CEO's Blog

As manufacturers continue meeting consumer demand for newer, more awe-inspiring electronics featuring the latest technology, the question remains what to do with the last generation of products that have lost their wow factor.  With electronics at price points attainable by more consumers than ever – combined with our throw-away society – millions of tons of toxic electronics are discarded in landfills annually.

While the federal government has yet to enact any e-recycling mandates, it has designated as “hazardous” various materials that make up electronic devices, such as CRTs. A hazardous designation makes these materials subject to special, more expensive and rigorous handling procedures under the federal Resource Conservation and Recovery Act (RCRA). To avoid or mitigate these regulations, electronics must be reused or recycled.

However, 25 states have implemented some type of regulation that governs the disposal of e-waste. According to the Environmental Protection Agency, state e-waste regulations can be stricter than the federal requirements. Some states enforce outright bans on certain electronics from being disposed in landfills, while others impose annual impact fees on manufacturers and/or require manufacturers and even retailers to assist in recycling efforts.

E-waste is inevitably going to become a larger and larger concern and focal point for legislation. Environmental activists will only get louder as the problem continues to grow. Although declaring a product “beyond economical repair” is all too common in electronics servicing today, that bar is likely to drop a lot lower in the future.  Repairing a product even when the cost is more than replacing it may one day become a necessity due to high disposal fees and cumbersome regulations. Recycling electronic components to use in repairs will also naturally become more standard.

While many within the electronics supply chain have already taken aggressive steps to effectively limit e-waste impact and become green corporate citizens, we will never be able to let up on the gas. Extending the life of electronics through repair service or parts harvesting will most certainly be a more crucial mainstay of the industry in years to come.

But with Consumer Electronics repair shops closing because they can’t turn a profit or their owners are retiring, what does the future hold? The Consumer Electronics service industry outlook may not actually be as bleak as it appears, but it also may not be able to hang on long enough to see the tide turn.

If manufacturers don’t begin to better support their service networks today, they may be in for a tougher time dealing with end-of-life electronics later as e-waste regulations presumably tighten. As long as the next generation of electronics keeps flooding our markets, we’re going to need eco-friendly disposition of unwanted devices. Repairing, reusing or recycling for parts remain the most viable options to keep old electronics from becoming trash – and ample Consumer Electronics aftermarket support businesses will be needed to handle the continual influx.

While parts distribution may be perceived as somewhat of a “low-tech” business, the reality is that many suppliers do employ valuable functionality in their operations. However, not all the available tools are being used by customers.

One such tool is SOAP integration. SOAP – or Simple Object Access Protocol – is a way for a program running in one kind of operating system to communicate with a program in the same or another kind of operating system by using the web’s Hypertext Transfer Protocol (HTTP) and its Extensible Markup Language (XML) as the mechanisms for information exchange. Think of it as sort of a translator that is able to exchange data between disparate systems.  Encompass offers web services description language (WSDL) files for all of our services.  This provides a machine-readable description of how the service can be called, what parameters it expects, and what data structures it returns.  Most modern programming languages can use this to automatically build a basic call to the web service.

In parts distribution, suppliers that can offer their customers SOAP connectivity are able to provide instant access to real-time information on inventory and pricing, order placement, returns services and more. This dynamic interface is especially helpful in ensuring up-to-the-minute pricing, which can fluctuate throughout the day.  Another key benefit is having immediate visibility to available parts and the ability to place an order right then and there – locking in pricing before it changes and claiming a part before it is sold to someone else.

The alternative is to receive inventory and price files from a distributor a few times a day like many customers do.  However, after the file is sent, pricing can change and parts previously displayed as available could be sold. File uploads just can’t provide the same reliable information as real-time SOAP interfacing.

Encompass offers SOAP service to our customers, which enables customers to:

• Search by model
• View a model parts list
• Obtain parts information
• Create orders
• Check order status
• Get invoice information
• Cancel an order
• Generate a return request

This allows Encompass’ data and services to be embedded in your business applications as you choose.  There are some development time and costs involved, but the instantaneous benefits could be immense depending on your organization’s parts volume.

If you’re interested in exploring SOAP connectivity with Encompass, please contact Brent Blair, Vice President of IT, at 800.432.8542, ext. 1331 or visit encompassparts.com/soap for a complete list of tags and available code.

This year’s Consumer Electronics Show continued showcasing products around the theme of “connected convenience” with everything from refrigerators to door locks featuring smart capabilities. The major manufacturers are ramping up efforts to capture more wallet share by owning the home. Ideally, they want their brands in the living room, kitchen and laundry room, and even in the hands (or wrists) of consumers on the go.

