DIRECTV, Inc., has been selling television satellite systems since its founding in 1994. With over 225 channels, the company offers an extensive programming selection to homes and businesses across the country. Initially, equipment to receive DIRECTV service was sold to customers primarily through third-party retailers such as major electronic stores and independent dealers.
But when parent company Hughes Electronics acquired Primestar 4one of DIRECTV 9s major competitors 4in 1999, it was necessary for DIRECTV to begin dealing directly with end customers in converting Primestar 9s subscriber equipment. The purchase expanded DIRECTV 9s customer base by approximately 2 million subscribers, and DIRECTV established a 24-month plan for the conversion. In order to transfer these customers, DIRECTV would have to send each subscriber the requisite DIRECTV satellite dish, digital set-top boxes, and remote control.
With so many customers to convert, DIRECTV had to completely rethink fulfillment and returns procedures. Pleased with the reliability and flexibility of FedEx shipping and stock management in the past, the company turned to FedEx to help handle the demanding transition. Streamlined processes increased efficiency DIRECTV had managed small equipment distribution projects but the Primestar acquisition required a greater scale operation.
Existing fulfillment and return operations were initially set up to ... more. less.
support shipping 500 boxes per month to customers and third-party resellers. But the acquisition meant that shipping volumes would drastically increase, practically overnight. cWhen we acquired Primestar, we had to convert subscribers to DIRECTV service within 24 months, d explains Jerry Littman, DIRECTV Director, IT Business Relationship Group.<br><br> cFedEx responded by creating a scalable solution that took us from handling 25 shipments a day to 10,000 per day without skipping a beat. d To manage higher shipping volumes, DIRECTV needed to increase both shipping and warehouse capacities. In response, FedEx created a high-volume stocking and shipping process that networked Synapse " , a Warehouse Management System (WMS), and FedEx ® Ship Manager Workstations using FedEx Net ® .FedEx Net is a value-added network (VAN) that enables information exchange between disparate computer systems. By integrating shipping and warehousing data with DIRECTV 9s existing system, the company can achieve supply chain visibility for efficient inventory management.<br><br> Networking existing systems and outsourcing warehousing also helped DIRECTV quickly ramp up operations with minimum capital investment. When an order is initiated from the sales channel 4third-party reseller, call center, or in this case, the Primestar customer database 4it is sent directly to FedEx. The order information progresses via FedEx Net to the WMS, where the product is picked and packaged for shipping.<br><br> The data is simultaneously sent to both DIRECTV 9s invoicing system to charge for units sold and to the FedEx " By integrating FedEx systems with DIRECTV systems and outsourcing warehousing, DIRECTV and FedEx rapidly created a scalable solution with minimum capital investment. " Through the FedEx network, DIRECTV is able to simulta- neously communicate order data to multiple departments, decreasing lag times, speeding order fulfillment, and increasing data accuracy. " Integrated FedEx NetReturn ® API enables customers to conveniently arrange their own return shipments via the Internet or phone 4reducing error and streamlining the process for both DIRECTV and its subscribers.<br><br> FedEx Helps DIRECTV Handle Explosive Growth. CASE STUDY DIRECTV The FedEx Supply Chain Solution. Ship Manager Workstation.<br><br> Concurrently transmitting order information to all involved departments expedites the shipping process by eliminating internal lag times. When the order is ready for distribution, a shipping label is created and a tracking number is assigned. As each order is filled, a confirmation e-mail can be sent to the recipient with all the shipping and tracking information, so that the reseller or customer can track the order in real time 424 hours a day 4on fedex.com.<br><br> DIRECTV ships equipment directly to sales partners and end customers. Orders can be shipped as either individual parcels or in bulk for cost-efficiency and easier handling in transit. Each shipment is assigned a clicense plate d with all the necessary shipping information and a consolidated tracking number, as well as a vendor ID code and order serial numbers.<br><br> Access to this detailed information enables resellers and DIRECTV to reference or track orders by multiple pieces of information. License plating also helps identify customer activation, as well as speed credit on order returns. Returns Process completes the cycle DIRECTV also integrated FedEx NetReturn API to streamline the returns and repairs processes and further enhance customer service.<br><br> FedEx NetReturn API is a customizable returns management solution that simplifies the returns process for both a company and its customer. By integrating FedEx NetReturn API into its system, DIRECTV is able to automate and monitor returns by enabling customers to arrange their returns electronically. Shipping and tracking information is input into the system when the return order is created.<br><br> Because each package is assigned a FedEx tracking number, both DIRECTV and its customers will be able to monitor their returns in route back to the warehouse. cWe want to make the customer experience as easy as possible, d explains Littman. cWith integrated FedEx NetReturn API, the returns process is smoother for us as well. d Returned orders are handled in one of two ways.