Edition 48
The Marriage of Enterprise and the Mobility Market - Is There a Simple Solution for a Successful Union?
by Robert Griffin, Executive Vice President, Ingram Micro

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A significant portion of business innovation and growth in the next decade will hinge on the successful integration of ever-expanding mobility products being introduced into the enterprise environment. With the dramatic increase of smartphones and tablets being introduced daily into business usage, mobile product manufacturers, wireless solution providers and enterprise customers are facing new challenges as well as profitability opportunities.

In 2013 alone, analysts from IDC predict that IT spending will exceed $2.1 trillion, which is up 5.7 percent from 2012. The biggest categories propelling this growth will be smart mobile devices including smartphones and tablets. This is an increase of almost 20 percent over last year and will account for nearly 57 percent of the industry’s overall growth.1

Even more compelling, IDC further stated that the IT industry is moving toward the mobile, social, cloud and big data business model even more rapidly than people realized, predicting that from 2013 through 2020, 90 percent of all growth in the IT market will come from these technologies. (1)

So how do OEMs and mobile network operator or service providers optimize this explosive revenue stream in the most effective, cost-efficient and profitable manner?

First, the key to any successful union is recognizing the unique needs and strengths of each partner and identifying the common threads that unite them. Oftentimes, it then comes down to finding the best third-party partnerships to ensure that everyone benefits and all goals are met. However, finding that perfect fit can take a little research.

Understanding the Enterprise Mobile Challenge

While new technology brings many benefits to enterprise customers, they now face challenges ranging from managing increased company assets, amplified hardware repairs and returns, securing confidential corporate information and managing the ever expanding demand for mobile applications.

Mobile service providers stand to generate a substantial revenue stream by recognizing and addressing these issues. The enterprise market customer is looking for a provider that can deliver more customization of the mobile device that they bring into their companies, often looking for multiple and diverse applications that tailor the device to a specific job function. The challenge for providers is how to identify and deliver efficient, cost-effective methods that enable them to deepen their relationships with enterprise customers.

Mobile device OEMs play a critical part in addressing the ever-evolving needs of the enterprise customer as well as those of the mobile service provider. OEMs need to develop products and technology that address the unique business needs of the enterprise customer and at the same time, partner with reliable mobile service providers to further enhance their products for the end-user. At the same time, they need an optimized supply chain, which can often be costly, which is not an option at a time when most businesses are trying to reduce costs.

Symbiotic Relationships

The success of each of these players depends on their ability to find a way to collaborate and enhance the success of each other.

The mobile device OEM wants and needs the mobile service provider to successfully deliver reliable, wide-reaching coverage and the ability to optimize the mobile devices to suit the needs of the end-user. Without it, device sales drop and the entire marketplace suffers. Conversely, the mobile service provider depends upon the OEM to design and deliver leading-edge technology that excites both the consumer and enterprise markets, resulting in increased service contracts. Together, they are looking to the enterprise customer and its unique needs to expand their sales and market share.

The enterprise customer is clearly counting on both the OEM and the mobile service provider to deliver the optimum products and services possible so that the enterprise corporate goals can be achieved.

Clearly, all three players benefit tremendously from a supply chain that is efficiently managed by a third-party logistics (3PL) provider with world-class solutions.

Can a Common Single Source Ensure Success?

While there are many technology and end-to-end lifecycle service providers, most focus on specific market segments. With the projected growth in the IT market for mobile devices, mobile service providers will be exploring relationships with new 3PL providers that work with the enterprise space. Interestingly, many OEMs that produce mobile devices also have a wide range of technology products and software offerings that currently provide value to the enterprise market.

If these companies could centralize their forward and reverse logistics, inventory, distribution and value-add services with a common solution provider, the positive impact on their business could be enormous - increased channel access, decreased transportation cost, ability to effectively apply JIT strategies, streamlined reverse logistic costs and opportunities, improved delivery times, reduced inventory costs and provide a more cohesive relationship between all three players.

