Innovative Reverse Logistics Solutions Presentation2

www.avccorp.com

Innovative Reverse Logistics Solutions

AVC CORPORATION | YOUR ONE STOP SHOP SOLUTION

2015

CREATING VALUE FROM A 3PL


1 www.avccorp.com AVC Corporation | Innovative Reverse Logistics Solutions

Creating both customer and supplier value through the combination of IT supply chain infrastructure, reverse logistics, transportation synergy, and packaging, makes AVC a global leader in supply chain solutions. AVC has a long history of working with retailers and manufacturers, as well as high tech companies by creating the TOTAL PACKAGE SOLUTION. Leveraging reverse logistics to be a ‘value’ rather than a liability is what AVC creates by allowing our clients to achieve greater sales thru resale while realizing savings thru the reclamation of parts.

REVERSE LOGISTICS AS AN ASSET



Reverse logistics initiatives should reduce real costs while better satisfying customers and play a part in building your sales---not reducing them. The retail customer demands an efficient return process with established policies and a quick replacement or a refund. Failure to do so puts you onto the internet bloggers death list. Therefore, managing reverse logistics is a significant part of your ‘total’ supply chain. While it is often overlooked as a ‘stepchild’ part of the business, this has become a significant segment for high tech companies to consider. No one, especially a high tech company, wants to believe there will be returns of their product. Reality tells us otherwise.

REVERSE LOGISTICS AS AN ASSET



AVC looks at this as an opportunity for our clients to ‘shine’ in the eyes of their clients. Reverse logistics is a process of receiving returned components or products for the purpose of recapturing value. It means a reversal of the supply chain so the incoming products can be correctly categorized and disposed of placing value on these products rather than creating a liability. It is much more than just receiving and counting returned products. In fact, upon consideration, it is more complex than outbound shipping in that the customer initiates the return and therefore the inbound shipping process is less predictable.

REVERSE LOGISTICS, A REQUIREMENT



The average manufacturer may spend up to 15% of total revenues on returns. By Improving reverse logistics a manufacturer can improve revenues of to 5% of total sales. Effectively managed reverse logistics can enable our clients to find hidden profits, improve customer satisfaction and minimize liabilities. Manufacturers lag behind retailers in reverse logistics technology. To improve the reverse logistics processes, a company can move along several fronts, all of which AVC’s 3PL Solution can handle.




Defective returns make up less than 20% of products that pass through a reverse logistics center. The balance includes recalled products, end-of-life products, seasonal returns and of course customer remorse. Mastering these returns through the reverse logistics process will have a direct impact on your costs of doing business, on your company’s ROI, and on the level of customer service required to compete in today’s economy. The retail industry uses return policies as a competitive weapon and a manufacturer who will not, or cannot accept returns puts himself at a competitive disadvantage with their competitors.




Without a well-managed reverse logistics process you could be losing over 50% of the returned inventory value that could be sold in the secondary market. This ‘secondary market’ is estimated at about $15 billion annually and a well-developed reverse logistics program can take advantage of this market.

WHAT MAKES UP THE AVC REVERSE LOGISTICS PROGRAM?



► Return policy administration (EDI, serial number control, RMAs)

► Product recall protocols (Actual as well as virtual quarantines)

► Repair processing, including transportation

► Repackaging and refurbishment (AVC prints as well as thermoforms)

► Parts managements (full serial control)

► Testing (Postponement, Reconfiguration, Field return incoming testing)

► Returns management system (EDI, full serial control

► And recycling

► E-Commerce




Why outsource your reverse logistics to AVC? Do you have the expertise within your management ranks to run the operation or, would rather use their resources toward other areas? AVC gives our manufacturing clients the focused motivation experience, existing technology, capital resources and staff to have you hitting the ground running.




The AVC 3PL experience can have an immediate and positive impact on your company simply because of our experience in developing return operations and start-up processes. AVC will have you up and running immediately with a full implementation done in months rather than a year or more and capital outlay that would be required if you have to do it from the ground up.

