ABSTRACT
The business of depot repair* has experienced significant changes over the last 30 years, particularly as related to its role in the high tech market. As indicted in earlier chapters, depot repair is a key element in the reverse logistics (RL) and closed loop supply chain (CLSC) processes, taking returned material, parts, subassemblies, and whole units in, repairing or refurbishing them for reuse, or cannibalizing or disposing of them in secondary markets. This industry has experienced four phases of growth since the early 1980s. During the first phase (pre-1980s) of the market life cycle, traditionally the business of centralized depot repair was typically done by the original equipment manufacturer (OEM) as a service to its customers. These internal depots were operated as cost centers in support of product sales and were usually inefficiently run as “job shop” operations by the manufacturing organization, typically using excess labor capacity in slow production periods. Relatively low priority was given to this work, and, thus, depot repair cycle time from receipt to completion of repair was very slow (measured in minutes). As manufacturers moved to reduce the life cycle of their products in order to encourage more new product
and systems sales, depot repair was generally downsized or, in some cases, eliminated by the manufacturer. In addition, many manufacturers refused to provide depot repair services for competing independent service operations and third party maintainers.
