Intermec, Ahead of Holiday Returns, Backs Hardware as a Service

An Intermec-commissioned study suggests distribution centers could save time and money by leasing hardware during their busiest season.  

A new Intermec-commissioned study focuses on what few of us require extra proof to believe: With the holidays come added stress and an increased workload.

A survey of 250 supply chain and distribution center managers in North America, the United Kingdom, France and Germany found that while the shopping season is no doubt a busy one, it's the post-holiday season and the returns that come with it that most companies (61 percent) find to be the most challenging time of the year.

Despite that figure, 52 percent of managers said they didn't have appropriate tools or processes in place to quickly determine what to do with returned products—whether they should be thrown out, returned to inventory or sent to the vendor.

The percentage of products that wind up as returns varies by industry, and in retail can be as high as 35 percent, Bruce Stubbs, Intermec's industry marketing director for distribution center operations, told eWEEK. The influx of post-holiday returns means that a company has to pay—or pay someone, maybe an outside company—to deal with the returns process.

"It's the cost of doing business," said Stubbs.

Intermec, with some ideas for reducing that cost, has gotten behind the burgeoning market of hardware as a service (HaaS).

"For a lot of companies, their business is steady during the year but peaks during the holiday season," said Stubbs. "To handle that peak, they bring in extra help or temporary workers, who need equipment. But it doesn't make sense to have that equipment sitting there all year round to handle the peak. So we offer short-term leasing."

A direct-to-consumer retailer may, for example, set up a dozen packaging stations.

"It's a lot of packing the items in a box, putting the right product in, the right materials so things don't move around, and adding gift wrapping or whatever value-added service is involved," Stubbs said. "So there's labeling and printing involved, and those are devices you can easily lease for a matter of months."

Then, the post-holiday crush of returns follows. This has traditionally been a very paper-driven and error-laden process, according to Stubbs. Intermec leases scanners, which help improve accuracy, as well as label printers, so a return "goes where it needs to go."

Intermec's other plug is for the software on its devices, which makes leased equipment simple to connect to existing equipment without the need for additional infrastructure.

"In a matter of hours, you can have 10 or 15 mobile packaging stations set up with all the equipment a person would need," he said.

According to the Intermec survey, 45 percent of warehouse managers agreed that they view leasing hardware as a cost-effective solution for managing peaks in service, and 72 percent cited multifunctional devices as "critical to ensuring worker flexibility and performance."

Intermec's Dec. 19 report follows a Nov. 29 report on warehouses and distribution centers that found these businesses feeling pressured to reduce costs and margins. Within six months' time, 79 percent of managers said they'd been tasked with finding an average of 19 percent cost savings from existing operations—though 30 percent admitted that within the last year, they hadn't reviewed the workflow processes in their distribution centers.

The survey was performed by research firm Vanson Bourne, which found that over the course of an eight-hour shift, each worker loses an average 15 minutes of productivity to an inefficient process. In a company with 50 workers, this adds up to nearly 3,000 lost hours a year.

"Nearly two-thirds (60 percent) [of those surveyed] agree that 'Large time and cost savings opportunities can be found in gaining back mere seconds in operations workflows,'" said the report. "Examples of how to achieve this include having workers take fewer steps, investing in faster label printing and quicker label scanning, and eliminating battery changes mid-shift."

Stubbs added that with companies looking to eliminate wasted time, reviewing one's technology infrastructure "may be the perfect place to start."