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Test, Repair, Refurbishment and Redeployment of Used Service Parts

Turning a Liability Into an Asset With Six Distinct Wins

Executive Summary A Multi-State System Integrator had been wrestling with escalating costs of electronics, inventory shrinkage, scrapping fees, and poor rates of vendor RMA credits in its Field Service operations. QGistix provided a program which helped this customer save money six ways, resulting in a material improvement in this company's profitability.

Benefits included:

  1. Usage of Refurbished Product vs. New Product on Service Jobs
  2. Credits and Replacement of In-Warranty Failures
  3. eWaste Savings (fewer parts to eWaste and no net zero cost)
  4. Loss Prevention from Technicians
  5. Avoidance of EPA Fines
  6. Reputational Risk Mitigation

Challenges
Our customer's field service program was consuming a significant portion of their total revenues. Top on the list was the high cost of new equipment used during service calls. Our customer believed that, in addition to legitimate consumption of material, some of their Field Service Technicians were potentially removing new product from their trucks and selling the product on the internet.

Additionally, our customer was not certain that failed product was being properly Recycled, and when it was Recycled, their eWaste fees were excessive.

The QGistix Solution
We proposed a full suite of Reverse Logistics services for our customer. On the Reverse Logistics side, we worked with our customer to deploy an app which was deployed on the FST's tablet which required the technician to scan the serial numbers from old equipment being removed from their client sites and also scan the serial numbers of the replacement product which was being installed. All upsell equipment during a service call was also recorded electronically, so our customer always had traceability to the new product being deployed. All old equipment was labeled, placed in the FST truck, and sent to QGistix on weekly shipments. The app data was transmitted to our customer and to QGistix.

When QGistix received a shipment of Used Service Parts from this customer, the parts were cataloged into the QGistix system, and each returned part was matched with the part recorded on the FST tablet app. A weekly compliance report was generated for our customer, flagging service parts recorded by FSTs but not received by QGistix.

Results
After the initial launch of this program in 2018, our customer reported a spike in compliance violations as their FSTs learned about how the tracking app worked. It is difficult to trace how much of that was due to FSTs not logging data correctly at the beginning and how much of that was actual shrinkage being tracked, but our customer did report just under 10% reduction in total new part usage from the quarter prior to the transition to the new system to the full quarter after transition.

An additional benefit from tracking FST returns was the immediate increase in used material returned from the field. Since the FSTs were now motivated to return everything, there was no more risk of improper disposal of customer's parts by the FST in random trash bins or customer's dumpsters. This dramatically reduced the risk of a very costly EPA fine, and the negative publicity which comes along with it.

The most significant result from this program was the large number of parts, over 75% of the used parts QGistix received, which were successfully tested, repaired, refurbished and redeployed back to the customer for use on future service jobs. Of the remaining 25%, almost half were determined to still be under manufacturer warranty and had functional failures. These were returned by qgistix, on our customer's behalf, to the manufacturer for credits or new replacements. Only a small percentage of the parts were not repairable and not covered by manufacturer warranty, due to exhibiting customer damage or being outside the manufacturer warranty period. These parts were sent to our preferred eWaste provider at minimal cost to our customer. Our customer saved a significant amount of money on eWaste fees due to the high percentage of parts Qgistix was able to refurbish and return on RMA to the manufacturer. Going forward, the cost to eWaste the remaining parts are expected to drop even further as QGistix brings its R2 Recycling Program in-house. Please subscribe to future QGistix publications on the form below, and you will receive a press release when the QGistix R2 Program is announced.

In summary, our customer saved money on this program six different ways:

  1. Usage of Refurbished Product vs. New Product on Service Jobs
  2. Credits and Replacement of In-Warranty Failures
  3. eWaste Savings
  4. Loss Prevention from Technicians
  5. Avoidance of EPA Fines
  6. Reputational Risk Mitigation

The only costs of the program are QGistix transaction fees and shipping expenses.

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