AVC HAS THE EXPERIENCE



AVC is certified as an ISO 9000:2008 operation for ”full service contract manufacturer providing design manufacturing, reverse/forward logistics, reconfiguration, RMA refurbishing, e-commerce and complete packaging service provider.“ With two strategically located hubs (on the west coast and in the Midwest) and 5 manufacturing locations in China, AVC can leverage and optimize transportation expenses while improving customer response times, AVC delivers the optimum solutions to your reverse logistics program. What AVC offers: ► International and domestic transportation support (partnered with Landstar) ► Existing operations handling electronic items ► Packaging, printing, design ► A global retail packaging manufacturer with over 38 years of experience in customer retail packaging ► ISO 9001:2008 Certified ► Customized supply chain requirements ► Global supply chain management synced to your IT supply chain infrastructure ► Continuous cost chain management focus

THE ADVANTAGES OF AVC



► Demand Planning. We manage the client’s operational forecasts to ensure material availability when required. ► Manufacturing and Assembly. We facilitate the inbound materials supply chain through serialization and assembly into fully packaged kits. ► Supply Base Management. AVC assumes total accountability for supplier network management, including sourcing and purchasing. We have full visibility into shipments, inventory forecast coverage, and supply partner activities. ► Reports and Analysis. Clients keep track of all supply chain activity with detailed reporting and supply partner activities. Clients have visibility to their inventory 24 hours a day. ► Global Warehousing and Fulfillment Services. With our global flexibility and local market knowledge, AVC enables worldwide market expansion and strategic supply management for all of our clients.




► Reputable Execution. We support millions of dollars in client revenue. The world’s leading brands show confidence in AVC to meet their demand requirements with daily deliveries. ► Retail Compliance Infrastructure. Our end-user fulfillment services influence our long-time relationships with retailers throughout the U.S. and Asia. These include programs to comply with retailer-specific routing and distribution requirements. ► Postponement Ability. We assist our clients to improve lead time through product postponement while reducing transportation and logistics costs.

► Centralized Demand Planning. Our integrated planning and sourcing team takes full responsibility of planning, supplier management and inventory management of locally sourced components and products.

► Inventory Management. We refine component and finished goods inventory levels for less surplus and obsolescence.




► Returns, Repair and Recovery Services. We offer turnkey solutions combined with years of consumer electronics repair experience and value recovery understanding will maximize the value of your returns and surplus inventory

► Detailed Failure Analysis. We help our clients prevent future returns by performing critical failure analysis and sending the collected data back to the source manufacturer.

► Environmental Importance. AVC is a leader in Environmental Protection. Our repair operations are ISO certified and we ensure all usable and unusable parts and materials are recycled or disposed of properly.

► Build-To-Order / Configure-To-Order. AVC provides shipment distribution services configured to support BTO and CTO manufacturing programs. ► AVC leverages its supply chain design, transportation system and supply chain trade compliance programs to provide its customers with an integrated end-to-end offering.

RETURN PROCESS PROFICIENCY



Retailers treat merchandise returns as individual disjointed transactions. The challenge for both retailers and vendors is to process returns at a proficiency level that allows quick, efficient and cost-effective collection and return of merchandise. AVC’s function is to shorten the link from return origination to the time of resell. Reverse logistics is intrinsically connected to customer retention and is a business strategy aimed at retaining customers. It is more than just returns management. Returns management affects competitive positioning by linking marketing and logistics. AVC introduces gate keeping; Compacting disposition cycle time; Reverse logistics information systems; a Central return center; Remanufacture and refurbishing; and asset recovery. The return process, repair and replacement of products have a huge impact on customer service. The nerve center of such an operation is the warehouse. If the returns process involved huge inefficiencies but can be managed by the correct technology and processes.

E-COMMERCE



In this 21st century sales channel customers do not see the product before purchase. Once it arrives, if it is not exactly what they wanted (or thought it would be), they return it. Buyers’ remorse is also a problem. If the customer experiences an overwhelmingly negative experience on returning of product, all the forward logistics customer service is overridden and the manufacturer will lose further orders. Reverse logistics is very complex requiring a great deal of attention and involvement. Included in the AVC capabilities is ‘disposition logistics’ which includes return to the customer, replacement to the customer, repackaging, and refurbishment. AVC offers a complete e-commerce system of receiving, postponing, designing, packaging, warehousing, fulfilling, shipping, RMA return, refurbishment, and forward logistics. Complete, efficient and all under one roof.

BRAND PROTECTION



Brand protection is paramount for many products. Do you want your goods sold in the secondary market such as discount stores? Isn’t this your choice? Reverse logistics controls the disposal of branded goods making sure they don’t find their way back into the marketplace without your knowledge and permission. What about liability for product malfunction? Are you ready for that? AVC is the solution.

COSTS



Reverse logistics is about cost-- the cost of the goods themselves, the costs to store them, the costs to refurbish or repackage them. Control is in the implementation of an information system that allows adjustments to the ordering, manufacturing, marketing and delivery process. Do you have these programs and processes? Can you afford to implement them, or are you now doing it and finding that the costs are spiraling and causing you more administrative headaches. Outsourcing reverse logistics should be an option to its complexity. AVC takes on the whole process of warehousing, computing, and logistics with no capital outlay on your part.

Innovative Reverse Logistics Solutions Presentation2

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