<br><br> If it is an undeliverable item, the FedEx fulfillment center receives and restocks the item into inventory. Using the order number, returns are logged into the WMS. The WMS sends the returns information through FedEx Net to DIRECTV 9s Order Management System (OMS) to speed customer credit.<br><br> If the return is damaged or needs repair, the customer either calls DIRECTV 9s customer service or goes to the corporate website to initiate a return. DIRECTV creates a return order through FedEx NetReturn API by uploading customer information directly from its OMS. A return label can either be sent over the Internet for the customer to print and drop off the package at an authorized FedEx drop-off location; or DIRECTV can dispatch a FedEx courier to print a return label at the customer 9s location and pick up the package for return delivery.<br><br> The return is then sent directly to DIRECTV 9s repair facility where the FedEx Signature Proof-of-Delivery triggers the customer financial settlement process for the returned item. Once the item is repaired, the repair facility sends an Advanced Shipping Notice (ASN) to DIRECTV and the FedEx fulfillment center through FedEx Net. The FedEx fulfillment center receives and processes the repaired products as inbound RESULTS SUMMARY The effects on DIRECTV 9s supply chain were immediate.<br><br> By using FedEx Net to simultaneously communicate among the Warehouse Management System, FedEx Ship Manager Workstation, and DIRECTV 9s invoicing system, both order and inventory accuracy increased while cycle times decreased. cWith FedEx Net, we 9re able to process up to 13,000 orders in one shift, d explains Littman. cBy sharing information, we can eliminate lag times and get maximum efficiency with minimum manpower. d inventory that is placed into stock for future fulfillment.<br><br> Throughout this closed-loop process, DIRECTV maintains product visibility to facilitate operations planning, improve inventory management, and increase customer satisfaction. Growing bigger and better With its 9.8 million-subscriber base increasing by the day, DIRECTV is confident it is equipped to handle future growth. Alliances with key retailers have brought in even more customers and DIRECTV now sells direct to these consumers.<br><br> cWith FedEx, I know we can handle any sudden increase, d says Littman. cFedEx has proven its ability to adapt to our needs as fast as our plans change. I don 9t think any other company could do that for us. d The introduction of FedEx ® Home Delivery, a residential delivery service, provides additional customer service opportunities.<br><br> As the number of direct-to- customershipments increases, DIRECTV is considering cost-efficient shipping and home delivery by appointment 4without sacrificing reliability or customer service. One of the country 9s fastest growing satellite television suppliers, DIRECTV shows no sign of slowing down. cWe 9re expanding into more markets now than ever before, d says Littman. cAs we create more opportunities for growth, we 9ll count on FedEx to help us keep ahead of our competition. d DIRECTV FedEx Net Customer DIRECTV Order Management System Third party reseller Delivery of product Warehouse Management System Invoicing Orders for satellite equipment are sent from various channels directly to DIRECTV.<br><br> Order information is sent via FedEx Net from DIRECTV's Order Management System to the Warehouse Management System. Order information is simultaneously sent to both DIRECTV 9s invoicing system and to the FedEx Ship Manager Workstation. The order is picked and packed in the FedEx fulfillment center.<br><br> The FedEx Ship Manager Workstation calculates a shipping rate, assigns a tracking number, and generates a shipping label. Shipment status information is sent to DIRECTV's Order Management System where it is available to handle customer inquiries. The package is picked up by FedEx, scanned, and delivered to the customer.<br><br> ORDER MANAGEMENT PROCESS FedEx Ship Manager Workstation shipping labels OR Information flows Physical flows RETURNS PROCESS Return delivery of product FedEx NetReturn API DIRECTV repair facility Customer requests return through DIRECTV website Customer calls DIRECTV Customer Service to request a return FedEx prints return shipping label onsite Customer prints return shipping label via the Internet OR OR Customer calls DIRECTV Customer Service or visits website to initiate a return. DIRECTV creates a return order through FedEx Ne tReturn API. FedEx NetReturn API uploads customer information directly from its Order Management System.<br><br> Customers can automatically print their own shipping labels via the Internet and drop off the package at an authorized FedEx dr op-off location; or, FedEx picks up the shipment at the customer's location and prints the return shipping label for customers who called in the ir return via phone. The return is sent to the repair facility where the FedEx Signature Proof-of-Delivery (SPOD) triggers the customer financial se ttlement process for the returned item. The item is repaired and an Advanced Shipping Notice (ASN) is sent to DIRECTV and FedEx fulfillment center through FedEx Net.<br><br> The FedEx fulfillment center receives and processes repaired products as inbound inventory that is restocked for future fulfill ment. Return order created through FedEx NetReturn API in one of two ways: FedEx Net DIRECTV FedEx fulfillment center ASN ASN DIRECTV Order Management System FedEx SPOD Information flows Physical flows CASE STUDY DIRECTV