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The Supply Chain Must Embrace Recycling

The supply chain must develop a competitive strategy to cope with recycling the electronic devices we use at work and at home, which — as we all know — are loaded with toxic material.

These toxins contribute to the contamination of the environment and affect our health. The implications of recycling have global consequences and must be taken seriously.

The already short lifecycle of devices has been reduced even more as electronics manufacturers release more frequent product updates to the market. Government regulations have been passed worldwide requiring manufacturers to provide environmentally sound end-of-life (EOL) solutions. Here's a sampling:

  • In the EU, electronics manufacturers must take their used products back from customers (Waste Electrical and Electronic Equipment, 2006);
  • In the US, California has passed several laws that place responsibility on manufacturers, retailers, and consumers for the recycling and disposal of electronics products;
  • The US Electronic Waste Recycling Act of 2003 prohibits the sale of a covered electronics device if its sale is also prohibited in the EU countries under Directive 2002/95/EC (RoHS Directive, 2005); and
  • Japan has passed legislation for mandatory EOL take-back of products, including washers and dryers, television monitors, videocassette recorders, and refrigerators.

The European Commission Environment Directorate-General commissioned the Umweltbundesamt, the Environment Agency in Austria, the List of Restricted Substances under RoHS 2. The Umweltbundesamt provides downloadable documents for thelist of restricted substances under RoHS 2 Directive.

Is recycling a choice?
According to this research paper from the Kelley School of Business at Indiana University, supply chains should consider the implications of the four generic recycling options before deciding which one is more convenient for their particular case, or if a combination of them could be applied. Here's a sample from the abstract:

Until recently, end-of-life product management was the purview of a small number of firms that could make money out of recycling and/or remanufacturing. Now, changing customer expectations and stringent product take-back regulations are forcing many goods producing organizations to confront EOL product management, even in cases in which there is no clear economic incentive for doing so. This article presents a framework that highlights the supply chain implications for firms forced into EOL product management where recycling is the only viable option. Discussed are the various recycling options available to managers, as well as the strategic implications of each of these choices.

The paper identifies a number of options for recycling electronics, including:

  • Outsourcing recycling without disassembly (low-cost option);
  • Outsourcing recycling with disassembly (a middle way strategy);
  • In-house recycling without disassembly (controlling materials and creating markets); and
  • In-house recycling with disassembly (creating unique value through closed-loops).

It's quite an interesting read. It examines how supply chains are being forced into the first systematic discussion of a topic that involves everyone, not only the electronics industry.

35 comments on “The Supply Chain Must Embrace Recycling

  1. Tom Murphy
    May 30, 2013

    Thanks Susan for saying what needs to be said.  Really, folks, do you want your kids playing in toxic waste…or anybody's else's kids.  Let's find a way to make a profit by being a bit greener.  We can and should do this.

  2. Hailey Lynne McKeefry
    May 30, 2013

    Excellent points…and i'm all for recycling.  The margins, particuarly on electronic products are slim so the green debate gets a little dicey. I worked for a projector manufacturer adn while i was there (this was a year or so ago) we had a lot of meetings about starting a recycling program. The complexity of it was pretty astonishing. On the bright side, there are vendors to partner with. I do think that if customers demand it and really treat it as a defining advantage (like “I want this and i won't use a vendor who doesn't do this”) will make a difference. it's hard to get the organziatoin away from teh bottom line so we have to use it either as the carrot or the stick.

  3. prabhakar_deosthali
    May 31, 2013

    Recycling is such a good concept !

    In the third world countries , my guess is that about 10% population makes their living on recycling – may be it is just the old newspaper, the rags, the old clothes, the discarded furniture, vehicles, utensils and what not.

    To remove the toxic exposure that these recyclers are unknowingly exposed to while earning their daily bread, it is necessary that the responsibility of recycling of the waste products is shifted to the product manufacturers.

    More and more countries should pass legislation to make old product take back and recycling it properly,  mandatory for the manufacturers.

    For the third world countries it could be another outsourcied business opportunity!

  4. Taimoor Zubar
    May 31, 2013

    it's hard to get the organziatoin away from teh bottom line so we have to use it either as the carrot or the stick.”

    @Hailey: The way corporations are structured where the entire focus is on maximizing the wealth of the shareholders, any method other than carrot and stick cannot work. Companies need an incentive to do anything even for CSR projects. The only way you can tame these wild beasts is by proper incentives.

  5. Himanshugupta
    May 31, 2013

    @Prabhakar, i think so too that recycling is a good option. But once we think of electronic waste then there can be harmful and toxic waste that third world countries are not capable of dealing with right now. So, if companies are really concerned about their electronic waste then they should begin with making product more environment friendly to start with.

