Product takeback and e-waste recycling: A growing business opportunity

This is the first of a four-part series covering the state of sustainable supply-chain management in the IT sector. 

As global economic trends increase natural resource costs, complicate production networks, and concentrate specialized manufacturing in geographic hubs, supply chains are becoming increasingly exposed to the risk of business disruption. As stakeholders continue to raise corporate attention to issues of environmental sustainability and social responsibility, sustainable supply chain management (SSCM) strategies are becoming recognized as an effective way to address stakeholder sustainability concerns while mitigating the risk of business disruption and creating business value.

Debate over the business case for supply chain sustainability is dominated by a variety of diverging perspectives, ranging from “there absolutely is value” to “there absolutely is no value.” Malk Sustainability Partners’ study, Sustainable Supply Chain Management in Information Technology (PDF) investigated this issue as it pertains to the IT sector by interviewing supply chain and sustainability managers at top IT manufacturers and service providers as well as industry experts. The aggregated interview data conveyed, somewhat unsurprisingly, that the business value of a sustainable supply chain strategy depends on companies’ operational focus, position in the value chain, exposure to compliance risk, and business models.

Malk Sustainability Partners (MSP) engaged 29 global information technology (IT) companies and five industry experts to investigate the key drivers, important issues, and popular strategies behind this sector’s adoption of SSCM. Corporate respondents included hardware manufacturers like Hewlett Packard, Dell, Sony, Motorola, and Ericsson; component manufacturers like Intel, ST Microelectronics, SanDisk, Advanced Micro Devices, and Applied Materials; enterprise buyers of electronic equipment like eBay; and other companies like Cisco Systems, IBM, and Oracle.

The results of MSP’s research revealed:

  • Companies’ perspectives of the business value of SSCM strategies vary depending on their operational focus, position in the value chain, and exposure to compliance risk.
  • The four primary drivers of SSCM are stakeholder pressure, regulatory pressure and compliance, risk and cost management, and corporate leadership.
  • SSCM currently focuses more heavily on social issues than environmental ones; with the most prominent social issues pertaining to conflict mineral compliance and fair labor hours.
  • SSCM efforts to engage suppliers vary by degree of depth. Respondents indicated this variation ranges from self-assessment questionnaires (limited depth) and second or third-party audits (intermediate depth) to collaboration through industry coalitions (most in depth).

Next Page: Mitigating risk and enhancing resiliency