The Next Delivery? Computer Repairs by UPS
By Geoffrey James

(Business 2.0) – When people think of UPS, they usually think of brown delivery trucks and guys in shorts dropping off packages. They do not think of laptop repairs. But that's exactly the business UPS has decided to enter.

In a first-of-its-kind deal for the parcel-delivery industry, Toshiba is handing over its entire laptop repair operation to UPS Supply Chain Solutions, the shipper's $2.4 billion logistics outsourcing division. UPS will send broken Toshiba laptops to its facility in Louisville, Ky., where UPS engineers will diagnose and repair defects. Consumers will notice an immediate change: In the past, repairs could take weeks, depending on whether Toshiba needed components from Japan. But because the UPS repair site is adjacent to its air hub, customers should get their machines back, as good as new, in just a matter of days.

What persuaded Toshiba to let a shipping company mess with its motherboards? It turns out that the challenge of computer repair is more logistical than technical. "Moving a unit around and getting replacement parts consumes most of the time," explains Mark Simons, general manager at Toshiba's digital products division. "The actual service only takes about an hour." UPS already has experience in the field: The company has serviced Lexmark and Hewlett-Packard printers since 1996 and has performed initial inspections on laptops being returned to Toshiba for service since 1999.

The expanded Toshiba relationship is another step in UPS's strategy to broaden its business beyond package delivery into commerce services, according to Supply Chain Solutions vice president Dan Brutto. The company already works with clients to manage inventory, ordering, and customs processes, and just introduced a service to dispose of unwanted electronics. But new offerings require new skills: To take on laptop repair, Supply Chain Solutions put 50 technicians through a Toshiba-certified training course.

Of course, UPS may have a hard time competing for repair contracts with big IT outsourcers like Unisys, which fixes computers for Dell. "UPS delivers packages," says Rob Enderle, principal analyst at tech research firm Enderle Group. "For many folks, the thought of UPS guys opening their PC and attempting to repair it is really scary." Still, if Toshiba customers are more satisfied with the new UPS repair services, other electronics manufacturers may sit up and take notice, says Roger Kay, VP for client computing at research firm IDC. As he puts it, "A logistics partner who can also do repair is a rare and wonderful thing." And if the partner's employees also happen to look good in shorts, all the better. -- GEOFFREY JAMES