Reverse Logistics, Green Supply Chain

As consumer electronics trade-in programs gain steam, the reverse supply chain is gearing up to responsibly divert the rising stream of e-waste


The next part takes place behind the scenes. The backbone of any buyback program is an experienced returns management and repair partner with the means to implement global value chain strategies. Companies like Flipswap rely on solution providers, such as my company, ModusLink, to implement the reverse logistics process. They depend on a strong retail services platform, post-sale service optimization and a transparent green supply chain to fulfill their mission.

Once acquired through online or in-store channels, the phones are turned over to the partner to be inspected, cataloged and triaged. On average, 95 percent of the phones received at the processing facility are deemed usable. Those that are too old or otherwise nonoperational go directly to a certified recycling partner for proper disposal.

During inspection, the devices are checked to make sure all buttons, the keyboard and the LCD display are in working order and there is no water damage. All working components are harvested to ensure as little waste as possible. If the unit passes muster, it goes on to the next, and perhaps most critical, step – the automated data wipe. In some cases, if devices are not certified with the automated system, there is a manual data wipe.

The refurbished phones are then shipped to international wholesalers, who distribute them in secondary markets for further use.

Meanwhile, individuals waiting on their electronic refunds can contact a customer service center and get real-time access to the status of their payment.

Buyback experts assert that all these steps are best managed by one partner, a company that helps them create efficiencies and customer satisfaction. Integration assures there is added value at each level, from data management and streamlined product workflows to compliance reporting and a network of “green-approved” partners.

Market Implications

What does all this mean for the consumer electronics market? For retailers, it’s all about increased foot traffic, loyalty and a new source of revenue. There are no limits to the promotional creativity. Retailers can offer bonus cash as incentive to customers who turn in Brand A and use the credit to purchase Brand B. Retailers and manufacturers can work together to design a uniquely beneficial program, giving the manufacturer more control in the retail environment. Brands with their own retail outlets, such as Apple, are able to adjust their own retail infrastructure to promote conversion from an older model.

For customers, it’s about cold hard cash, so hard to come by in today’s economy. The transaction makes them feel good about disposing of their older unit responsibly, and enhances the value of their relationship with the manufacturer and retailer.

It’s also an effort for manufacturers and retailers to be proactive on the environment and even stay ahead of new recycling laws. Americans’ endless addiction to the latest gadget has left in its wake a trail of discarded units, often stashed in the consumers’ desk drawers – or worse, in landfills. It is more than wasteful, it is also inefficient. The New York Times reports that each phone contains about a dollar’s worth of gold and other precious metals. If that amount seems negligible to you, try multiplying it by several billion.

The Environmental Protection Agency estimates that in 2007 the U.S. generated more than 3 million tons of e-waste, and only 13.6 percent of that was collected for recycling. The other 86.4 percent went to landfills and incinerators. Since 2008, Flipswap alone has diverted more than 210 tons of e-waste from landfills in the U.S. by properly recycling and refurbishing devices to resell in secondary markets.

Now, new and tougher laws are coming online in U.S. states. Twenty-four states have passed legislation mandating statewide e-waste recycling, and several more are considering bills for 2011. According to the Electronics TakeBack Coalition, a watchdog group, 65 percent of Americans are now covered by a state e-waste recycling law. Specific requirements vary from state to state, but the message is clear: the entire supply chain must accept some responsibility in the recycling process.

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