Distribution managers will go to just about any lengths to avoid returns. After all, their facilities are designed to ship products out, not receive them back. Worse yet, most DCs simply are not structured to handle returns efficiently.

This is not the case, however, with Dallas-based Technology Rentals & Services (TRS). There, returns are not only welcomed, but essential to the business model. That's because TRS is one of the nation's largest renters and lessors of technology, including electronic equipment, test instruments and data systems. A division of CIT Group, Inc., TRS ships equipment to its customers for a contracted period of time, then receives the items back, reconfigures them and sends them out again to new clients.

Leased products include electronic test instruments utilized by industry to perform highly sensitive measurements. Computers, laptops and other data products are also rented for numerous uses including field support, trade shows and training programs. Customer specific software must be loaded onto these units before they ship. Similarly, other electronic products are leased for longer periods to companies that rent instead of purchase.

Technology Rentals & Services additionally handles demonstration equipment for an electronics manufacturer. These units are sent out to salesmen and prospective customers for a three-week demo period before returning to the TRS facility.

Recently TRS underwent a major renovation of the materials handling systems at its distribution center at Dallas/Fort Worth International Airport. The integrator (Cisco Eagle, www.cisco-eagle.com) worked with TRS to install automated systems, including conveyors and sorters, to process outgoing orders, new receipts and returned products. The new systems replaced much of the manual handling performed previously.

The results of the upgrade have been impressive. Work flows have become more efficient at a time when business has increased and the company is quickly outgrowing its building.

Average processing time for orders has been cut in half. Packaging costs alone have been lowered by $20,000 a month. Shipping costs have been reduced 33%. Accuracy has been improved to 99.9%, and labor savings have been realized.

These overall process improvements have been significant to TRS, as fast turnaround speeds are required. Shelf life for some of the data processing products is only 12 months. Test equipment life can be as short as 24 months. TRS cannot afford to have inventory just sitting around.

'We had the forethought to design flexibility into the system,' says Mike Bray, technical manager, operations. 'Our industry is constantly changing, and we have to be able to handle it.'

The receiving process was a major portion of TRS's upgrade. New products, replacement parts, and returns are all received through the facility's four inbound doors. TRS picks up many of its receipts at a nearby overnight delivery service, which reduces costs. The location also makes it convenient for shipping and allows for later cut-off times which is a huge competitive advantage.

Replacement parts are scanned upon arrival and placed into shelving near the docks until they are needed for a particular repair. They are then taken to the required repair station.

All new products, including computers, servers, and test equipment, receive a bar code label upon arrival that is immediately scanned into the management system. Receipts are then taken by pallet jack to a verification area near receiving. There each carton is opened and all the accessories are checked against the packing list.

Once verified, the new items are stacked onto pallets and transported by lift truck to storage, where they will be held until ready for calibration or to have software loaded. Larger items are placed into pallet racks. Drivers select the storage location and scan both the carton bar code and location ID upon putaway. Smaller items are placed into shelving within the storage area. Items here are also scanned along with locations as they are deposited.

New monitors and printers do not require calibration or testing. They are stored in pallet racks adjacent to shipping.

Returns are a bit more complex. Before the materials handling upgrade, returns were placed onto wheeled carts where some would sit for weeks until processed. Workers would select which cart to work on next, often choosing the least complex returns. The carts would be wheeled from station to station to be sorted for cleaning, repair or placement directly into stock. Each move took time, reduced efficiencies and created bottlenecks. Throughput was also limited and could no longer accommodate growth.

Today the area uses conveyors and ball transfer tables for returns processing. The work moves to the employees and is handled efficiently within minutes instead of days. Bar code scanning at all major steps has improved processing too.

'Everything here is bar coded and tracked in real time,' says Bray. 'We have to be really tight with inventory in this business.'

Pallet jacks are used to unload the returns from arriving trucks. They are then placed on conveyors adjacent to the receiving stations where the cartons are scanned, bringing up the product's record on a computer display. The carton is next unpacked and the contents are visually inspected as items and accessories are placed onto plastic trays. Much of the packing materials, such as foam dunnage, is gathered and taken to storage racks adjacent to the facility's packing stations where it will be reused.

Conveyors then feed the trays containing the received units and their accessories to three types of returns processing stations comprising five lines. Here they are evaluated and cleaned before heading to preparation labs, storage or packing. Much of the work now performed here was formerly done in the labs, which was more costly.

Test and measurement instruments are handled on the first line. These are cleaned and prepared for lab testing. Accessories are also checked.

'We used to have a huge issue with missing accessories,' explains Bray. 'Some test accessories run upwards of $1,000 each. Now we check and track them the same day they arrive, where before they sometimes sat for two weeks.'

Three lines handle returned data products, such as computers, laptops, servers, printers, monitors and peripherals. These too are physically cleaned and tested. Old software and files saved by the previous user are also deleted. Standard image software is then reloaded onto the units as the first step in configuring them for the next client. As many as 120 PCs can be processed simultaneously.

