New Breed Logistics Designs and Manages Central Returns Process for Siemens Medical Solutions Critical Parts
Situation
Siemens Medical Solutions is one of the world's largest manufacturers of medical equipment. Because it deals in sensitive, high-value medical parts, a well-managed reverse logistics process is critical. But lack of visibility to field inventory and imprecise, manual processes for returned parts created inventory management challenges. Siemens chose New Breed Logistics to establish and manage a national network to deliver critical service parts to more than 1,500 Siemens field service engineers (FSEs), including the management of returns.
Solution
The parts network includes 48 parts depots throughout the U.S. and a central parts DC and returns processing center in Memphis, TN. Key elements of the returns process include:
Inventory management
- FSE-held inventory is closely monitored to eliminate trunk inventory previously held as a safeguard against poor parts availability.
- New and used parts are linked to a specific FSE in the system. Every new part shipment creates a debit against the FSE, which is eliminated only upon return of the old part.
Shipping
- Every outbound order is sent with a returns label. The FSE notes the condition of the part on a pre-printed form (e.g., good, defective, repairable) and ships it back to the central DC using pre-printed mailing label.
Real-time visibility to inventory and shipments throughout the network
- Integration of New Breed Logistics systems to Siemens SAP and carrier systems. Parts available for use immediately upon receipt at DC.
Inspection and disposition
- New Breed Logistics receives, sorts and dispositions returns from customers and FSEs in Memphis.
- Parts are inspected and, based on established business rules and criteria, are either repaired, repackaged, disposed of, or sent back to Siemens.
- Appropriate financial credits are processed upon disposition.
Results
- Real time visibility for Siemens to FSE's parts-on-hand
- Costly trunk inventory eliminated
- All returns centralized into single location for better control
- Thorough inspection processes resulting in substantial re-use of returned parts
