Reducing Instrument Return Cost


 

At a Glance

Results

Reduced instrument return cost by 50% within 6 months

Industry

Medical Devices

Function

Instruments


Background

MedicalDevicesCo had 3 different contract manufacturers (CMs) across 3 different countries in USA, Mexico and China. The cost for the instrument RMA (Return Material Authorization) process was high: long lead time for RMA and long downtime for customers, as well as loss of warranty money from the CMs.

Approach

Working with the matrix Instruments Team, we investigated the entire return process from the Field Service Engineers to the headquarter Shipping and Receiving to the CM’s warranty claim departments and found numerous places for improvements.

  1. The Field Service Engineers lacked the authority to make decisions and many instruments were returned to Santa Clara that could have been repaired in the field.

  2. The current RMA process processed everything centrally through the headquarter in Santa Clara regardless where the instruments came from and where they needed to go for repair resulting in long lead time, and sometimes the loss of warranty.

  3. Customers were often without a working instrument for weeks while the problematic instrument was waiting for evaluation in Santa Clara, and then being shipped to, evaluated (again) and repaired by the respective CM.

We tried to simplify the logistics and also looked at data to help minimize downtime for customers. Some of the changes included:

  1. Working with the Instrument Engineers and the Field Service Engineers, we developed a checklist for the Field to triage problems so that more decisions could be made in the Field, minimizing both downtime and avoiding multiple shipping costs.

  2. As part of the Checklist, we also determined at the time of the field visit where to ship the instrument should that be necessary. Depending on the instrument line, we would ship it to the appropriate CM. We then worked with the CM to determine the cause(s) of failures.

  3. Taking advantage of data analytics, we combined data from CMs’ databases, instrument and consumable sales, QA and RMA data, we tried to understand the useful life of different instrument parts and the most likely to fail parts. We then stocked a number of them in the various regional warehouses so that repairs could be made quickly.

  4. We also staged a few refurbished instruments that are out of warranty in various regional warehouses. In the event that an instrument needed to be sent to the CM for repair, we gave the customer the option to use the refurbished instrument as a loaner instrument until their own unit came back (or to keep it as a replacement instead).

Results

Implementing simplified logistics and taking advantage of data analytics to better anticipate field service needs had resulted in 50% cost reduction within 6 months.

- S. Wallace