Logistics company CLS says it has taken what was formerly an inefficient and costly part of a computer vendor's business and turned it into an effective and consumer/reseller friendly service.
While spare parts management is often viewed as a burden by many vendors, CLS says by taking on this function they are able keep the costs down and provide faster distribution. It does this by sharing the cost of warehousing and distribution overheads across numerous customers, and by utilising an effective spares management and transport consultation structure.
Under the service, clients "lease" floorspace and personnel from CLS according to demand, rather than operate their own facility. "It really is space as they need it when they need it, and accordingly with personnel," said CLS managing director, Tony Joyce.
He said that with about 30 computer companies on its books and warehouses in each capital city of Australia and New Zealand, CLS has the economies of scale to ensure a reliable and efficient service. He said well-known companies such as Hewlett-Packard have been outsourcing these services to CLS for 10 years, out of preference for sticking to their core competencies. Other CLS clients include Cisco, Nokia, Hitachi, Ascend and Sun Microsystems.
Joyce said high value but low demand parts are also held at a "strategic" warehouse at Mascot airport, enabling the fast delivery of these parts across Australia and New Zealand. "We house the high dollar units costing anywhere up to $100,000 for one board that might only have a usage of less than two per year, so in that strategic store we can get them on the next available flight out. When an engineer requires one in Queensland, we can get it to him within two and a half hours," said Joyce.
"It saves the company an awful lot of money - instead of carrying a $100,000 dollar unit in every national city you can get away with one in Mascot, thereby saving half a million dollars."
While providing general services to a number of vendors, Joyce said in the case of Cisco CLS has been able to customise its services by configuring its finished goods to order. "Prior to CLS doing this service, Cisco had to place an order with its parent company in the US where the computers would be configured; it used to take three to four weeks," he said.
"We carry the units in Sydney and we do the configuring on the spot, so when we get the order from Cisco we have the unit out within 24 hours, configured and ready to go. It saves them an enormous amount of time and from a marketing point of view it is a big boost over their competition - they can deliver almost off the shelf configurations as required."
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