How a 60-year-old Parts Distributor is Reinventing its Role in the Aftermarket Supply Chain

During the first few decades of television, picture tubes were one of the most commonly replaced parts and later, DLP lamps. Consumer electronics parts distributors could thrive on just these components alone.

But as TV technology has evolved, and the cost to replace a set is often more economical than repairing it, parts distributors have had to change course to stay afloat. Formed in 1953 as a supply house for TV tubes, antennas, phonograph needles and the like, Encompass Supply Chain Solutions, Inc. has experienced repeated market shifts. To survive, the company has had to be forward thinking and anticipate the trends that could potentially put it out of business.

Reverse Logistics Association President Gailen Vick recently visited Encompass’ headquarters in Lawrenceville, Ga. to get a first-hand look at how the distributor is reinventing its role in the aftermarket supply chain.

In one area within the company’s 150,000-square-foot flagship warehouse, Sonicare toothbrush charging bases are stacked next to Norelco shaver heads. Other aisles contain Haier dryer lint filters, Samsung television panels, Sony PC boards and LG ice makers. Shelf after shelf is stocked with parts and accessories from numerous global brands in multiple product categories.

But walking further through the facility, it becomes clear that Encompass is no ordinary parts distributor. Step inside a door off the main warehouse floor, and you enter a brightly lit room that houses the company’s Service Solutions division. Although it appears more like a surgical suite, the room is used for repairs and reverse logistics functions. Test stations topped with soldering irons, BGA machines, oscilloscopes, Huntron trackers and other diagnostic equipment line the space. Employees clad in white lab coats, tethered with static cables, intently inspect laptops, projectors, security equipment, TV main boards and other electronics, performing pass/fail testing, cosmetic inspections, repairs and refurbishment. Valuable failure data is often shared with clients to assist in making product design improvements.

In addition to external clients, Service Solutions works closely with the Parts side of the business to supplement supply of hard to find parts or those that have been discontinued – particularly printed circuit boards. Working off a demand list from the Parts team, Service techs repair boards, which are then reinserted back into the supply chain. Fueled by the core recovery process, this has the added benefit of preventing tons of e-waste from ending up in landfills. Encompass also offers harvested components through its Green Choice Parts® program. The company partners mainly with retailers to salvage good working parts from products that otherwise would be discarded.

Down the corridor from Service Solutions is another entryway that leads to a 50-person call center where agents field an average of 5,000 calls a day. In addition to managing calls from customers checking price and availability or asking about order status, Encompass offers call center services to manufacturers wishing to outsource consumer calls for assistance in ordering parts, setting up new units and even product troubleshooting.

Encompass President and CEO Robert Coolidge is a third generation leader in the company, which was originally founded by his grandfather in South Florida as Vance Baldwin Electronics. The company still maintains a distribution center and administrative facility in Ft. Lauderdale.

Coolidge said Encompass realized years ago that simply selling service parts for televisions was not enough of a differentiator to continue succeeding in a competitive market.

“We knew that we could not last as a ‘one trick pony,’ ” said Coolidge. “To provide true value to the market, we had to think differently and not just keep doing what we’d always done.”

Expanding parts support to product categories beyond consumer electronics was the next logical step. Today the company supplies parts for nearly 200 manufacturer brands in multiple product categories, including appliance, HVAC, personal care, health & wellness, printers and computers. They have access to 8+ million parts in their database.

Coolidge said Encompass is always looking for new product categories to support with parts or service.

“If it has a component that could be repaired or replaced, we’re interested,” he said. “We’re in discussions now with manufacturers of a diverse array of goods from drones to medical equipment.”

In 2008, the company took even greater steps to diversify by acquiring Cyber-Test – a company specializing in electronics repair, advance exchange and reverse logistics – to form its Service Solutions division. This positioned Encompass to offer services covering nearly every phase of the aftermarket supply chain under one roof.

A growing area of opportunity for Encompass has been managing the entire parts supply chain from planning and procurement to order fulfillment and reverse logistics.

“Today’s manufacturers increasingly are finding that managing spare parts is a drain on their already taxed resources,” said Coolidge. “They are starting to turn to distributors like Encompass to take over parts supply. Because we are able to spread infrastructure and operational costs across multiple brands, we offer an economical, more simplified alternative which enables manufacturers to keep their focus more on product development.”

To keep clients fully apprised of their parts programs, Encompass maintains a robust reporting system. In the warehouse and call center, large color monitors display a range of information on staff performance such as items picked per hour and number of calls taken. Encompass carefully tracks just about all operations to both pinpoint areas in need of improvement and report activity back to clients.

“With the data we collect, we can identify bottlenecks or other issues that we may not otherwise have known about. We can then implement procedural changes or provide additional training to help improve our metrics,” said Coolidge. “Plus, we can report on just about any data set our clients require so they have complete visibility into their programs. Fill rate, same day shipping, backorder levels and overall turnaround time are some common distribution metrics – anything they want to know we provide through electronic reports they can receive daily, weekly or monthly on demand.”

While pick/pack/ship will always remain the foundation of Encompass’ core business, the distributor will continue seeking new opportunities to expand services and remain relevant.

“To remain a viable business, we know we cannot rely on being just a parts distributor. We plan to keep evolving and increasing our value in the aftermarket supply chain.”