ModusLink joined the Electronic Industry Citizenship Coalition (EICC) as an applicant member two years ago with 70+ global electronic company members, including many of our own clients. Together, the coalition is working for meaningful social, ethical and environmental change in the industry. The EICC Corporate Social Responsibility Code of Conduct includes Labor, Ethics, Health & Safety, Environmental, & Management Systems—all elements which ModusLink has adopted. This is a broad scope of significant issues and there are many different things that must be implemented and monitored to ensure compliance and achieve the desired results.
For example, we achieved full membership in EICC by meeting substantial membership compliance program requirements:
- Active participation in EICC bi-annual membership meetings
- Completing EICC Self-Assessment Questionnaire (SAQ) risk assessments for all ModusLink Solution Centers
- Actively participating in EICC Tools & VAP (Validated Audit Process) workgroups and leading sub-teams on SAQ review & EICC site recognition
- Completing VAP audits at 5 Solution Centers in conjunction with various EICC member/customer requests with an additional 3 VAP audits already planned
- Completing global supplier high-risk evaluations
- Completing EICC Carbon & Water Reporting System and Carbon Disclosure Project reporting
I believe one of the most important elements of compliance and moving the needle toward significant improvements is participation in the EICC’s work groups and we have a high level of involvement. There are many dedicated people working behind-the-scenes and continually shaping and growing the coalition. ModusLink has bought into EICC’s Code of Conduct from top to bottom and we’ve altered our business operations to ensure compliance. The EICC’s vision is a core part of our business plan, and has been implemented into the solutions we build for our clients.
-Blake Cambey is a Regional Quality Manager at ModusLink
When I ask friends, family and colleagues how they view the topic of sustainability, I usually get the expected buzzwords—green, environmentally friendly or recycling are leading answers. In the academic environment, I had more than one instructor quote the Seven Generation Iroquois proverb and push the ideal of giving back and correcting more than you have taken away and have destroyed. At this point one may still be left asking “What is sustainability, how do we convey it and how can you possibly measure it?”
Personally, I view sustainability as larger than just an environmentally friendly stance or a corporate mission statement. To be sustainable you must have an objective and path forward that promotes survival. For a business, this means making decisions in its own self-interest, while also being conscious of the environment. There is a balance that must be achieved between the planet and business, preservation and growth. Building a business and profits while also being able to limit one’s adverse effect on the environment should be the global sustainability goal of a company. Often a dichotomy exists between business and the environment that is unnecessary and unproductive. Packaging can be a tremendous asset for a company’s sustainability goals and is a great example of these two principles working together.
Whether it’s been fashionable to promote or not, package engineering is a discipline that has always worked towards sustainability. Of course it can be deviated from when not properly conducted, but the science of package engineering is not new and its goal of achieving optimal packaging supports business growth and resources. Distilled down, it is the minimal amount of packaging that is required to deliver a product undamaged to a customer. As engineers, we have specific tests and standards that we follow to scientifically determine if a package is within this optimal zone. Different materials, shapes, technology, marketing, deadlines and emotions will inherently play a role in the outcome, but science helps to dictate the optimal packaging solution which is the most sustainable.
Let’s see how packaging is a player in promoting sustainability and brings it full circle into helping a business’s bottom line. The proper selection of material equals less cost, which helps increase profits. Satisfied customers receiving functional items equal fewer returns and repeat business, which also translates into future profits. Minimal material and the use of recycled and/or renewable material helps reduce the impact on the environment. Together, these elements clearly play a huge role in achieving a business’s global sustainability goals.
Going back to science, it is through tools such as the WalMart Scorecard that we can assess and determine the amount a CO2 that is generated within the lifecycle from raw material(s) to one of our solution centers, where the product is packaged. Sustainability isn’t just CO2 or reduced or recycled materials, it is also reflected in other areas like pallet densities. For example, how much more can we fit on a shipping pallet through package size reduction? Any improvements will result in freight savings, which will result in reduced gas consumption – again, both a cost savings for the company and an environmental benefit.
A global view of sustainability well executed can almost always circle back to the company through profits, allowing the business to succeed and grow and implement even more new sustainable ideas. The integrated view best helps people realize the importance and understand the meaning and impact of corporate sustainability.