Gartner analyst Tuong Huy Nguyen concurs with this solution, stating in a September 2012 report entitled Ingram Micro Strengthens Mobile Distribution Expertise, “The traditional IT market has evolved to incorporate the growing demand for mobility. Wireless solution providers can benefit from lessons learned from supply chain and distribution models in the traditional IT market. Both segments can leverage these best practices to develop a strategy that effectively handles the evolving demands of consumers and enterprise users. One option is a partner with experience in both markets.”

Recognizing the growing need to service both OEMs, the enterprise and others in the mobile marketplace, Ingram Micro, the world’s largest technology distributor, recently acquired BrightPoint, a global leader in wireless device lifecycle services to the wireless industry. Combined, they create significant efficiencies for OEMs, mobile service providers and enterprise clients.

Customers are looking for a single, highly integrated 3PL partner that can provide scale, reach, expertise, longevity and integrated operations for different electronics devices in the IT and mobility markets, enabling customers to more easily to take their business to the next level. When industry leaders in both the IT and mobility services market combined like Ingram Micro and BrightPoint, expanded global reach can increase dramatically through the expanded facility footprint and subject matter expertise, supporting the efforts of OEMs who are looking for device lifecycle solutions across multiple market locations.

The Role of Reverse Logistics

Clearly, when an industry grows, it also experiences an expansion in its reverse logistics activity. With major growth anticipated in the mobile device market, Blumberg Advisory Group predicts that the total market for reverse logistics should anticipate growth from $2.4 billion in 2010 to $3.7 billion by 2015. (2)

Mobile devices tend to have relatively short lifecycles - people are always ready to dump one device for the latest and greatest. Reverse logistics in the mobile device market provides enormous benefits to an OEM or mobile service provider such as increased replacement devices, expansion into secondary resale markets, parts salvage and raw material recycling, all of which can positively impact the bottom line.

In addition, a new and growing need has developed in the mobile marketplace, with pressure from enterprise, consumers and government policymakers. Companies and consumers are cognizant of the need for and benefits of recycling, in whatever form that may take. In the supply chain, this is where reverse logistics joins in. It provides companies with a differentiator from their competition. It reflects positively on a company’s image of being socially responsible, or “green,” and is an important asset that elevates a company from the competition.

A basic challenge lies in reverse logistics for the OEM, mobile service provider and enterprise customer - it’s not their expertise. The primary focus of mobile service providers is just that: providing service for mobile products. In order to secure business, the profit margin on devices is often tight, while the margin in services provided is significantly larger. Both OEMs and mobile service providers are looking for strategies to streamline their aftermarket servicing processes. They are looking for solutions that allow them to maximize revenues without taking their focus off their core business.

When key players in the IT supply chain and mobility lifecycle join forces, OEMs, mobile service providers and enterprise customers all benefit from a speedier, more efficient and effective reverse logistic process. Having a single location where product can be returned and subsequently inspected to verify issues, repair and return, refurbish for resale or as replacements, salvage for parts, all parties reap the reward of recapturing value, increase profitability and enhancing customer satisfaction.

Characteristics to Look For in a Supply Chain Partner

With the rapid growth continuing for some time, being able to partner with a provider that has a history of success in supply chain, distribution, logistics and product life-cycle allows OEMs and mobile service providers a streamlined path, reduced costs, and improvement to the bottom line.

Just do a quick Google search and you’ll find there are many solution providers, but once you start to dig, you’ll find few that can provide expertise in both the mobility and IT environments. With that in mind, here are some characteristics to look for a partner:

Expertise - A partner that has proven expertise in all aspects of distribution and logistics in the IT market as well as in the mobility lifecycle arena will enable all players in this projected high growth market segment to experience reduced costs, increased growth and improved market share. Take a close look at the customers they currently support - are they major device OEM players? Key service providers? Prominent channel partners? This is a good indication of their experience and success in IT and mobility.

Global Reach - The global expansion of technology and in particular, the mobile device industry, demands that OEMs, mobile service providers and enterprise clients look for a provider that spans the globe. This is especially important when dealing with OEMs that are looking for device lifecycle solutions that can efficiently move their products through many markets (U.S., Asia Pacific, EMEA and Latin America) with a single highly integrated partner.