A station at the end of the line re-packs monitors and printers the same day that they arrive. Vacuum lift devices assist workers in placing them into cartons. Reusing much of the dunnage that protects the monitors accounts for most of the packaging savings. Under the old system, packaging was simply thrown away, as there was not room to store it for two weeks while the monitor was cleaned and processed. Repacked monitors are now stacked onto pallets and taken by lift truck or pallet jack to the pallet rack area reserved for monitor and printer storage.

The remaining processing line handles demo returns. This gear comes back from salesmen and customers usually after three weeks. Most testing of this equipment takes only about 20 minutes. Approximately 80% of items are then prepared for immediate direct shipment to new destinations and conveyed to pack stations.

Damaged items from any of the five lines head to one of two repair areas. One handles exterior damage, such as dented or scratched cabinets. The other repair area corrects technical problems, such as troubleshooting the electronics or replacing damaged switches and computer boards.

Remaining receipts from all lines next head to storage where they will await assignment to new customers. Larger items are palletized and taken by pallet jack or lift truck, while smaller items are transported on the wheeled carts. Each item is scanned upon putaway into the pallet racks or static shelving.

TRS is working toward crossdocking a large amount of receipts directly to the pack stations if needed immediately to fill an order, bypassing the trip to storage.

'Our sales force has complete visibility of our inventory once it is received,' explains Bray. 'If a product is there, they can create an immediate demand for it.'

A pick ticket is issued once an order is received for a particular piece of equipment. Some wireless picking is also performed for certain items using radio frequency devices. Both types of picks are made to carts, which are then wheeled to one of two preparation labs according to the type of equipment selected. Monitors and printers are also pulled from the pallet racks and are taken by lift truck or pallet jack directly to shipping.

The data configuration area handles all of the computer and data equipment. Here boards and peripherals are added and software specific to the clients' needs is loaded. Systems are also tested for performance and checked for viruses.

The other area, the instrument and calibration lab, handles test equipment. Units are powered up and calibrated to specifications while accessories are also checked.

Once a piece of equipment clears the preparation areas, it is wheeled to an induct station for the conveyor system. A worker here scans the item, which causes the client order information to display on a screen along with a list of required accessories. The worker then checks to make certain everything for that order has been accumulated properly.

The equipment and accessories are next placed into large totes so that they can be conveyed. Each tote has a reflector on one end. The first tote of the order is placed with the reflector facing downstream while other totes in the order are placed with their reflectors upstream. As the totes are conveyed, electronic photo eyes recognize the reflector of the first tote. This enables the control system to keep all of the totes in the order together as it heads to packing and then shipping. This area received major attention during the upgrade.

Before, a major bottleneck occurred at the two manifest stations the facility used previously. Workers also chose which carts they wanted to process, so the lightest items would be completed first. This resulted in backlogs and missing cutoffs for many of their shipping carriers.

'We used to be here until 2 or 3:00 a.m. each night to get everything shipped,' explains Bray. 'It was because of our processes then. The only way to get everything out the door was to throw a lot of people at it.'

Today automation controls the process. The totes are conveyed from the induct station to the facility's ten-lane packing sorter where pop-up diverts aided by the photo eyes send the totes for an order down a selected lane. The flexible sortation system allows anywhere from one to all ten of the lanes to be used at any given time, depending on volume.

A worker at the end of the lane packs the equipment into new cartons. Several types of dunnage may be used, depending on the type of equipment. Some larger units may reuse the plastic foam unpacked from returned products. This is stored in racks nearby and can be reused up to ten times. Bubble wrap is also used to protect smaller items and accessories.

Other products are packed utilizing chemical foam. A plastic sheet is placed into the carton and the chemical foam is squirted into the sheet from a large dispensing tank. Immediately the foam begins to expand and conform to the shape of the container. The sheet is folded over as the foam begins to harden. The instrument is then placed onto the folded protective sheet and the worker presses it gently downward to allow the foam to form around the equipment. Another sheet is then placed onto the equipment and the process is repeated so as to protect the top of the instrument. The carton is sealed with staples. Packing and shipping labels are also printed and attached.

The worker then places the carton onto a takeaway conveyor, which feeds the shipping sorter. This sorter uses pop up diverts to direct cartons to eight shipping lanes depending on the carrier and route. The facility has four outbound doors. Most items ship via an overnight delivery service for next day or second-day delivery.

Shipping costs have been reduced by a third, as TRS is now meeting required cutoff times. Some orders can be taken as late as 7:30 in the evening and still be processed that day, due to the new systems and the proximity to the overnight delivery service.

Order processing time itself has been reduced from more than an hour and a half to an average of 43 minutes.

Another significant measurement TRS uses is 'days in due,' or the amount of time that passes between when a piece of equipment is received, evaluated, and prepared for rental again. Before the upgrades, desktops and laptop computers took two and a half days to process. It is now less than half a day. Test instruments dropped from six days to less than a day. And monitors and printers used to take two weeks in the old system. Now they can be made ready to re-ship the same day.

'The bottom line is that we have invested in systems to assure that things get done faster and with better quality,' says Bray.

Click on this icon to read how computer distributor Ingram Micro handles returns in a dedicated facility.