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

A significant majority, nearly 70 percent, of respondents indicated company-wide supply chain sustainability policies add value by mitigating risk and enhancing supply chain resiliency. Still, a meaningful minority of participants indicated otherwise and, in some cases, remains skeptical about the true value of these initiatives. For some, SSCM initiatives seem like obligatory investments needed to "check the box" of customer compliance. Careful review of the interview anecdotes was necessary to determine which circumstances make the value of an SSCM strategy outweigh the associated costs.

One topic that yielded particularly interesting anecdotes pertained to e-waste regulation. Governed at the state level in the U.S., the regulatory framework mandating e-waste recycling has evolved into a regulatory patchwork. Currently, more than 25 states have regulations that mandate consumer-electronics brands to recycle e-waste. States’ recycling quotas are typically determined by a weighted average of brands’ market shares. As these quotas differ by state and brand market share per state changes over time, the compliance challenge posed by this regulatory patchwork is significant. Many interview respondents cited difficulties in coordinating their companies’ programs to meet this challenge.

Other respondents leveraged such regulations to their advantage. Cisco, one of our survey respondents, discussed its e-waste management program and how they were able to lower input costs for their products. Cisco’s innovative waste management efforts led to the company sending less than one percent of its collected solid waste to landfills; with the remaining portion of collected e-waste being reused, recycled, or refurbished! Through this expanded scope, Cisco reaps benefits from minimized input costs due to increased resource efficiency and enhanced control over the security of clients’ information.

Value-added distributors’ expansion into the electronics hardware space reveals e-waste recycling can be profitable if scaled. Brightstar, the world’s largest specialized wireless distributor and a leading global services company that serves mobile device manufacturers, wireless operators, and retailers, has committed to creating a global handset take-back program and reverse supply chain. At the 2012 World Economic Forum - East Asia, Brightstar CEO Marcelo Claure explained post-consumer used phones are sold in the U.S. at heavily discounted prices. This environment has enabled Brightstar to purchase large quantities of used phones and refurbish them for resale in developing nations. Brightstar currently sells 25 to 30 million like-new phones per year.

Consumer electronics brands have already recognized the potential value from a Brightstar partnership. Brightstar’s customer base includes retailers, such as Wal-Mart, Best Buy, and Verizon, as well as the largest electronics brands, like Apple, Samsung, Motorola, Dell, and LG. As Brightstar’s efforts garner more attention and the regulatory patchwork mandating e-waste recycling proliferates across U.S. states, it is likely companies will continue to turn to Brightstar and its peers to solve their sustainability compliance risk.

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