Case Studies: A Proven Methodology For Success

Segue has partnered with many renowned global brands to solve their most complicated reverse logistics supply chain challenges, ensuring brand integrity and maximum asset recovery. Learn how our Sequential Reverse Logistics Solutions (SRLS) methodology has delivered successful outcomes for a few of our OEM clients.

Company Background

Global Fortune Top 5, major computer Software/Hardware OEM

Issue

Extremely complicated and cumbersome network of brokers, resellers, liquidators, managed by disconnected OEM business groups.  This diverse collection of remarketing companies was being utilized to sell a wide variety of hardware products. The OEM was experiencing extremely compromised Sales and Distribution channels, major impact on A-stock pricing/sales throughput and increasingly fractious Retail/Distribution channel customer relationships. Value recoveries were well below acceptable or achievable levels in most areas.

Solutions Implemented

OEM created an internal group chartered with crafting a global solution to the resolve these long standing issues. Segue participated in a very complex and comprehension RFP that included a competitive field of twenty-three of the industry’s largest and best known Reverse Logistics 3PL’s.  After many months of evaluation and review of our SLRS strategy, Segue was selected as the global lead remarketer for the OEM.  Additionally, Segue has been called upon to support processing operations and has been actuating on a global basis.

Results

Segue has succeeded in executing on all deliverables.  Product categories falling into the at-risk group (excess, obsolete, customer returned inventory) are all being serviced and managed by Segue, streamlining operations, simplifying OEM management resource allocation, channel conflict is virtually non-existent, opportunities to create bundles amongst different product categories has been made possible, brand equity has been completely secured and finally, asset recovery values have increased substantially beyond OEM expectations.  (Global Contract signed early 2015-Present)

Company Background

Fortune 200 gaming company

Issue

OEM had no formal reverse logistics supply chain model in place allowing at-risk inventory to stack.  They would periodically run an auction through a third party that would manage the process.  Product was sold at continuously declining values as each auction produced lower recoveries than the previous due to a number of high-risk issues inherent to auction models. Some of the issues included the following:  low paying brokers primarily making up the buying pool of customers.  Product would find its way into very visible channels (Amazon, e-bay, etc.) at prices that would severely impact A-goods pricing, causing major issues with OEM retail and Distribution accounts.  Product quality was being misrepresented leading to end-user dissatisfaction and impacting OEM brand.  Additionally, the call volume to the OEM service/RMA group increased dramatically as a result, due to the auction buyers sending their customers back to the OEM for customer service.  There were no checks and balances, no process for holding the auction buyers responsible for managing the back-end customer support of their customers, nor any accountability for marketing the inventory at non-impacting or MAPPED prices, and finally the misrepresenting of the condition codes of the inventory itself.  This ultimately became a catch-22 issue for the OEM; either send the customer back to the company they bought the product from and angering the customer, or taking care of the customer at the OEM’s expense.  Value recoveries were extremely low, costs were high, channel conflict was wide and deep impacting A-stock values and sales-out and brand equity was being severely impacted on every level.

Solutions Implemented

Segue was contracted to take on the entire end-to-end RL supply chain program, acting as the return center, inventory processor and remarketer.  Segue crafted a tailored solution, transition schedule, execution process and ongoing management plan (SRLS).  The Business operations were seamlessly transitioned (including all notifications to retailers and distribution customers) without a break in service to the channel partners within 30 days.  Within 90 days, entire channel was cleaned up, OEM returns center costs and processing fees were highly reduced, customer satisfaction increased, product time to market accelerated from every few months to daily, customer satisfaction, confidence and brand image were restored.  As anticipated, asset recovery values more than tripled from previous levels.  (2012-present)

Results

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Company Background

Fortune 50 OEM

Issue

OEM was utilizing a 3PL/Remarketing company to manage their PC Hardware accessories division.  They were not aware of any channel conflict, nor were there any customer complaint issues regarding quality, so the business program carried on without change or disruption.  After several years, finance decided to look at every individual business group, corporate wide.  Under analysis, the OEM finance group felt that their recovery rates were exceptionally low.  They could not get a satisfactory explanation from the incumbent over an extended period of time of questioning.  As a result, they decided to test the waters with an RFP.

Solutions Implemented

Segue was invited into an RFP, competing with 13 of the best known 3PL companies in the industry (including the incumbent).   Segue presented its SRLS solution and ultimately was selected as the exclusive end-to-end reverse logistics supply chain partner.   Segue immediately began the due diligence process of establishing the sales channel while concurrently managing the transitional process required to establish the returns center and inventory processing operations. Through the due diligence process, Segue came to the understanding that the incumbent had been selling all of the inventory in a manner that was not conducive to the best interests of the OEM.  Additionally, the inventory was being sold to a single off-shore company to mitigate any quality or channel concerns or attention; the product essentially disappeared.  As a result, at the time that Segue took over, there was virtually no B-channel in existence for the brand.  The industry had not seen this OEM product (in the B-channel) anywhere, for several years.

Results

Starting from scratch, Segue built an entire B-stock channel for the OEM products, establishing customer buy-in for products they had not been purchasing prior to.  The major challenge was that potential customers find no data or price data in the channel that they could reference in order to analyze the marketability or value of the products.  However, based on Segue’s reputation and our many long-tenured, established relationships, our customers got on board and helped us build the business.   Within three months, the product cadence and time to market was meeting incoming product flow.  Recovery rates were multiple what the OEM had been previously experiencing.   (Contract signed 2011-Present)

Company Background

Fortune 200 Hardware company.  The OEM hired a new General Manager.  He felt that their RL Supply Chain process was inefficient, over complex and that the time from receipt of product to finished goods (made available for resale) was too long.

Issue

Segue had been the exclusive remarketer for the OEM for five years.  We were asked to take a look at their RL process.  The OEM’s business operations looked like this prior to Segue:

 

  • Personnel to manage: 27 plus 2 managers
  • Warehouse space being utilized:  20K square feet
  • Processing area: 12K square feet
  • Turn time (from incoming to available for sale): 6-9 weeks

Solutions Implemented

Segues created a transition and execution plan to take on the business.  Sales channels were already established.

Results

Operations were transitioned within 30 days.  There was no break or impact to the channel partners; a seamless transition.  By the 60-day mark, the business looked like this:

 

  • Personnel to manage: 9 plus 1 manager
  • Warehouse space being utilized:  5K square feet
  • Processing area: 4,500K square feet
  • Turn time (from incoming to available for sale): 48-72 hours

 

There was an additional 15-20% increase in recovery rates as the product consistency and quality improved.  (3PL Contract signed 2010-Present).