This post was written by Yuji Suzuki, Manager of Japan Manufacturing Operations at Cisco. The original post can be found here.
Think of a large piece of Cisco equipment, like a carrier-class router. Now picture the product’s shipping carton: it’s a side carton that’s over seven feet (2220mm) long. Somewhere in transit, this large carton sustains a visible surface tear. Now imagine a sticker about the size of a shipping label, and sometimes, even smaller. We call this sticker an “EcoPatch.” We place the EcoPatch over that surface tear. This small EcoPatch seal has saved the enormous carton from the scrapheap (The cartons have to be scrapped and not recycled due to Japan’s Customs House rules for items that have not cleared customs).
Perhaps the EcoPatch doesn’t sound like a remedy with a big environmental impact or business value. But here’s how much the EcoPatch program has saved Cisco in Japan in just the last three quarters (May 2016 to January 2017):
- Cartons Saved From Being Scrapped: 2,656
- Total Material Saved (Pounds): 6,314
- Reduction in CO2e (KG): 7,234.81
Improving Relationships with Customers while Reducing Reboxing
Japanese customers have very strong sensibilities about quality. We are grateful for their high standards (it is, after all, the reason they are such loyal Cisco customers!). But one source of customer dissatisfaction is damaged cartons. In fact, Japanese customers will often suggest a product is damaged if the carton is damaged, and request an exchange. In the past, products were even returned as dead on arrival (DOA), despite the fact that the product had never been unpacked. Imagine the cost, waste, and frustration associated with processing a DOA for a good product.
Twelve years ago, we implemented a process called “reboxing” to help address this challenge. Once we confirm the product is not damaged, the damaged cartons are replaced at a warehouse operated by one of our largest logistics partners at Narita Airport. Our Japan Manufacturing Operations team developed extremely detailed criteria for carton damage to eliminate subjectivity and variability in judgments. This gave us a framework to determine exactly when a package needed reboxing; our sales partners embraced the new criteria.
It was a good step, even as we worked toward our greater goal of finding and correcting the root causes of damage in the supply chain. We shared the damage criteria with logistics partners to improve the condition of cartons shipped to Narita.
Avoiding Reboxing: Were We Missing Another Piece?
About four years ago, our team started exploring the idea of “repairing” cartons instead of simply reboxing. By studying historical data, it was clear we could save significantly more boxes from being scrapped if we could simply repair them. A large portion of boxes had the kind of damage that could be sealed with a simple adhesive patch. That was the origin of the EcoPatch.
Involving Cisco Partners
The EcoPatch program is a local program for the Japanese market. It isn’t written into a contract with our sales channel partners. Rather, we’ve worked with each partner individually to convey the unique value of the program and ask for participation.
In the program’s first year, one partner worked with us. By the second year, five partners were EcoPatch project participants. And today, we have 12 partners; combined, they represent 70 percent of all products sold and shipped into Japan. We continue to reach out to more partners, with the goal of extending the EcoPatch solution to at least 90 percent of Cisco products coming into Japan.
We always want to express our appreciation for the involvement of our partners, as this is a completely voluntary program. Its success depends on their enthusiasm, which is why we thank them every time we send out a box with an EcoPatch.
Other Savings with EcoPatch
One of Cisco’s logistics partners maintains the warehouse at Narita airport, where they handle all product reboxing. In any given quarter, we might see anywhere from 10,000 to 100,000 cartons processed through this logistics partner.
To ensure we’re always prepared to replace any incoming damaged cartons, we have a contract to maintain a large inventory of Cisco cartons of all shapes and sizes. Over three years, we’ve collected enough data on the EcoPatch program to tell us—with confidence—that we will have a much lower reboxing volume, thanks to the EcoPatch option. This will allow us to renegotiate the contract with this logistics partner for a lower rate that reflects:
- Reduced warehouse space required to store spare boxes
- Reduced labor costs associated with unpacking and reboxing products
- Reduced labor costs and other fees associated with scrapping boxes
Do We Want More EcoPatches?
As you can tell, we track EcoPatch statistics with avid interest. We know we can continue to use the EcoPatch to improve our “avoidance” numbers and reduce the number of cartons we must rebox. But the future isn’t a graph that shows an endless upward trend in the application of the EcoPatch; the graph we are working towards is the one that shows a downward trend in carton damage until it is eliminated entirely. I’m extremely proud of our contribution to reducing Cisco’s impact on the environment. But our ultimate goal is to see the EcoPatch become a piece—about the size of a label—of Cisco’s sustainability legacy.