How recycling programs are evolving from cost reduction to environmental benefits

 

tv landfill

ModusLink PTS Aftermarket recycle components from TV sets to refurbish others

Mark Solomon from DC Velocity reports on ModusLink PTS Aftermarket; an organisation that recovers components from damaged television sets and uses them to refurbish other sets.

 

I’m not sure that I agree with Mark when he says companies have “formulated their recycling strategies with more thought to cost than to environmental impact”.  In my experience (within the technology industry), recycling has been seen as a significant expense.  IT companies have tended to view recycling as either something that is required by law, or as something to market as being a “good corporate citizen”.

However, Mark makes good points and his article is enlightening.

For the first time, companies are getting serious about the environmental implications of their recycling efforts—and with good reason. The right program can yield greater efficiencies, improved profitability, and the goodwill that comes with being seen as a good corporate citizen. The wrong approach can lead to higher costs, reduced productivity, increased legal exposure, and a tarnished image that takes years to overcome.

Organisations with honest and effective recycling programs are now being seen as leaders and are reaping the benefits from responsive customers.

By moving reusable parts into the recycling process at the proper time, companies can reclaim base metals and other components that can then be used for repair and refurbishment. This saves on the cost of buying new parts and is also good environmental practice, experts say. “Overall lower inventories decrease the impact of warehouse energy use and emissions, and bring back some value through reclamation of usable materials,” consultants Kevin Steele and Emily Rodriguez wrote in an article that appeared in Reverse Logistics magazine in the summer of 2008.

One of the concerns that manufacturers have with refurbishing equipment is that it erodes sales of their new products.  I will be interested to see how organisations combat this in coming years.  In particular, it may well be possible for companies to make more margin from the sales of refurbished equipment, than from new.  Additionally, refurbished equipment may be shipped off to developing companies where customers are more willing to accept “slightly soiled” product.  If that allows a lower price point, the manufacturer may penetrate the market whilst maintaining a strong mix of new product in developed markets… and give their green credentials a boost.

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