Covid Economics: 3 Ways OEMs Can Reduce Margin Erosion
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Preparing for end of life isn’t easy, whether for humans or electronic equipment. The process is exceedingly controversial in the electronics industry and can also be costly too for manufacturers that get snagged by conflicting collection and disposal regulations.
Surprisingly, though, IT equipment asset retirement can also be done quite profitably if well planned. Industry sources acknowledge that some of the greatest challenges electronics manufacturers and their customers face arise not during product development or even during its regular “useful” life cycle but at the terminal phase when productivity begins to decline and replacement becomes absolutely necessary.
But what if there’s still some value left in the product and, even if this is not the case, how should consumers, electronics manufacturers and enterprise equipment distributors dispose of such items without running afoul of the laws or sending them outside the country to places where they become a social and environmental problem?
The solution is quite simple, actually. Leading companies that have instituted best practices in their operations don’t wait until the end before implementing equipment disposal plans. In fact, many actually bake this program into their product development and sales initiatives. Under this scenario, companies design products to make them easier to break down, recycle and develop a take-back arrangement with local vendors, customers and even distributors.
Arrow Electronics Inc. is one of the companies that has found a profitable niche offering such a service to customers. The company has a reverse logistics division that focuses on rounding up IT equipment for OEMs and ensuring the smoothly recycling and extraction of useful parts from such products. That’s only one part of the company’s offering, though. The company goes beyond mere recycling to actually extracting value from the products before they are discarded. In a recent statement announcing an agreement with China’s Lenovo Group, Arrow explains the service offered as follows:
Asset disposition services supported by Arrow include secure logistics; data erasure, destruction processing and recycling according to rigorous standards; and comprehensive tracking and reporting for accounting and compliance purposes. In addition, Arrow evaluates, refurbishes and markets assets to help customers capture the highest possible return. Arrow has developed a global marketplace of diverse buyers to remarket quality refurbished IT assets.
Under the deal with Lenovo, the Englewood, Colo.-based electronics components distributor and value-added reseller would engage public and enterprise IT buyers “at the point of sale” with “IT asset disposition and remarketing services that enable technology users to uncover opportunities for greater efficiencies and value capture at the end of the IT product lifecycle.” Meaning? Buyers can expect not just that Arrow would take the equipment from them once they were done with it but they may also get some money back in the process. Arrow said further:
The asset retirement service is managed through an online portal through which Lenovo customers can request pickups, view available credits, obtain real-time values for assets at any point in the lifecycle, and run a variety of reports on assets that have been or are being processed.
Arrow calls the program “asset retirement service.” I call it profitable retirement. Here are some useful links:
- U.S. eCycling Regulations/Standards
- EU Waste Electrical and Electronic Equipment Regulation
- European Recycling Platform
- Arrow Resolve
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