    Supply chain is a big headache once it involves recycling the product so i guess most companies keep themselves away from this. But this can turn out a great opportunity once company put some money in RnD to find out way to efficiently extract precious metals from the electronic waste.

  6. hash.era
    May 31, 2013

    Why recycling needed ? I think its just a matter of having stuff loaded unnecessarily    

  7. Mr. Roques
    May 31, 2013

    There should be an inverse recycling supply chain. After the equipment is thrown to the garbage, a company collects them and starts selling each part to interested companies. Is it how it's done? 

  8. _hm
    June 2, 2013

    It is a nice concept for supply chain to embrace recycling. However, this should be sincere effort on their part. It should not happen that they collect all waste and dump in to third world countries. EU and other organization must enforce strict rules for this.

    Can e-waste be returned back to country of origin? This will give them enhance duty of pricing product fairly.

  9. Lavender
    June 2, 2013

    Whether for material and resources saving or evironment protection, recycling is a thing must be done. Image, if there is no recycling, the high-speed technology development would make our earth a garbage place, but not a comfortable living place. 

    In addition, with consumer increasingly paying more attention to environmental protection, recycling of one product will become a attractive selling point in the future. 

  10. Susan Fourtané
    June 3, 2013

    Thanks, Tom. 

    eWaste is one big monster that is occupying a good part of the planet already. If we don't take immediate action to stop it from expanding even more, the toxic giant will become untameable. 

    -Susan

  11. Susan Fourtané
    June 3, 2013

    Hailey, 

    Recycling affects everyone. Therefore, everyone should be involved in the project, both companies and individuals. Not recycling, or keeping pilles of eWaste in one's home or office doesn't help anyone. 

    Did the projector manufacturer started the recycling program after all, or did they forget everything about it because it was too complex? 

    -Susan 

  12. Susan Fourtané
    June 3, 2013

    Taimoor, 

    “Companies need an incentive to do anything even for CSR projects. The only way you can tame these wild beasts is by proper incentives.”  

    Don't you think that helping to less pollute the environment should be enough incentive for those companies? 

    -Susan

  13. Susan Fourtané
    June 3, 2013

    Prabhakar, 

    I am glad you have mentioned responsible recycling, and that product manufacturers should take more responsibility in the process.

    There should be more attention paid to the careful choice of materials used in the supply chain that will end up in the devices. Later on taking the products back at the end of their life for proper recycling should be done smoothly, facilitating the process in all possible ways. 

    “For the third world countries it could be another outsourcied business opportunity!”

    How do you envision this? 

    -Susan

  14. Susan Fourtané
    June 3, 2013

    hash.era 

    How many dead or old devices do you have in your drawers, or in a box? 

    -Susan

  15. prabhakar_deosthali
    June 3, 2013

    Susan,

    The recycling of the waste products has been the forte of a major population in the world countries.

    With new regulations by which the big manufacturers are compelled to take back their old products, they can outsource the recycling of these product to the third world countries.

    As an example of the expertise possessed, I will give an example of a port on the western coast of India – named Alang. It is the world's biggest ship breaking port and almost all the world's out-of service old ships are sent here for ship breaking and salvaging all that is possible. This facility alone has provided jobs to thousands of workers in India.

    For such specialized recycling services with lower cost  which are labor intensive , what better place than the third world countries where cheap labor is available?

  16. Susan Fourtané
    June 3, 2013

    Prabhakar, 

    It sounds good, in theory. Now, there is also the risk that the eWaste could be sent to the wrong places, and this can pollute the land and health of the people who would be in contact with toxic materials.

    And this has happened in some third world countries. That's why shipping eWaste there has to be done responsibly and carefully. 

    I am now investigating about this chapter of recycling, precisely. Soon we can discuss more deeply about where eWaste goes. 

    “As an example of the expertise possessed, I will give an example of a port on the western coast of India – named Alang. It is the world's biggest ship breaking port and almost all the world's out-of service old ships are sent here for ship breaking and salvaging all that is possible. This facility alone has provided jobs to thousands of workers in India.”

    Thanks for sharing this about Alang. I didn't know that the old ships are sent there. Many of those ships were probably built in Finland. 

    -Susan 

  17. Susan Fourtané
    June 3, 2013

    Himanshu, 

    You have some excellent points here:

    “. . . electronic waste then there can be harmful and toxic waste that third world countries are not capable of dealing with right now.”  

    Yes, that's why it's so important to learn about where the eWaste is going after we think we have done our part. 

    “So, if companies are really concerned about their electronic waste then they should begin with making product more environment friendly to start with.”

    Precisely! This should be the starting point. Some companies, like Nokia, make environmentally friendly products. This helps enourmously at the time of recycling. 

    “this can turn out a great opportunity once company put some money in RnD to find out way to efficiently extract precious metals from the electronic waste.”  

