Providing GE Security’s Homeland Protection Business with the Global Logistics Support It Requires

by RLM Contributor

Reverse Logistics Magazine, Edition 15

Background

GE Security’s Homeland Protection business is a leading provider of products and services that defend personnel and property in airports, government buildings, high-risk organizations and facilities around the globe (including military bases, borders, airports and ports). GE Homeland Protection is a wholly-owned indirect subsidiary of the General Electric Company (NYSE: GE) that brings together world-class trace detection, computed tomography (CT), and X-ray diffraction technologies into a single business offering that supports a wide range of security activities.
 
Essentially, GE Homeland Protection plays a key role in helping its many worldwide customers to protect their respective people, assets and communities. Its security device products and services include checked baggage screening, checkpoint protection, explosive detection and other homeland security-related activities.
 

Identifying the Key Challenges and Selecting the Right Global Logistics Provider

GE Homeland Protection requires—and manages—an extensive field force located at major airports all over the world. As you might imagine, it needs timely service and support at all of its locations. It also requires an aggressive response time due to the critical nature of its business. In fact, it typically needs to have parts available on-site within a 4-hour requirement window—an international 4-hour requirement—and this continues to be one of the greatest challenges it faces. Accordingly, the business needed to find a global logistics provider that had depots located all over the world within proximity of its equipment locations. GE believes very strongly about addressing customer expectations, and it was looking for a world-class logistics provider to help it do just that.
 
In 2006, GE Homeland Protection was faced with a need to replace its logistics vendor.  Its mission in that effort was to find an efficient logistics solutions provider who could help it not only meet—but exceed—its customers’ requirements for expeditious and effective service on a global basis. As part of that process company management used the following checklist to find the right provider (Figure 1).

 
 
When GE Homeland Protection began its selection process for a global logistics solution provider, the main goals they were looking to attain included:

• Improving their inventory accuracy. This was the business’s principal driver.
• Improved availability of parts for their customers.
• The ability to streamline the entire returns and reverse logistics processes.
• Increased visibility of the inventory.
• The ability to significantly reduce the inventory of parts that need to be repaired.
• The ability to streamline the data.

The company’s relationship with Flash Global Logistics (Flash) began in February-March 2006 after a thorough selection and evaluation process.
 
Flash Global Logistics, Inc. is a global third-party logistics company exclusively focused on providing critical parts and inventory management supply chain solutions for its customers. As such, Flash’s mission was judged to be very similar to that employed at GE Homeland Protection. Flash Global Logistics’ services include global time-sensitive deliveries available in 90 minutes, 2 hours and 4 hours, as well as the ability to provide real-time global inventory management and visibility via its proprietary inventory management software, branded as FLASHTRAC©. What also appealed to GE Homeland Protection about FLASHTRAC© was its ability to be fully customizable based on customer requirements—and they had requirements!
 
In the United States, Flash Global Logistics maintains seven Distribution Centers (DCs) and can outsource all of its DC services in support of critical parts and goods, providing labor and all associated services. Flash also operates its Command Centers (i.e., call centers), technical support and critical inventory management across a global network of 13 Multi-Client DCs and 570-plus Forward Stocking Locations (FSL), making it a one-stop shop provider for logistics solutions. Flash Global Logistics can also assist its clients with all aspects of inventory planning services; as well as International Trade consulting; Importer of Record (IOR) services; transportation management services, domestically and abroad; and import/export compliance.
 
GE Homeland Protection did its due diligence in evaluating prospective solutions providers, and Flash Global Logistics came out first when compared to each of the other alternatives; but now GE Homeland Protection and Flash both needed to work closely together to come up with a design for implementing precisely the right solution.

Implementing the Right Global Logistics Solution

Historically, GE Homeland Protection’s global returns process was decentralized. However, Flash worked directly with GE to create a new, much more effective, return pack process supported by two distinct carriers, as determined by specific need. As a result of this implementation, each shipment of returnable parts now comes accompanied with a return pack that includes detailed instructions, repair tags for both good and bad inventory, specific contacts, and everything else that their field force needs to return repairable defective product.
 
This process was implemented first in the United States, where all repairable product returns were brought back to a single center. Today, at GE Homeland Protection’s request, Flash Global Logistics has allocated the necessary warehouse space at its geographic centers in Toronto, Canada and Paris, France, and provided its people with the proper training in the returns process to support all of their global requirements.
Another one of the challenges that Flash helped GE to tackle involved dealing with the problems of ongoing part number revisions. As a result of a joint effort with Flash, past and present part numbers can now be easily reconciled as part of the Flash overall logistics solution. GE Homeland Protection provided all of its part compatibility associations to Flash, which was then able to incorporate the capability to associate all of its parts, both in the outgoing requirement and incoming reconciliation process.
 
Software changes performed by Flash, as part of its ongoing IT resource offerings, were also a great help to GE in solving this problem.
 
In addition, GE Homeland Protection needed to reduce the cycle time required for getting defective parts into the repair process. A pre-existing process at Flash, the Auto-RTV Program, was modified for their own use. Previously, parts were pulled out of the central U.S. consolidation point at Flash for repair on demand from GE. The process change included placing repairable defective parts in repair vendor-specific bins on receipt, and having Flash “push” the parts out for repair on a regular basis. This helped GE maintain a more steady and consistent flow of repairs to its vendors, with none of the parts themselves having to come in to GE at all. This led to a savings for GE in repair cycle time, delay avoidance and improved parts availability. In fact, the business was able to reduce its outstanding defective inventory by as much as 55 percent.
 

Reaping the Benefits

A great deal of credit with respect to the logistics improvements supported by Flash is the result of the quality of the company’s Information Technology (IT) systems. Today, the business relies entirely on Flash Global Logistics’ data system to track all of its outbound and inbound part shipments. In fact, almost everything it does today is tracked through the FLASHTRAC© system, including forward distribution of parts, depot OH balances, shipment histories, reverse logistics, and detailed part orders in support of the field service team.
 
Overall, Flash Global Logistics, in conjunction with GE Homeland Protection, has helped to establish many specific processes that better support both the business’s inventory and customer needs, such as the auto-part receipt program; reverse logistics receipt exception reporting; managing returns; reducing the time to get returned parts back into the pipeline; and a comprehensive follow-up program.
 

Summary

If there is a story to tell, it is the accessibility and the openness between Flash Global Logistics and GE Homeland Protection focused on improving service to GE’s customers.  While there have been bumps along the way, pressing issues have been dealt with in a fact-based and solution-oriented manner and always in team fashion, together.

RLM