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Connecting Reverse Logistics, Recycling, Sustainability

Just recently, IDC's David Daoud released a report on the staggering weight of PCs and related devices and accessories recycled in the United States in 2010. (For Earth Day, IDC has posted a free version of this document with registration.) The total weight amounted to about 8 lb per capita or a total weight of 2.5 billion pounds in 2010 (2,506,659,212lb). We're talking about PCs (about 44% of the total), PC displays (27%), multifunction peripherals (about 15%), and the remainder primarily from mobile phone devices, x86 servers, digital cameras, nonenterprise storage, keyboards, mice, and cables.

I take this as a very good sign. David commented in his research that the electronics recycling industry in the United States is beginning to make progress, but challenges remain. The electronics recycling sector is highly fragmented market and lacks sufficient oversight. (Learn more about how IDC is working to improve the process and see the attached figure).

Not surprisingly, one of the biggest challenges centers on the slow rate of change of current recycling practices, though enterprises are definitely improving faster than home consumers and small businesses. With our expectations at IDC that the recycling industry is likely to grow in importance and scope both as an economic activity and as a guarantor of proper environmental stewardship, it's worth thinking about this from a supply chain perspective:

What are the environmental and financial costs of recycling specifically and reverse logistics more generally in the electronics industry?

My first reaction upon reading David's research was - that's a lot of weight to carry around. If the industry is so fragmented, odds are it's not being done efficiently. We already know it's not always processed in compliance (Think WEEE in Europe and similar legislation in the U.S.). And while recycling is good for the environment, we have to think about the environmental costs of the entire process, especially in the supply chain from a transportation and logistics perspective if those goods add up to a serious amount of freight. There are a few more factors to consider:

  • The amount of electronics items recycled will increase over time
  • The size and weight of those goods will probably decrease over time
  • The increasing clockspeed of the high tech industry means that product lifecycles are compressing over time
  • The range of items that include embedded electronics is increasing

Basically, the decreasing size of most existing electronics is not enough to offset the growth of items that will need to be recycled and enter the reverse logistics stream.

As a result, the electronics recycling industry is not the only segment facing the challenges of increasing their recycling and improving the efficiency and compliance of their reverse logistics processes. We expect these factors are going to impact how companies use 3PLs (Third party logistics providers), like FedEx and UPS.

In fact, both FedEx and UPS provide reverse logistics services today. While I'm sure that both companies would point to customer service advantages that result from using their services, I think it's also important to consider the compliance, sustainability, and general efficiency benefits.

How is your company managing recycling and reverse logistics? I'd like to hear what you're doing today and what you expect to do next.

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