Transcript Document

Reducing Electronic & Hi-Tech Product Damage
in a Global Supply Chain
Agenda
Introductions/Background
Damage Risk for Electronics Distribution
Managing Damage in the Supply Chain
How a Monitoring Program Works
About ShockWatch, Inc.
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Founded:
1974
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Headquarters:
Dallas, Texas
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Distribution:
Global
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Solutions:
Indicators & recorders covering major
environmental conditions: impact, tilt,
temperature, vibration & pressure
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Customers:
2/3 of the Fortune 100 & 1/2 of the Fortune 1000
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Markets:
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White Goods
Industrial
Pharmaceutical
Energy
Electronics
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Furniture
Defense/Aerospace
Food
Communication Systems
Medical Equipment
Damage Risk for Electronics Distribution
Electronics Supply Chain Example - HDTV
Distribution Center
The longer the supply chain, the greater the risk of damage.
Source: Council of Supply Chain Management Professionals
The average number of
times a product is handled
before it reaches its
destination
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
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
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
Managing Damage in the Supply Chain
How Can ShockWatch Help?
ShockWatch offers a variety of devices which can help:
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Reduce overall product damage
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Provide indisputable evidence of mishandling
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Act as a visual deterrent to improper handling
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Promote chain of accountability for all product handling
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Reduce warranty claims resulting from mishandling
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Confirm effectiveness of packaging
Supply Chain Product Portfolio
Performance
ShockLog
G-View
ShockWatch
Label, MAG,
DropSpot,
Clips, Tilt
Single use
Low cost
Go – No/Go
Threshold alarms for
3 axes
Simple Data
Recorders
Indicators
Price
Multi-use recorder
Complete event analysis
and journey profiling
Full Analysis
Data Recorders
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
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
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
How a Monitoring Program Works
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.
Why Implement a Program?
Create an atmosphere of accountability that increases
customer satisfaction
Inform & educate
■
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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.
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
250,000
Company’s damaged
units
X
$1,500,000
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•
Avg. replacement / repair
costs per unit
X
ShockWatch unit cost
$ 1.00
x
Company damaged units
5,000/year
=
$300
250,000
Current yearly costs for
replacement / repair
=
2%
5000
Company’s units shipped
per year
Company est. damage rate
Current yearly costs for
replacement / repair
$ 1,500,000
=
Total ShockWatch
investment
$ 250,000
Conservative damage reduction
rate using a ShockWatch*
40% decrease in damage
equates to savings of
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)
Typical Implementation Process
Included
Instructions
Identify a
champion
Train
Companion
Tools
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
Apply Impact
Indicator
Communicate
with carriers &
customers
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
Reducing Damage Helps You...
Cut expenditures
Improve efficiency
Increase customer
satisfaction
For additional information
Contact: [email protected] or visit
www.shockwatch.com