Ericsson drives a greener supply chain
Web-based asset management system promotes increases in efficiency and reuse
Telecom equipment company Ericsson faced a problem not uncommon among manufacturing companies: Its services supply chain was fraught with inefficiencies. The company had limited visibility into its own far-reaching inventory of parts, and for competitive reasons, repair providers were reluctant to share their inventory data. Thus, in order to ensure it could keep up with customer demands, the company had to maintain excess stock, which can prove both costly and wasteful. Moreover, the company determined that it was spending more time and resources than necessary to get inventory to customers -- not to mention the waste that came from disposing of excess wares that had become obsolete.
In an effort to make its services supply chain more efficient and environmentally sound, Ericsson last year deployed a network asset management system from Trade Wings called Re:source Visibility. Among its feats, the system provides Ericsson and 2,000 global users with a consolidated, up-to-date view of the inventories at repair centers and service channel operation centers, as well as from new material order teams.
The greater visibility into inventory lets Ericsson and partners determine whether the parts a customer needs are available at a nearby repair shop, thus saving the time and expense of ordering and shipping the goods from afar. The system also offers the ability to look beyond the normal boundaries of internal stock levels so as to whether parts are available for reuse.
Additionally, Ericsson can better foresee potential shortages of in-demand wares, thus helping to reduce costlier small-production runs to fulfill customer requirements.
From a logistics perspective, Ericsson can use the system to devise efficient transportation routes, taking into account distance, fuel, and emissions when, for example, moving inventory from one location to another. The system provides data on both availability of equipment and the distances from point of need, which has enabled users to factor fuel consumption into their decisions.
The program also supports the company's material take-back service, a legal requirement under the Europan Union's WEEE (Waste Electrical and Electronic Equipment)directive. Customers can request that Ericsson pick up retired goods for end-of-life management. In 2009, the company received approximately 500 requests globally for WEEE collection, which amounted to about 7,045 tons. All told, Ericsson's recovery rate for treated equipment reached more than 95 percent; the WEEE directive's requirement is 75 percent.
All of these benefits add up to faster, more efficient customer service, lower operating and energy costs, less electronic waste, and fewer carbon emissions. All told, the company has saved a consierable some cash by reducing service-related equpiment purchases by 20 percent.