Reverse Supply Chain

Monday, June 8th, 2015

Companies now spend an average of 8% to 10% of revenue maintaining reverse supply-chain functions — handling goods once they’re discarded:

LTG is hired by contract manufacturers and vendors of electronics and equipment to collect some 200,000 metric tons of e-waste a year to be destroyed — sometimes under careful watch of intellectual property owners — harvested for components, or broken down into raw materials for recycling.

It’s a complicated science. Some products need to be drilled full of holes before they’re discarded. Others are pulverized and sent to smelters so that valuable metals can be recovered. And different and changing regulations in various countries complicates the process, said Mark Majeske, head of Arrow Electronics Inc.’s global reverse logistics business.

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Because equipment vendors no longer sell parts for equipment that is no longer in production, these parts can command higher prices than newer network components, providing a source of revenue for companies like LTG. The company also makes money from processing excess and obsolete parts that were produced by companies as a guard against shortages in the supply chain.

The afterlife of the components of increasingly complex consumer gadgets is rarely considered in design, the experts say, leaving supply chain and disposal experts to figure it out later.

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Plastics are an extra complication. The plastic parts of cellphones today are often blended with carbon fiber or class fiber to make the devices lighter. Such materials can’t be broken down without information about the original compound, said Ms. Li, and so many such parts end up in landfills.

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