ATCLE Reverse Logistics & Asset Managment White Paper

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Going green has advantages far beyond reducing environmental impact. It can translate to reduced operational expense, and a vastly improved corporate image that makes a real difference to consumers. But, environmentally sustainable practices require significant resources that can leave some companies behind. Third-party logistics providers are uniquely positioned to help service providers and manufacturers jump-start their green operations, without the overhead expense. In its latest white paper, the experts at ATCLE detail how advanced reverse logistics and asset management processes can virtually eliminate waste without major investments, or lengthy start-up time, to help a company “go green” in no time.
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  Green LoGistics: sustainabLe 3PL Practices for reverse LoGisticsand asset ManaGeMent  www . atcle . com white paper 13500 Independence Parkway ã Fort Worth, TX 76177 Asset Recovery  page 1ATC Logistics & Electronics, Inc. Now more than ever, electronic manuacturers are ina unique position to generate revenue and improvecorporate reputation as a “green” company. Withsocial, legal and marketplace ramications, operatingin an environmentally sound manner is no passingad. While there is tremendous popularity in thismovement, there remains a host o slow adopters.As a result, legitimate market share can still be gainedor progressive-minded manuacturers.Because the reduction o electronic waste (e-waste)is now a priority or consumers and lawmakers,opportunities and pitalls have been created ormanuacturers. According to the U.S. EnvironmentalProtection Agency, in 2007, o the 2.25 million tonso consumer e-waste, such as cell phones, televisions,computers and accessories, only 414,000 tons,or 18 percent, were collected or recycling. Theremaining 82 percent, 1.84 million tons, were mainlydisposed o in landlls.This has prompted a myriad o rules and regulationsto limit these staggering numbers. While there isno ederal legislation in the U.S. mandating recyclingo e- waste, many states and municipalities haveissued extensive regulations to stem the tide on alocal level. Further, it is a sae assumption that it isonly a matter time beore Congress enacts its ownstandards that will result in even more extensiveoversight and mandates.In contrast, the European Union (EU) has been moreaggressive to control e-waste and promises to doeven more. In December 2008, the entity proposedrevisions to its directives on electrical and electronicequipment to address the growing stream o wasteby establishing expanded collection targets.The creation and enorcement o these standardsare a refection o the general public’s sentiment,which seeks to preserve the environment or uturegenerations. As an extension, they are also demandingthat the companies they do business with have acommitment to reducing negative impact on theenvironment.The popularity o electronic devices is increasing atan accelerated pace, with the advent o Smartphones,PDAs and GPS units. As a result, electronicsmanuacturers are now obligated to ace the realityo more waste, along with a public mindset thatdemands environmental responsibility. Organizationsthat enact policies and procedures proactively willbe better positioned to respond to new laws andenjoy the goodwill o the public by being recognizedas environmental stewards. Green Logistics: Sustainable 3PL Practices for Reverse Logistics and Asset Management a Wh Pp y atc Lg & el Introduction  page 2ATC Logistics & Electronics, Inc. Electronics manuacturers are xated on R&D, customerretention and expanding market share. As such,many do not wish to invest the time or internal resourcesnecessary to manage the complexities o wastereduction, keep pace with constantly evolving regulations,and implement creative strategies that can createnew revenue streams rom discarded materials.A comprehensive third-party logistics (3PL) providercan work with a manuacturer to establish eectivereverse logistics operations. They have the expertiseto identiy viable markets, or both devices andcomponents, to prevent items rom reaching landlls.Plus, a 3PL has the capacity to manage tremendousvolume that could potentially overwhelm amanuacturer’s operations.The 3PL can help a manuacturer avoid the xedcosts inherent with a supply chain operation, suchas technology systems, acilities, personnel andthe associated overhead. Regardless o the size othe organization, a 3PL can create tremendouseciencies. Small organizations can look to theirpartner to manage the complete supply chain,while larger manuacturers can work with them ona selective basis to supplement internal initiativeswhen volume and demand increases. The right3PL partner should be able to oer a customizedprogram to ulll any