    Nokia does this, but every company should do it. 

    Look:  http://www.youtube.com/watch?feature=player_embedded&v=o8rR6fCjfQ4 

    -Susan


  18. Susan Fourtané
    June 3, 2013

    Rich, 

    Another option is to give your old devices to a school, or someone who might need it, instead of just throwing them out.

    -Susan

  19. Susan Fourtané
    June 3, 2013

    Well, Rich, we can all embrace the planet. 

    -Susan

  20. Susan Fourtané
    June 3, 2013

    Mr.R., 

    If you throw the devices to the garbish expecting that some responsible soul is going to pick it up, and do a responsible recycling you might be wrong. You always have to make sure where you take your devices for recycling. 

    -Susan

  21. Daniel
    June 3, 2013

    Susan, some of the vendors are following a similar policy, they used to collect the damaged or outdated products from companies at a cheaper price and recycled it.  it will be beneficial for both companies and vendors. Companies can dispose the unwanted items and vendor is doing the recycling for a profitable business.

  22. Ariella
    June 3, 2013

     

    @Jacob glad to hear that people are doing that. I'm all for recycling, and find that too often people pay lip service to the concept without actually doing much for it on a practical level.  

  23. Hailey Lynne McKeefry
    June 4, 2013

    @TimoorZ, very true… When we find ways to make being good corporate citizens good business as well, we've unlocked the puzzle, for sure. Of course, it can also work when recycling and other good for the world practices become a compliance issue. Often, what starts as something that organizations are forced to do for this type of reason becomes something that becomes part of the corporate culture.

  24. Hailey Lynne McKeefry
    June 4, 2013

    @Susan, in the end, the company did create an “EcoTrade program”. They decided to allow customers to turn in their legacy projector when they bought one of the LED-based projectors (an eco friendly choice because the LED lamp does not contain the chemicals of a traditional lamp). They decided to accept products from any manufacturer and then worked with a third party supplier with experience in recycling products and safely desposing with them.

     

  25. Daniel
    June 5, 2013

    “glad to hear that people are doing that. I'm all for recycling, and find that too often people pay lip service to the concept without actually doing much for it on a practical level. “

    Ariella, only some of the vendors have such policies. They will collect the old and unused/unwanted stuffs for recycling.

  26. Susan Fourtané
    June 6, 2013

    Jacob, 

    Initially it sounds good. It's all good if those vendors are doing a proper and ethical recycling, and not just a side business. 

    -Susan

  27. Susan Fourtané
    June 6, 2013

    Hailey, 

    Well, then it was a story with a happy ending. 🙂 

    -Susan 

  28. Taimoor Zubar
    June 8, 2013

    @hash.era: I don't think the world can really survive for long if recycling isn't taken seriously. Given the plethora of new gadgets and devices coming out on a daily basis, all the stuff that goes into them can't just be dumped. Companies need to think about how the stuff can be recycled when they're in the design phase of their product.

  29. Taimoor Zubar
    June 8, 2013

    Don't you think that helping to less pollute the environment should be enough incentive for those companies? “

    @Susan: That's a very ideal scenario even in an ideal world. All companies are concerned is profits and wealth maximization and environmental conerns only come into play if it is contributing towards increasing the profit in some way. If the environment gets better, it's better for everyone no matter if they did anything to improve it or not.

  30. Taimoor Zubar
    June 8, 2013

    Often, what starts as something that organizations are forced to do for this type of reason becomes something that becomes part of the corporate culture.”

    @Hailey: I think it does become part of the corporate culture when the top management is convinced that it's adding value to the organization. It could be either giving them a favorable image in the minds of consumers or governments or a push to their stock price – but an incentive is always there.

  31. hash.era
    June 10, 2013

    @Taimoor: Maybe and that may be an encouraging sign for many      

  32. Hailey Lynne McKeefry
    June 10, 2013

    @TaimoorZ, the incentive certainly DOES have to be there… That's how human beings are wired. People rarely do something without some sort of reward, even if that reward is feeling good.

  33. Daniel
    June 11, 2013

    “Initially it sounds good. It's all good if those vendors are doing a proper and ethical recycling, and not just a side business. “

    Susan, from customer point of view, everything is just like a black box. They are collecting the items for recycling. But thereafter no info about its whereabouts and other details.

  34. Daniel
    June 11, 2013

    Hailey, for recycling process tese vendors are collecting old stuff in a throw away price, ten also companies/warehousing peoples are getting advantage of clearing space for accumulating new stuffs. Space constrain is the main motivation for selling these items in a through away price.

  35. hash.era
    June 30, 2013

    @Lily: Yes I think recycling is happening very well when you compare it with the past. Its good sign. 

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