Where do OEMs have their RMA and in-warranty repair facilities?
If you investigate where OEMs and Contract Manufacturers locate their repair/rework facilities, usually they are located either internally, or they are using an independent 3rd party aftermarket repair service nearby.
Here are just two common-sense reasons for using an independent aftermarket repair service that is located within “slapping distance.” In this article, we assume the provider is a high quality “best-in-class” repair service provider, such as Renova Technology.
Fortunately, transportation costs per mile have remained relatively flat over the last four years. However, the further shipped, the higher the cost. Using a local provider certainly shortens the distance from the OEM to the repair center.
Close proximity creates a “higher velocity of repair” for both in and out-of-warranty repairs and re-work. A higher velocity of repair results in smaller safety stocks and smaller safety stocks tie up less investment.
(“Slapping Distance”) The local provider should be within a short driving distance, if not actually located within the OEM’s physical facility. The ability for the OEM to stop-in for a visit, enables the OEM to have frequent oversight, periodic audits, and most importantly – change their priorities and objectives, which will be inevitable.
This is certainly true if the provider is a “best in class.” – frequently providing detailed repair/rework data analytics and reports to the OEM that strategically employed, result in driving down cost and the OEM’s customers’ brand loyalty up.