Return Products Management History
In 1991 Yellow Freight System implemented a prototype core return program on behalf of PACCAR Parts Division, which is a subsidiary of PACCAR Corporation. PACCAR also owns the Kenworth and Peterbilt Truck Divisions. Yellow Logistics Services (YLS) was established in 1991 as a wholly owned subsidiary of Yellow Corporation. In 1993, YLS was charged with improving the return process created at Yellow Freight. Mike Champion was hired by YLS in February of 1994 to accomplish this task. Mike had served Yellow Freight in a variety of labor and management positions between 1978 and 1994. He refined the returns process and conceived the idea of a core tracking system.
In September of 1994, PACCAR Parts established an internal core return process through PACCAR's Dynacraft Subsidiary. As a result, the relationship between PACCAR Parts and Yellow Corporation ended. Subsequently, YLS began actively marketing the ability to handle and inspect cores under the name of Return Parts Management (RPM). As developer of the process, Mike Champion became the lead person in this marketing campaign and was successful in attracting several new customers during the ensuing months. Yellow Corporation made a strategic decision in September of 1995 to significantly reduce YLS' operations in order to focus on its primary transportation businesses. Mike Champion was given the opportunity to purchase the RPM name and existing assets being used to handle cores. As a result, Return Products Management, Inc. was incorporated on November 27, 1995, the purchase from YLS was completed on December 27, 1995, and the new company began operations on January 1, 1996. It has developed its business through the following steps:
- A customer service center, including 1-800 number access, was created at RPM headquarters in Olathe, Kansas, to start the core return process.
- A proprietary software program was written to handle the specific idiosyncrasies of the returns market, as well as provide electronic communication between remote facilities and RPM headquarters.
- Comprehensive procedures were developed, implemented, and documented for all steps in the return process.
- Warehouse space was secured in Columbus, Ohio (27,000-sq. ft.), Salt Lake City, Utah (29,500-sq. ft.), Memphis, Tennessee (75,000-sq. ft.), Guelph, Ontario, Canada (32,000-sq. ft).
Core inspection experts were hired to manage each center and train new Inspectors. Beginning in April 1995, RPM operated a central core consolidation program, including transportation management, on behalf of AP Parts North American Aftermarket Division, which is a wholly owned subsidiary of AP Parts International. AP Parts is a $500 million annual revenue company, which has served the automobile and industrial products industries for over 50 years. The largest business segments are in the Goerlich and Roadmates brand names of exhaust and brake systems.
RPM has operated a central core consolidation, inspection, and crediting program for Freightliner of Canada, Ltd. since October of 1995. Freightliner of Canada currently has a 27% share of the Canadian heavy truck market, resulting in annual revenue of over $1 billion. The RPM program has assisted Freightliner of Canada in growing its sales of Remanufactured parts by more than 11% annually, and enabled marketing programs that were previously not possible.
From July of 1995 to November of 1996, RPM operated a central core consolidation program (for brake shoes only) on behalf of Freightliner Corporation. In December of 1996 RPM began a pilot project, involving selected Dealers, to develop a comprehensive consolidation, inspection, and crediting program for all remanufactured parts. As a result of the pilot, a national production launch was made on September 15, 1997. Freightliner Corporation is the U.S. heavy truck market leader, with a share of approximately 30%, resulting in annual revenue of approximately $7 billion.
On July 1, 1996, RPM began operation of a comprehensive core consolidation, inspection, and credit program on behalf of Western Star Trucks, Kelowna, BC. This service includes complete transportation management for all Western Star Dealers in the U.S. and Canada. It also includes electronic transmission of core return eligibility from Western Star to RPM and core credits from RPM to Western Star. Western Star Trucks is a $600 million annual revenue heavy duty truck manufacturer, which currently enjoys a 1.7% market share in the U.S. and a 3% market share in Canada.
In 1997 Freightliner Corporation purchased Ford Motor Company's heavy-duty truck division (renamed Sterling Truck Corporation). In 1998 the Sterling dealer network was integrated into our core return program.
In 1998 RPM set up a used truck-dismantling center in Columbus, Ohio to serve Freightliner Market Development Corporation.
In June of 2000 RPM entered into an agreement with Volvo Trucks of North America to begin operation of a comprehensive core consolidation, inspection, and credit program. On August 1, 2000 the U.S. dealers were implemented and the Canadian dealers followed on September 1, 2000.
RPM is the market leader in the handling of cores for the Class 8, heavy-duty truck market. RPM handles over forty percent of the U.S. core return market and approximately fifty percent of the Canadian core return market.