Posted by: edwinrutten | April 13, 2010

E-waste and Closed Loop Supply Chains: who takes the lead?

Last February, the United Nations Environment Programme (UNEP) released
a
report on E-waste.

Last week, Greenpeace blocked (better: foamed) the main entrance of Dell’s headquarters in Amsterdam. A large banner was lowered from the top of the building asking Mr. Dell to “clean up his toxics”.

Now, let’s have a look what this is all about. In short, Dell is lagging behind when it comes to eliminating toxics from its computers. Companies like HP, Acer en Apple seem to lead the way. The day that Greenpeace knocked at Dell’s door, there was supposed to be an important meeting on the subject of “sustainability”. Unfortunately, the meeting was postponed, since the plans for sustainable computers weren’t ready yet.

To place the need for making electronics like (Dell) computers more sustainable in a macro-perspective, let’s have a glance at some of the highlights from the UNEP-report:

  • Sales of electronic products in countries like China and India and across continents such as Africa and Latin America are set to rise sharply in the next 10 years. This will create a huge pile of e-waste. For example, in South Africa and China the report predicts that by 2020 e-waste from old computers will have jumped by 200 to 400 percent from 2007 levels, and by 500% in India.
  • Global e-waste generation is growing by about 40 million tons a year.
  • Manufacturing mobile phones and personal computers consumes 3 per cent of the gold and silver mined worldwide each year; 13 per cent of the palladium and 15 per cent of cobalt.
  • Modern electronics contain up to 60 different elements – many valuable, some hazardous, and some both.
  • Carbon dioxide emissions from the mining and production of copper and precious and rare metals used in electrical and electronic equipment are estimated at over 23 million tonnes (note:  this is equivalent to the emissions of 4 million cars!).

A lot of the e-waste in countries like China, India and Brasil is improperly handled, much of it incinerated by backyard recyclers to recover valuable metals like gold. The risk of these practices is high, the returns are low.  The challenge of dealing with e-waste represents an important step in the transition to a green economy.

The report outlines smart new technologies and mechanisms which, combined with national and international policies, can transform waste into assets. Waste = food, isn’t it?

Here, I would like to make the link to an article of Guide & Van Wassenhove (2009*) on Closed Loop Supply Chains (CLSC). They approach the concept from a business perspective on waste and focus on capturing value along the life-cycle. From cases like e.g. Dell competitor HP, researchers have learned that smart firms spend money to make money. In general, the volume of returns, the marginal value of time and the quality of returned products are important for CLSC.  In the case of products with a short life cycle, like computers, time is an essential variable. This requires a decentralised and responsive CLSC. Closing the loop requires an integral focus, answering three questions:

– Does anyone want to buy remanufactured products?

– Can value be recovered from returns at a reasonable price?

– Is there sufficient access to used products?

Companies should start with getting things right up-front in the design phase, of the products (DfE, DfR, DfD) but even more so for the design of the forward and reverse supply chain.

Now, was it not Dell that realised an explosive growth in turnover by engineering a smart  business concept and a superb and agile supply chain. Why not start gaining market share again by using these core competences for the reverse supply chain?! Dell: release the hidden value in your supply chain, become king of CLSC, increase shareholder and stakeholder value. And, I would almost forget, this mission will certainly help you and the planet to reduce e-waste and toxics. Wouldn’t this glove fit “purely you, Dell“?

 

* Source: Guide & Van Wassenhove (2009). The Evolution of Closed-Loop Supply Chain Research, Operations Research, Vol. 57, No. 1. 

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Responses

  1. Interesting Blog, looking forward to the follow-up… by the way: some food tastes like waste anyway.

  2. It’s good to know that there are people in this World interested in main environment problems that actually could be solved. If we all worked as a team, things wouldn’t be as bad as they are.

    I would appreciate it if you have any useful information that you can share about Closed-Loop Supply Chain applied on textile industry.

    Thankyou

    • Hi Natalia,
      Thanks for your response. I do have some resources on CLSC, also on textile supply chains, but I’m not sure whether I have info on the combination of both. If I come across such information, I’ll inform you,
      Kind regards,
      Edwin.


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