CASE STUDY CONTRACT LOGISTICS

www.kuehne-nagel.com

Virgin Media Reverse Logistics

julie.sampson@kuehne-nagel.com

Virgin Media are a leading provider of entertainment and communication services in the UK. Through a series of acquisitions, Virgin Media became the UK’s first quad player provider offering digital TV packages, broadband access, landline and mobile communications.

BACKGROUNDVirgin Media identified a business imperative to transform its supply chain to support its rapidly growing business, but recognised that internal factors limited its ability to accomplish this, including limited supply chain expertise, multiple systems, and a lack of high-quality data. Kuehne + Nagel’s long term partnership with Virgin Media started in 1999, and rapidly transformed their supply chain with significantly improved customer service, operational, and financial metrics.

CHALLENGE

Improved environmental performance was one of Virgin Media’s key objectives in awarding the contract. Reverse logistics is a highly critical part of their supply chain operation, and is used to great effect to achieve optimum value out of returned products, and reclaim value for the customer.

SOLUTION

Kuehne + Nagel consolidated Virgin Media’s 11 warehouses into a single 225,000 ft2 National Distribution Centre operation within Kuehne + Nagel’s shared Wellingborough warehouse in combination with 52 Field Store Locations (FSL).

The Wellingborough site is classified as an Authorised Approved Treatment Facility (AATF) for recycling. Innovative packaging solutions were also designed to include reusable packaging for the end consumer – the outbound box is designed to be used for the return journey, thereby reducing waste and promoting ease of use for Virgin Media’s customers.

Kuehne + Nagel now manages the entire end-of-life process, including compliance with the Waste Electrical and Electronic Equipment (WEEE) directive and other environmental regulations.

AWARDS

Kuehne + Nagel won top prize in the Waste and Resource Management category at the Sustainability Leaders Awards 2013.

Kuehne + Nagel collaborated with Virgin Media to reduce the 127 tonnes of waste sent to landfill each month, becoming a zero-to-landfill operation by October 2013. Virgin Media was able to ensure all its waste is now recycled, reused or incinerated to generate energy.

CASE STUDY CONTRACT LOGISTICS

www.kuehne-nagel.com julie.sampson@kuehne-nagel.com

KEY FEATURES

Set Top Box Reverse Logistics

CASE STUDY: Virgin Media Reverse Logistics p. 3

Distribution Centre

Into Stock WEEE Disposal

Test

OEM Repairer

Home

Engineer

Collection Agents

Preferred Repair Agent Disposition Route

Drop off at local store

Pre-paid pizza box

Service call with swap

Can’t / won’t pay

Warranty No warranty If no ‘live’ demandBER

If in demand

Set top box reverse logistics

CUSTOMER PREMISE EQUIPMENT (CPE)

• Returned via Royal Mail / Engineer boxes / Collect + network

• Reverse handling − Serial number tracking − Warranty management − Testing of remote controls /

HDMI and power leads includes PAT testing

− Recycling of cables and product disposal

− Removing hard drives / cleaning data to CESG or equivalent standard

NETWORK EQUIPMENT

• Engineer returns product via Field Store Locations (FSL)

• All units booked in and checked at unit level

• Virgin system – pre-determined disposal routes

• Repair agents / Disposed of or re-graded

• Nagra (Activation) cards – screened and cleaned

RESULTS

• The centralised solution offers end-to-end control of all returned product

• Automated sortation realises labour savings which are then passed on to the customer

• Increased levels of compliance provides quarterly evidence of environmental performance

• Revenue generation for the customer has been increased by 80% per annum