Turning around cell phones

-- Modern Materials Handling, 10/1/2004

It's a dirty job, but someone has to do it.

That could be the motto for CellStar, a worldwide distributor of cell phones and accessories which handles up to 50,000 returns each month at a 230,000 square foot facility in Coppell, Texas (972-466-5000). CellStar also manages a cell phone replacement program for a cell phone insurer from the same facility.

'Returns is the dirtiest, most complex, and most difficult part of the distribution process for any facility,' says Chris Smith, CellStar's general manager for the U.S. region. 'Handling mobile phones is even more of a challenge because every unit has its own individual serial number; has software that varies according to the carrier it was activated on; and has a unique warranty.'

With an average selling price of $150, those phones are also very expensive. They need to be processed and returned to stock as quickly as possible. 'If you have to exchange a phone with a customer, you don't want to pull a new one out of the box,' Smith explains. 'You want to be able to use a refurbished phone whenever possible.'

CellStar relies on a WMS to make the system work (Yantra, 978-513-6000).

'Before implementing the WMS, we used a lot of Excel spreadsheets to cobble a system together to manage the returns,' Smith says. 'It was pretty easy for a unit to fall into a black hole between arriving on the dock and showing back up as B stock.'

Returns for the insurance program illustrate the system at its best. The process begins when a customer calls a service center to report a problem. Once the service center rep verifies the equipment, real-time inventory information provided by the WMS can be accessed to see if a replacement unit is available. The system creates a returns authorization number associated with that phone's serial number. CellStar then ships a replacement phone overnight along with a shipping package to return the damaged phone.

When the returned phone arrives at CellStar's facility, a label is scanned. That verifies the right equipment has been returned. The WMS records the date and time the phone was received, the identity of the consumer, and information provided by the consumer about the problem.

Once the phone has been received, it will be visibly inspected. Units that are beyond repair are scrapped. Units that can be refurbished or repaired are sent to a repair center within the facility.

'Every time the phone is touched it's scanned,' Smith says. 'That allows the system to record what the problem was, what parts went into it, and how long it took to fix the phone.'

It also allows CellStar to compare the actual damage to the damage reported by the consumer and detect possible fraud.

Finally, the system maintains a real-time snapshot of inventory in the facility at all times.

'When a popular phone is introduced, we may go through 5,000 units a month,' Smith explains. 'If we only have 4,000 in stock, we use event management and alerting to tell us how many returns we're going to get and send an alert if we won't have enough to meet the anticipated demand. That allows us to buy new handsets or source them on the open market.'