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Closing the Loop: UPS’s E-Waste Disposal Supply Chain

| Tuesday June 16th, 2009 | 3 Comments

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The ever-growing amount of e-waste generated by our increasingly computer-driven, network-connected societies poses significant economic and product design challenges, as well as environmental and health problems, in countries the world over.
The US Environmental Protection Agency reported that electronics, or e-waste, is among the fastest growing components of municipal solid waste streams, accounting for around 2% of them at present. Some 157 million computer products and 126 million cell phones were discarded in the US in 2007, according to the EPA.
Since 2000, air freight and logistics industry giant UPS has been tackling the issue by closing the “production-consumption-disposal” loop and building an e-waste disposal supply chain. More than 25 million pounds of e-waste have been processed since the program’s start, with the annual average falling between 2 million and 3 million pounds, Robert Gamer, UPS’s e-waste coordinator, told Triple Pundit.
*Photo courtesy UPS


Building an e-Waste Disposal Supply Chain
Clearly a conventional business model based on selling ever greater volumes of increasingly disposable electronic devices, chock full of potentially toxic heavy metals and plastics without consideration of how e-waste is disposed of, is in direct opposition to and the principal contributor to the e-waste problem.
“UPS recognized that e-waste was an emerging environmental issue that needed to be addressed by large companies that possess significant IT assets,” Gamer said. “The trick was how to do it in the most cost-effective manner. That’s why UPS learned about the environmental issues associated with e-waste and began to reconsider how it could be both responsible and cost effective.”
Marshalling the human and organizational resources to design and put into effect an e-waste disposal supply chain was the first step in UPS’s effort. In 2000, staff from the company’s information services and corporate legal teams were brought together to find a solution.
Decentralizing e-waste collection was the first organizational change the e-waste disposal supply chain team made. Rather than transporting all e-waste to UPS’s hub in Louisville, Kentucky, only used equipment that was still supported and needed repair is now shipped there. All unsupported equipment now flows to regional warehouses for disposal via vetted, local and regional e-waste recycling and disposal businesses.
Another key element of the e-waste disposal supply chain is a custom-built Web application that UPS employees use to determine what to do with a particular piece of e-waste equipment. The application informs employees where to ship the item and automatically prints out a shipping label for UPS ground transport to the nearest consolidation site.
Costs & Benefits
Like many social and environmental responsibility initiatives corporations are undertaking these days, UPS is exploring uncharted territory. Such initiatives benefit with experience while contributing to the development of the e-waste recycling industry sector and infusing a “reuse and recycle” mentality into the organization.
Solely in economic terms, the e-waste disposal supply chain is a “break-even” to “modest cost” initiative, according to Gamer, as the cost value of e-waste fluctuates with the recycling market.
UPS works with major e-waste vendors that have regional capabilities and verifiable track records. E-waste recycling is a capital intensive business, Gamer pointed out. “Larger vendors typically have well defined and “auditable” or audited processes in place.
With much e-waste being transported to poor countries with little or nothing in the way of environmental safeguards, UPS is “very strict about selecting our vendors and they must document the end disposition of our goods. Mishandling would be a violation of the terms of our contract and would end our relationship,” Gamer explained.
Managing e-waste in a responsible manner is a business necessity today, he continued. “To do otherwise is risking your company’s reputation and compliance with the law.”
“At UPS, we do our best to make the right decisions about how to conduct our business in balance with economics, the environment and our communities. Why can UPS do this well? Because logistics and transportation can be one of the major expenses in managing end-of-life products and equipment, and transport and logistics happens to be our expertise.”


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