Some of the world's largest multinational businesses have recognized the advantages 'closing the loop' on their supply chains can provide. From energy and water conservation to materials reuse and recycling, they're achieving significant gains in operating efficiency and productivity as they move toward becoming 'zero-waste' and 'zero emissions' businesses.
Mimicking natural ecosystems, commercial and industrial ecosystems are emerging -- in which an increasing percentage of products, their components, and raw or intermediate materials are being reused or recycled. The ultimate goal -- cradle-to-cradle product lifecycles in which all materials used to produce, package and distribute products to consumers are recaptured, reused or recycled -- is edging closer to reality.
At the leading edge of this movement is a small group of companies operating in what has come to be known as reverse supply chain management. Aiming to close the loop on the supply chain, they're advancing green economy initiatives by offering original equipment manufacturers (OEMs) across a growing range of industries an integrated 'one-stop shop' for re-manufacturing, as well as reusing and recycling products, their constituent parts and raw materials.
By enabling them to move beyond conventional concepts of reuse and recycling, reverse supply chain manufacturers can help companies capture that value, comply with environmental regulations, and enhance the legitimacy and credibility of their sustainability strategies.
Offering post-consumer takeback and recycling, enterprise IT and telecom asset management, and 3R solutions for mobile devices, Hong Kong-based Li Tong Group owns and operates 15 reverse supply chain facilities worldwide. From an OEM customer base in the consumer electronics sector, Li Tong is intent on expanding its reverse supply chain business across other industry sectors, Linda Li, a Li Tong executive director and corporate VP for strategy, told 3p in an interview.
Li Tong is providing reverse supply chain services to some of Silicon Valley and the tech industry's biggest companies. It's now expanding across the telecommunications sector, where network equipment and device manufacturers, as well as cloud service providers, are looking to 'green' their businesses.
“When I talk about reverse supply chain management, I talk about all that can be done after a product is in a consumer's hands,” Li explained. That includes taking back "defective products, returns, fulfilling warranty agreements, repairs, refurbishing, disposal, reuse and recycling." Now part and parcel of a growing number of CE OEM's operations, “consumer take-back schemes are just one aspect of this.”
Those buffer amounts ripple across the supply chain. “Everyone builds in a buffer – no one wants to run short – we call it the 'bullwhip effect,'” Li elaborated.
The bullwhip effect is particularly strong in the CE industry, where short product life cycles are the norm. “For every 100 million smartphones shipped, 3 to 5 million will be set for the scrap heap,” Li told 3p.
“New CE product lines and models may be introduced every six months. That makes massive waste a reality of the high-tech industry. What happens to all this material has a huge environmental impact, as well as lots in the way of lost economic value.”
The people it employs are the key element of its ability to deliver on these promises. Capturing the value from waste CE and high-tech products requires a lot of specialized knowledge, as well as processes and other resources, Li pointed out. "Our engineers all come from an electronics manufacturing background...When it's 'first life' is finished, we can take CE and other high-tech products apart and harvest their components and parts – from an LCD, a Wi-Fi module, a memory storage device, a CPU,” she elaborated.
“There's no reason they need to be decomposed to fragrments. Whole parts or components can be reused – the LCD in a mobile phone or tablet, for example, might be reused to make a GPS handset or smart home appliance.”
“Think of the carbon footprint, the environmental impacts, then the economic value that can be recovered,” Li said. “That's the solution we are offering all our OEM customers – reuse, re-manufacture and recovery are the three 'R's' upon which our business is built.”
*Image credits: 1), 3) Li Tong Group; 2) Reverse Logistics Association
An experienced, independent journalist, editor and researcher, Andrew has crisscrossed the globe while reporting on sustainability, corporate social responsibility, social and environmental entrepreneurship, renewable energy, energy efficiency and clean technology. He studied geology at CU, Boulder, has an MBA in finance from Pace University, and completed a certificate program in international governance for biodiversity at UN University in Japan.