need.Recouping costs and generating revenue rom returnedproducts is an ideal scenario. However, incurringadditional expense in this process is not an attractiveoption. There must be a strategic approach involvingboth reverse logistics and asset management to takeull advantage o the process, coupled with top-downorganizational commitment.A 3PL can collaborate with its customers to determinethe best course o action to maximize the valueo returned items. But the process starts with amanuacturer’s organizational commitment, andwhat they expect to achieve rom a reverse logisticsand asset management program.Leadership must decide what investments are willingto be made, then work with the 3PL to determinewhat products are viable or repair and reurbishment, orcomponent harvesting. Is the goal or the operation tosimply break even, or produce revenue? This alignmentwill help the 3PL to apply the appropriate solution.Any approach will involve start-up costs, that transitionsto the break-even point, and ultimately (i possible)protability. Creating Opportunity Green transLation In terms o reurbishment processes, proitability ismeasured on a dierent scale. It translates toobtaining revenue rom a returned device that wouldotherwise have no value. I manuacturers can workwith a 3PL to reurbish a device by spending twodollars, to later sell it or $10, a “proit” is made,even i the device was srcinally worth $90.Sometimes a reurbished product can recover almostall o the srcinal costs, depending on its popularityand the availability o new units. Although ull marketvalue isn’t always achieved, revenue can still begenerated to help reduce operational expense.  page 3ATC Logistics & Electronics, Inc. A comprehensive reverse logistics process is theoundation or reducing e-waste and mitigatingenvironmental impact. The 3PL should be expectedto develop processes that match the uniqueorganizational needs o each customer, keeping inmind their product set and consumer base. Thisincludes eciently managing the returns processand sorting materials or reurbishment orcomponent harvesting.I a manuacturer already has collection processes inplace or returned devices, including retail locations,or direct consumer shipments, the 3PL can manageand rene the existing processes. The 3PL can alsomanage returns in a centralized location that cancreate economy o scale among a cross section ocustomers. By organizing common materials inherentto electronics, such as plastics, metals and glass,transportation costs can be reduced when shipping torecyclers, and the savings passed on to manuacturers.Repair and reurbishment operations are an inherentlygreen concept that keeps devices in the supplychain, creating revenue either through secondarymarkets, or warranty exchanges. It is important towork with a 3PL with in-depth knowledge o theelectronics industry that possesses the ability toeconomically manage this unction.Occasionally, this process can be relatively easyand inexpensive. Many devices are returned withlittle or no deects as a result o buyer’s remorse,etc. In these situations, they can be cleaned,polished and transitioned back to customers inan accelerated timerame.Other devices need to be evaluated to determine i arepair is economically easible. Conducting “triage”in this situation can assess unctionality to determinei repair is a cost eective solution and i so, whatwork needs to be perormed. An advanced 3PL canthen repair the unit and conduct testing to ensurethe product meets manuacturers specications.It can then be injected back into the marketplacemaking revenue, instead o waste.Extra care is needed or devices such as cell phones,and other equipment, that can hold personalinormation. All data should be permanently erasedrom these devices to ensure customer privacy.Manuacturers must have assurances rom their 3PLthat this inormation is properly discarded to preventidentity thet and avoid consumer backlash.The repair and reurbishment process will also requirethe acquisition o spare parts. 3PL experts can workwith manuacturers to plan and orecast what partsare needed, and when. I there is an infux o returnsthat coincide with special promotions or holidayseasons, the 3PL must be prepared with adequateparts to acilitate the reurbishment process in atimely manner. Reverse LogisticsRepair and Refurbishment WHen to refurbisH Reurbishment might not make sense or everyproduct, especially i newer versions are still thriving in the market place. It is not advisable topit reurbished items against newer versions,which can devalue the primary unit.It is better to wait or popularity to wane on existingproducts beore grabbing market share withreurbished units. Manuacturers should coordinatewith 3PLs to determine the best approach or whatunits to place on the secondary market and just asimportant, when.
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