Vendor Managed Inventory - Vendor Managed Inventory is a key value-add for both OEM and mobile service providers. Having the ability to manage inventory for an OEM in the same physical facility where the supply chain is managed for the service provider delivers major benefits. This allows the OEM to provide just-in-time inventory solutions, reducing delivery schedules, transportation and handling costs while enhancing service provider turnaround time when the need to customize mobile devices arises.

Longevity - Finding a company that has fostered deep relationships with the channel and each component of its global facilities provides OEMs and mobile service providers with an added-element of security that their strategies and goals are less likely to be derailed. It also provides evidence of their expertise and experience, qualities that can only benefit a customer.

Reverse Logistic Services - Successful device manufacturers and service providers understand that a product’s lifecycle doesn’t cease when it reaches the end-user. If there are any product issues or dissatisfaction, the lifecycle continues. The optimal supply chain and lifecycle partner will be able to provide all forms of reverse logistic services, allowing the customer to focus on their core business. The services provided should range from processing returned product and either reconditioning, refurbishing, recovering parts for reuse, or properly recycling or disposing of hazardous materials.

Value-Add Capabilities - This is particularly important when dealing with mobile devices. Look for a provider that has experience in such things as product customization (i.e. software flashing, light assembly and packaging). Enterprise customers will require a variety of mobile applications uploaded to the devices they bring in, often times specific to a job function.

Integrated Operations - The mobility device market and IT enterprise customer are both facing new learning opportunities. A supply chain partner can that deliver expertise and experience in both markets will allow OEMs, mobile service providers and enterprise customers to work cohesively, benefiting all of them.

Channel Access - Who are their channel partners? Are these partners that you may already have a relationship with and together you would benefit from working with a single source provider? Perhaps they have channel partners that you’re interested in forming a relationship with and the benefits of working in a streamlined solution could assist in making that connection.

Integrated Device Lifecycle - There are many phases in a device lifecycle and while not all apply to an OEM, mobile service provider or enterprise client, access to all aspects benefits all three in some way. Look for solution providers that offer complete end-to-end capabilities, moving product from manufacturing, providing customization services, fulfilling through all channels (retail, company store, indirect dealer, and directly to an end-user), transportation management and complete integrated reverse logistics and repair services.

Success in Mobility - IT Markets

As the mobility market blazes a path into the enterprise arena, all indications point to a market opportunity not seen in recent years. Many players will attempt to enter the IT – mobility device space, but only those who have developed cohesive relationships with important partners and utilize a supply chain provider with expertise in both IT and mobility, delivering top-notch services in all aspects of forward and reverse logistics will experience substantial success.

The ideal partner that will support your corporate objectives should be constantly challenging and recasting its processes, technology and infrastructure to provide customers with industry leading solutions, delivering them with the highest level of customer service and commitment. An expansive global reach and expertise enables them to relentlessly pursue ways to drive efficiency, scalability, flexibility and transparency for customers, putting the device at the center of a new kind of value chain.

(1) Frank Gens, Senior Vice President and Chief Analyst at IDC, IDC Predictions 2013: Competing on the 3rd Platform (Doc #238044)

(2) Blumberg Advisory Group, Strategic Analysis Of The Reverse Logistics Market for Cellular Telephones in the United States 2012.

This submission is exclusive to Reverse Logistics Magazine.
Robert Gifford serves as executive vice president, global logistics of Ingram Micro Inc. Based at the company’s headquarters in Santa Ana, Calif., Gifford has comprehensive responsibility and oversight for all elements of the company’s distribution centers and supply-chain operations throughout the world, including the Ingram Micro Logistics fee-for-service business unit. He joined the company in June 2010.

Gifford has more than 30 years of experience in operations and supply-chain leadership. Most recently, he served as senior vice president, global supply chain for Ecolab Inc., a Fortune 500 manufacturer and distributor serving the hospitality, institutional and industrial markets. He led all aspects of the company’s supply chain globally, optimizing 37 manufacturing plants and 84 distribution sites, while integrating dozens of acquisitions during his six-year tenure.

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