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In Managing Its Service Supply Chain, Nutanix Doesn't Think Small

Anticipating dramatic growth in its business, the 2009 high-tech start-up acquired an optimization tool that could easily scale up in the years ahead - yet deliver a full range of services in the meantime.

In Managing Its Service Supply Chain, Nutanix Doesn't Think Small

Bill Jhun went from working for a couple of big high-tech companies to a much smaller entity. But he still had the same need for a partner that could provide support for his service supply chain.

Jhun was a manager at Network Appliance and Data Domain (which later became part of EMC). Just under two years ago, he joined Nutanix Inc., a 2009 start-up providing distributed data center infrastructure in the form of a “virtual computing platform.”

Small as it was back then, Nutanix lacked a formalized global supply chain for managing its service parts. Service calls were being handled on the fly by internal employees, and the support operation wasn’t set up to handle rapid growth.

In both of his previous jobs, Jhun relied on OnProcess Technology, which had grown from its roots in reverse logistics and asset recovery to provide full service supply-chain optimization. Despite Nutanix’s smaller size, the vendor was a natural fit. And the timing was right for the move to a more formalized, fully scalable operation.

“It was crucial for customer service,” says Jhun, who now serves as Nutanix’s global logistics manager. Moreover, with volumes still relatively low, the company could implement the new system with minimal disruption to the organization. In the process, it could prepare for “the hyper growth that we’re starting to do now.” (Management’s expectations were validated in part by the recent announcement that Nutanix’s software would be incorporated into the servers of Dell Inc.)

Nutanix has increased the reach of its global support capabilities by 25 countries over the past year, including locations in Asia Pacific, Europe, Middle East, Africa and Latin America. Flash Global Logistics Inc. acts as the company’s third-party logistics provider on a global basis.

Dispatch volumes have increased fourfold over the past 12 months. The items are generally small – components, disk drives, cards and power supplies – and are mostly moved by integrated parcel handlers.

High-Level Support

Nutanix needed a partner that could provide high-level support for its service calls. The company employs skilled engineers who concern themselves with system troubleshooting. “Once they enter into the system what they need and hit ‘go,’ I wanted their job to be done,” says Jhun.

OnProcess follows up with dispatch management, working with Nutanix’s logistics partners to get the right parts to service personnel, and coordinating the on-site event with the customer. It then feeds the information back to Nutanix, providing delivery times and confirmation, and helping the company to maintain compliance with its service-level agreements.

Once an order is placed, OnProcess accesses Nutanix’s customer-relationship management system to make all of the necessary arrangements. Submissions by engineers show up on OnProcess’s dashboard, allowing the vendor quickly to confirm the order and communicate with the logistics provider.

Equally important is the task of asset recovery. It’s crucial for Nutanix to retrieve defective parts as quickly as possible, so that it can determine which units are eligible for refurbishment and reuse.

Nutanix’s contract manufacturer is responsible for the validation and refurbishment of parts under warranty. It performs testing and turnarounds, with OnProcess reporting on velocity, return rates and other key metrics, and tying directly into both the contract manufacturer and 3PL. “It makes a nice return loop,” says Jhun.

OnProcess’s business model arose from the realization that the failure of many companies to get their service parts back in a timely fashion was due to a lack of “things that should have been captured at the front end,” says Joseph Hamilton, vice president of business development for technology. Gaps in critical information meant that the service provider lacked visibility of parts in the pipeline, and was vulnerable to fraud as well. “As a result,” Hamilton says, “we started to migrate further upstream in our offerings.”

Room to Grow

OnProcess’s comprehensive approach gave Nutanix room to grow its service supply chain without adding internal personnel to manage it, Hamilton adds. The vendor can also accommodate additional logistics providers, if necessary.

“If and when we get to a point where we need multiple 3PLs or third-party maintenance providers, we’ve got OnProcess there as that central point,” says Jhun. “Nothing changes for Nutanix. Field engineers won’t be disrupted if I have to add someone to our network.”

Nutanix was attracted by OnProcess’s shared services model for smaller accounts. Hamilton says the company has been offering that option for about a year and a half. “We’re able to go to these smaller companies and help them scale. They don’t need a technical support organization that has to strictly focus on them.” At the same time, Nutanix gains access to a workforce that can provide round-the-clock service on a global basis.

OnProcess can easily transfer to a dedicated service-delivery model when Nutanix’s parts volume requires it. Jhun was using that option when he was at EMC.

“We’re very happy to see that OnProcess offers that shared model,” he says. “If they didn’t, I’d have to go out and find some temporary solution to bridge the gap until we got large enough.”

Jhun says the system is fully in place to support Nutanix’s service parts supply chain. (It took between three and six weeks to implement, according to Hamilton.) Looking ahead, he is open to calling on OnProcess to manage other parts of the company’s business, such as demonstration gear and units provided to the customer on a “try-and-buy” basis.

“There’s a logistics element that we might have OnProcess help us with, similar to what they’re doing now,” he says. “Certainly it’s something they could handle.”

From a parts standpoint, OnProcess could be given a more direct connection to Nutanix’s service parts-planning tool. “We might build some kind of integration so that it’s seamless,” says Jhun. “We want to automate as much as possible.”

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