Wearable technology was on prominent display at CES with an entire space devoted to devices that track sleep patterns, fitness levels and just about anything else emanating from the human body. LG and Samsung unveiled an array of innovative home appliance products, with Haier fast on their heels. Far from being on the decline, the television industry proved it is evolving to create new and exciting technology. Curved, translucent, and 4K were the trend from both established and emerging television manufacturers.

It won’t be long before we see drastic changes in aftermarket support. With so much new technology being built into the household, today’s professional service providers are
going to need much more specialized training to take advantage of future opportunities among multiple product categories. This comes at a time when technical training is not nearly as common as it once was – when was the last time your local high school offered a “shop” class?

As many trade associations already are preaching, technicians can no longer rely on a finite skill set. They must be able to tackle repairs for a wide variety of products and then also consider offering other valued-added services to remain viable.  With technical schools such as DeVry and the U.S. military serving as the primary sources of training, the
industry should look for new ways to make this career path more desirable.

With a dearth of skilled labor and training opportunities, aftermarket service providers like parts distributors are going to need to step up efforts to assist repair techs in the field with everything from triage for trip avoidance to in-home troubleshooting to identifying lower cost compatible parts for post-warranty repairs.  Although this may not be a primary source of revenue or profitability, it will be necessary to
provide these services to remain relevant. While manufacturers do offer great training opportunities for in-warranty service networks, that support should also be available after the warranty period expires. The risk of losing a customer to a competitor is never greater than when that customer experiences product service issues.

Encompass has been working hard to contribute to the success of our tech customers. We’ve got a full-time photographer on staff who takes hundreds of part pictures a day in our warehouse to get loaded to our e-commerce website. We know that pictures help eliminate errors of misidentifying parts and assists with first-time repairs. We are working with companies such as Sony, Panasonic, Samsung, and Haier to capture more repair data and technical notes for field support.  We also post service manuals and provide monthly consumer electronics tech tips to deliver as much valuable information as we can. Encompass will continue looking for new and better ways to support our tech customers.

As product technology continues evolving, the aftermarket support chain must adapt and stay ahead of the curve with information sharing and improved skill sets.

In business, we all strive to be highly efficient and productive, but how do we know if we are actually achieving these goals? We really can’t know – unless we employ comprehensive performance tracking processes.

In distribution, we are measured on how quickly we can accurately deliver goods to the client. This can be tracked through the number of lines picked and packages shipped within a given timeframe. Data for warehouse performance tracking is typically gathered through computer monitoring and RF (radio frequency) guns, which are used to store electronic barcode information from packaging, labels and bin ID tags. With electronic tools, each core task in the warehouse – such as picking, labeling, packing and shipping – can be monitored in real time for speed and accuracy at both the department and individual employee level.

With this type of visibility, warehouse managers can easily identify specific areas and processes that need improvement as opposed to an educated guess, which could ultimately lead to ineffective changes. Managers can also use performance data to adjust scheduling and ensure staffing levels are sufficient at peak times.   All of this information can be used to maximize efficiency and control costs, while pinpointing top achievers and possible weak links.

Employee incentive programs and evaluations can also be driven off this analysis.  At Encompass, we use television monitors to post performance data for each task so employees know how they’re doing compared to co-workers.   This creates a competitive environment in which we reward those who exceed hourly goals in stocking, picking and packing each month.  Baseline goals are set based on historical data. It’s a great way to keep our team from getting complacent and provides a little friendly competition, while also helping to improve our operations.

No matter what role your business plays in the supply chain, it is essential to have clear visibility into the performance of all aspects of your operation.  Establish specific expectations and metrics to analyze execution and then plan enhancements. And you don’t need to pay an expensive consultant or earn an MBA to measure and improve your operation.  Local schools often provide process improvement training like lean Six Sigma, which can also be taken online. It’s well worth the investment, time and effort to educate your team on best practices to enhance your operations and track the outcome.

In last month’s blog, I talked a lot about the importance of superior customer service. Recently, I re-read the always insightful book, How to Win Friends and Influence People by Dale Carnegie. The section “Win People to Your Way of Thinking” really resonated with me from a service communications perspective. Here are some particularly significant points:

· The only way to get the best of an argument is to avoid it.

· Show respect for the other person’s opinion. Never say, “you’re wrong.”

· If you are wrong, admit it quickly and emphatically.

· Begin in a friendly way.

· Get the other person saying, “yes, yes” immediately.

· Let the other person do a great deal of the talking.

· Let the other person feel that the idea is his or hers.

· Try honestly to see things from the other person’s point of view.

· Be sympathetic with the other person’s ideas and desires.

Think about these ideas the next time you’re in a difficult situation and trying to please a customer. It could mean the difference between that customer doing business with you again…or your competitor.

