What if Supply Chain Sustainability is a Data Problem?

Whether based on blockchain or other technologies not yet identified, improved transparency delivered through traceability solutions will allow entire supply chains to work together to achieve sustainability goals vital to the whole planet.

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Supply chain managers generally talk in terms of networks. The language recognizes the interconnections from Tier 1 to Tier N suppliers and the multifaceted impacts on production. The phrasing also points toward a core sustainability challenge. Slashing the environmental footprint of any product requires a coordinated effort across the supply chain ecosystem.

Nowhere is it more important to tackle this challenge than in technology. E-waste has become the world’s fastest-growing waste stream. Humans discarded over 50 million tons of it in 2019 and the weight of our technological castoffs, some of them toxic, could reach 120 million tons by 2050. Sadly, more than 120 countries have an annual GDP lower than the value of this growing mound, meaning we are literally tossing prosperity in the trash.

To stem the growth of e-refuse piles, we can turn to the well-worn environmental slogan -- Reduce. Reuse. Recycle.

Success, however, depends on the ability to break down information silos separating the various stages in this cycle. Fortunately, traceability—transparency stretching from raw materials inputs through the final disposition of a product, hopefully when it is recycled—offers opportunities to improve performance at all three points.

The reduce-recycle loop

There’s no turning back on digital transformation. Today, the internet, software and apps are used on billions of devices communicating over complex telecom networks and supported by a global network of over 7 million equipment-intensive data centers housing approximately 470 exabytes of information and counting.

From a product sustainability standpoint, the question is how to feed this digital revolution while reducing new materials inputs. It’s a feat best achieved by way of recycled e-waste.

Traceability promotes the necessary feedback loop that takes worn-out IT products and results in recycled inputs for manufacturing. For example, traceability certification audits targeting plastics provide companies a way to prove how much recycled content they use. This verifiable information can add teeth to regulatory measures and bring consumer pressure to bear.

Expanding such concepts to the full array of materials in IT hardware will encourage manufacturers to seek out more recycled inputs. Doing so will help companies garner the many advantages of being deemed a sustainable enterprise, such as higher stock price and improved talent recruitment and retention. Traceability will also empower customers, from hyperscale data center operators to small businesses and the average consumer, to demand increasing levels of recycled content in the products they purchase.

Market forces should then accelerate efforts to solve the tricky problems of e-waste recycling, much of which is currently outsourced to the developing world. Ironically, the Coronavirus disease (COVID-19) may have helped in this regard. Supply chain issues have perhaps never before gained the level of public attention they did during the pandemic. The crisis underscored the weak points in a globally interdependent system and led to the reengineering of many local and regional supply chains.

A focus on supply chain resilience could lead businesses and nation-states to attend more closely to the materials available in local waste streams. After all, why depend on China for rare earth metals, for instance, if tons are in our garbage? Why mine gold in South Africa when there is 100 times more of it in a pile of cell phones than in an equivalent amount of ore?

When traceable, locally obtained recycled content could become especially attractive to companies and consumers for sustainability and security reasons.

Reuse is the missing link

As important as it is to leverage recycling to reduce new materials inputs, we should not so readily skip over the “reuse” pillar. Ensuring that hardware can deliver value to more than one customer before being recycled expands product lifespans and further advances sustainability.

This is where the Green Market for repaired and refurbished IT equipment comes in. Turning to refurbished equipment means reusing much of the original device and thereby stretching the water use, emission and raw materials entailed in its manufacturing over a longer lifecycle.

Studies show that refurbished equipment delivers nearly the same performance as new hardware, at a price about 40% less. Unfortunately, Green Market hardware still suffers from a lack of customer confidence in some quarters.

Digital authentication of IT equipment and components can rapidly increase adoption of refurbished gear, even in mission-critical environments. In this context, traceability of data center hardware is essentially equivalent to a CarFax, providing a detailed history of the product so customers know they’re not buying “a lemon.” Traceability helps root out counterfeits and the less reputable resellers relying on sub-part replacement parts in their refurbishment processes.

Expanding the Green Market has additional benefit as well. The companies involved in IT product refurbishment are also well positioned to link the “reuse” phase of the product lifecycle to the “recycle” one.

Telecom companies, data center operators and other businesses can, and indeed should, direct most of their discarded IT equipment to specialist Green Market resellers. These companies have the expertise to determine which products retain sufficient value for repair, refurbishment and resale and handle the entire process, including data security. They also harvest and reuse components, such as functioning hard drives, from unrepairable equipment. The remainder is then responsibly recycled.

Significant traceability is already incorporated. Green Market companies will generally track the provenance of the equipment they refurbish, provide information about components used in repairs and upgrades and certify and warranty the hardware put up for resale. They also provide documentation of R2-compliant recycling back to the original product owner and can help quantify positive environmental impacts.

As full-lifecycle traceability reaches the Green Market, additional benefits will accrue. OEMs, for example, could trace their products through the end of life to identify which materials are most likely to wind up in the e-waste stream because of recycling difficulties. This information can then drive design changes to increase sustainability.

A proven solution

The combination of certified product resale, component harvesting and end-of-life recycling works because it’s in use for large industrial machinery and automobiles. It’s also more common among large technology-centric enterprises, such as hyperscale data centers, that rely on expensive and durable IT hardware.

Enhanced traceability promises to expand the circular economy—or rather shrink it to encompass the ever-smaller components of our digital ecosystems from network switches to mobile devices and their tiny components. Whether based on blockchain or other technologies not yet identified, improved transparency delivered through traceability solutions will allow entire supply chains to work together to achieve sustainability goals vital to the whole planet.