INTRO
While kitting & packaging may be considered the last step in the manufacturing process, it is fundamental to putting forth an engaging consumer experience.  By working with retailers to customize packaging for marketing promotions or other offerings, manufacturers can target their efforts to a specific audience, which can result in increased sales and strengthened relationships with retailers.  Innovative kitting & packaging processes can also lead to dramatically reduced shipping costs, which further boost profits.

Realizing the significance of this tailor-made approach, TomTom worked with ATC Logistics & Electronics (ATCLE) to develop customized kitting & packaging solutions geared towards their retail partners.  In addition, the companies worked together to substantially lower shipping costs using creative packaging techniques, which decreased the overall footprint of their product.  ATCLE utilized its materials planning tools to reduce turnaround times and inventory levels, and its software configuration tools to install updated software versions.  This enabled TomTom to upgrade its devices on-demand to meet the needs of its customer base. 

This document details how ATCLE achieved these improvements and the tangible benefits for TomTom.

BACKGROUND
As the world’s leading navigation solutions provider, TomTom controls market shares of approximately 50 percent in Europe and 25 percent in the United States.  Since 1991, TomTom has defined the personal navigation category and experienced phenomenal growth.  Annual revenue has grown from €8 million in 2002 to an impressve €1.7 billion in 2007.  In 2007, annual profit increased by 43 percent to €317 million.  TomTom boasts an expansive install base of approximately 20 million units worldwide.

PACKAGING INNOVATION
Like many companies, TomTom’s original equipment manufacturer (OEM) suppliers are based in China, which presented a myriad of challenges including:

1. Difficulties when there is a need to change or upgrade software
2. Delays in meeting retail requirements for exclusive packaging or special offers

When faced with making these adjustments, TomTom was forced to unpack, modify, and repack each device, which created inefficiencies and extended lead times to key retailers.  This delay was not cost effective and could potentially reduce market share during peak demand periods.

To improve the process, TomTom looked to ATCLE for its sophisticated packaging processes for electronic devices and advanced technological capabilities to perform product upgrades as needed.  ATCLE quickly offered solutions that dramatically streamlined TomTom’s supply chain along with tangible value-adds.

Recommendations included the shipment of unpackaged devices via bulk freight to ATCLE’s strategically located domestic facility, which created a "last-mile" solution for fulfillment.  Previously, approximately 200 devices were being shipped per pallet from China.  Upon implementation of a bulk import strategy, TomTom now ships approximately 900 devices per pallet, resulting in a significant reduction in shipping expense.

FULFILLMENT AND HIGHT VELOCITY TURNAROUND
For additional efficiencies, ATCLE assumed responsibility for the procurement of packaging materials and accessory items.  This move helped to streamline the supply chain, thereby reducing costs and expediting the delivery of finished goods to the retail channel.

By managing TomTom’s packaging on site, ATCLE was also able to decrease turnaround time for device refurbishment, because all materials are already on hand.  This circumvented the need for a lengthy and expensive journey back to the OEM for the same work.  Ultimately, this keeps products more readily available in the supply chain so they can be quickly passed to consumers and generate revenue.

The concentration of value-added services in the "last mile" of the supply chain provides greater flexibility and dramatically improved delivery times allowing TomTom to better meet the needs of their large retail customers.  What’s more, they were able to offer custom packaging to their retailers for special promotions or other marketing initiatives to further enhance market share and profitability.

QUICK RESPONSE CAPABILITIES IN NORTH AMERICA
The ability to efficiently upgrade products after they have been shipped by the manufacturer can be an expensive and daunting task.  Since TomTom is extremely proactive in enhancing the consumer experience, they needed an effective solution.  One year after its successful North American launch, the company developed an upgraded map application to improve the functionality of its devices.  While this was an exciting development, the company needed to deliver this upgrade to more than 150,000 customers in a narrow timeframe.

To successfully execute this initiative, ATCLE worked closely with TomTom to implement a solution to facilitate high-velocity forward fulfillment of more than 100,000 upgrades in only a matter of weeks.  This allowed TomTom to improve the customer experience and helped strengthen their standing in the marketplace.

PROVEN RESULTS
ATCLE’s proven capabilities, reliability and flexibility, along with an exceptional operational and technical infrastructure, have helped TomTom meet their business objectives and continue their stellar growth.

Results include:

• Significant reduction of freight expenses
• Tangible profitability improvement attributed to North American supply chain efficiencies
• Improved flexibility to offer promotional concepts that differentiate TomTom from competitors
• Increased outbound shipments more than ten-fold during peak demand
• Reduced turnaround for repair and refurbishment from two-five weeks, to two-five days