Encompass wishes everyone a very happy, healthy and prosperous 2013!

When your organization is asked to respond to an RFP, the prospective client likely already believes you have the capabilities they need. But don’t blow this opportunity by assuming the sale and submitting a shoddy response.

At Encompass, we are fortunate to have had the opportunity to participate in countless RFPs over the years.  I’ve seen virtually every format imaginable – from one to two basic pages in a Word document to sophisticated, automated tools.  In the end, we win some and lose some, but always view RFPs as a valuable learning opportunity.

A thoughtful, carefully crafted RFP response fully showcasing your organization’s capabilities and strengths can set you apart from the competition. If you’ve
made the short list to receive an RFP, here are five key strategies to creating a highly-effective response:

The RFP process can be cumbersome and time consuming, but can yield lucrative benefits. Even if your organization is not selected this time, you could leave a favorable impression for future bids and be first on the list for the next one. Also, keep in mind you could have a more immediate opportunity if the client’s project begins to falter.

Plus, people reviewing your RFP for one company may land at another where there is better opportunity.  Developing a high-quality, well thought out response is critical to your chances of winning – if not now, then maybe down the road.

At Encompass, we have a number of exciting initiatives implemented or planned in 2014 to enhance service and add value to your organization:

• Expanding and upgrading warehouse operations at our Lawrenceville distribution center, improving overall efficiency by contracting with a facilities management firm to evaluate our
  warehouse workflows and implement additional processes to ensure we are consistently operating with maximum effectiveness.
• Recently added a night shift to ensure all receipts are concluded same day for increased volume and to maintain our service level commitments.
• Incorporated bar code receiving and advanced shipping notifications to help improve stock receipt accuracy and efficiency.
• Augmented inventory levels across the board to improve our same day fill and to meet customer demand.
• Negotiated new aggressive shipping rates with our national carriers to lower customer freight costs and improve delivery times.
• Successfully expanded into the Major Appliance parts market with new additions such as Electrolux, Dacor and De’Longhi to complement our LG and Samsung lines, providing more “one-stop”
  sourcing.
• Enhancing our mobile applications to enable partial part number searches and improve BOM lookup, providing more valuable tools in the field.
• Extending hours of operation (8 a.m.-8 p.m. and weekend hours), improving delivery and personal customer assistance.
• Improving the quality of packing to provide a more consistent and safe parts delivery experience.
• Installing a new phone monitoring system to enhance the call center experience, as well as adding new personnel and developing advanced customer service training programs and performance
  metrics for frontline representatives.

Change is never easy, but it is the only way to keep the ball rolling successfully.  Just because it’s been done one way for 50 years doesn’t mean it’s the right way today.  Continue to be innovative with your change
and avoid complacency.

Approaching a new year is always a great opportunity for both reflection and making a fresh start. Every year I make a list of things I would like to improve in myself. I then use this list as a reference to gauge my success as a person and reflect upon it over the new year. This year I have asked my leadership team to do the same so that we can all share our personal goals to improve our lives and become happier and more successful people/leaders/parents.

I encouraged the team to focus on personal goals rather than business; by identifying our own shortcomings and/or areas that we can improve upon, we can work toward making changes that can have a positive impact on others.  I truly believe that success is directly connected to surrounding yourself with good people. Some examples of personal goals include:

Consider holding a goal sharing exercise with your own teams. It could help build camaraderie, while providing a forum to exchange ideas on making meaningful, life-impacting improvements.

Best wishes for much happiness and success in 2014!

Last week, several colleagues and I attended the annual National Professional Service Convention of the National Electronic Service Dealers Association (NESDA). This was my 15th NESDA convention, and I have seen the event change dramatically over the past few years.  It’s no secret that the consumer electronics repair industry has slowed considerably from the heyday of component level repair and less reliable technology.  Just a few years ago, the NESDA annual convention was double the size it is today.

However, one thing that remains a constant is the indomitable spirit and resilience of the membership. Instead of bemoaning the decline, many members are diversifying into other product categories and verticals, such as  appliances, to shore up their businesses.

They are also seeking to innovate outside their traditional comfort zones. During a session for sharing best practices, one participant urged others to leverage social media to boost their businesses by asking customers to post positive comments online.  Another idea was to optimize business websites and boost traffic by incorporating relevant keywords. The participant pointed out that members can easily do this on their own like she did and cut their advertising budget in half.

To continue surviving in the CE industry, we must all seek creative ways to remain relevant and offer services that customers want at an affordable price. The most forward-thinking businesses will figure out how to be hyper-efficient and drive costs out of their operations so they can gain share in a still highly-competitive market. Technology and market conditions will keep evolving, and we have to evolve our businesses along with it or risk getting left behind.