle of products and returning products to consumer channels as quickly as possible.
Data collection and retention are critical. Ingram Micro’s Fusion software allows end-to-end tracking of phones and/or components throughout the entire lifecycle. Furthermore, the big data captured by Ingram Micro in the reverse cycle is used for forecasting of replacement parts and helps the original equipment manufacturers (OEMs) better understand why products are being returned.
Site certifications, quality: Reverse logistics for electronics requires rigorous certifications for responsible recycling. The R2 Certification establishes requirements to handle electronic waste responsibly. The Blue Flag Certification is for the coastal environment, water quality, safety and access for all. OEMs also conduct annual audits.
WHAT’S IN INGRAM MICRO COMMERCE & LIFECYCLE SERVICES’ FUTURE?
Ingram Micro Commerce & Lifecycle Services continues to invest in global expansion, infrastructure, automation and business intelligence. Along with Forward and Reverse Logistics Services, Ingram Micro has also been heavily investing in IT Asset Disposition Services for end of life, data security and compliance to serve its customers’ entire product lifecycle.
Ingram Micro also continues expanding into new regions based on customer needs. A good example of such services is Ingram Micro’s re-manufacturing services in Costa Rica. This service provides a cost-effective remanufacturing services while maintaining a product dock-to-stock transit time from the U.S. to Costa Rica in 2.5 days, including customs clearance.
By continuing to focus on the challenges that consumer electronics, and specifically mobility, customers of Ingram Micro Commerce & Lifecycle Services are facing, such as Average Selling Price (ASP) increasing along with longer lifespans for product, driving efficiencies and providing insights are critical to long-term customer success.
Sources: A&A Primary Research, http://www.ingrammicrocommerce.com/