-Tyler O’Neill is a packaging engineer at ModusLink where he works with clients across the globe to develop new packaging designs that improve sustainability.
As the holiday season nears, the product launch cycle of the next new things is coming to an end. We are now tempted by a range of faster, thinner, lighter and brighter devices and of course they have bigger screens. However, with mature markets reaching a saturation point, stimulating demand for new devices has to extend beyond the simple creation of desire for the latest products and the industry must look at emerging customer expectations.
Today’s targeted device replacement cycles are considerably shorter than the products’ useful lives, therefore providing consumers with a user-friendly mechanism to realize the value of their old products is an important part of financing new device sales. Trade-in programs are here to stay, but delivering true value to the market requires reliable refurbishment, data wiping and greater assurance to the customers of refurbished devices.
As functionality has increased, the customer experience extends beyond the physical hardware to include an ecosystem of software, content and applications. Consumers expect synchronized mobile, tablet, traditional computing and gaming experiences, as well as integration between business and social environments. As if on cue, the rise of cloud-based solutions helps achieve that synchronization and also provides protection for the increasing value of content on the devices.
Finally, with new devices costing up to $700 USD without a carrier subsidy, the issue of repair must be addressed. Out-of-warranty issues such as cracked screens or devices dropped in water may not be the fault of manufacturers, but loyal consumers will expect more than a “not our problem” response from leading brands. An important extension to service and repair programs will be an easily accessible out-of-warranty service.
Today’s devices are tools for photos, video, email, social, mapping, gaming and yes, they can even make phone calls. Consumers buying the latest devices expect more than just the initial thrill of a shiny new package. It’s up to manufacturers, carriers and their reverse logistics partners to work together to manage the expanding ecosystem and address the increasing service expectations that come along with that yearly purchase.
There’s a lot of news around Apple’s record 5 million new iPhone 5’s flying out of stores in the first three days. It’s a great business story, clearly a technology story and I’m happy to see that more than a few journalists are using it as an opportunity to write about the issue of electronics recycling.
I am not particularly anxious to get my hands on every new gadget that comes along. I am quite happy with the first iPhone I bought almost a year ago– the 4, sans Siri. Yet, even as a pretty restrained technology consumer, there’s still a box in the basement full of old Razors, Blackberries and more than a few oddball, decades-old handsets. If there had been the opportunity to easily trade in these phones when they were replaced, I definitely would have done so. A bit of extra cash or credit toward the new contract would be great, but so would the ability to easily get rid of an item that would serve no purpose in the future, can’t be thrown away and has no value in a yard sale.
So now that e-recycling is top-of-mind and more and more companies like Sprint are making it simple and worthwhile to trade-in, what really happens to that collection of yesterday’s technology? Given today’s general rate of phone turnover, the technology considered “old” at trade-in simply isn’t that old and there are a lot of folks who would like to have it, especially at a cost much lower than the brand new model. Additionally, many of the individual items turned over are still in good operating condition. The scenario is a lot like trading in a 2008 Accord for a new Acura. The new owner simply wants something newer, a bit flashier, perhaps with more horsepower and an updated GPS. Nothing wrong with that! And there’s also likely nothing wrong with that Accord, either, and it will go on to be a fine vehicle for the next owner.
eRecyclingCorps, one of ModusLink’s clients and a fellow founding member of the Device Renewal Forum, is putting this concept in action with mobile phones. eRC has a comprehensive program that works with retailers and carriers on trade-in programs and then evaluates, renews or recycles the devices. CNN recently visited ModusLink’s Bloomington, IN facility to see the renewal process in action. It may be too late for one of my old flip phones, but it’s not too late for your iPhone 4S!
Returns, especially consumer electronic devices, are a big business. According to a 2011 study by Accenture, between 11% and 20% of all consumer electronics (CE) devices purchased in the U.S. are returned. With volumes like that, it’s important for both retailers and manufacturers to manage returned items in ways that maximize their bottom line.
The unopened box items are easy to process, but what can be done with items that have been opened, used or even damaged in transit or during the returns process? Years ago, you would simply pay someone to recycle them and take the financial hit, but today there is such a growing aftermarket for these refurbished products that retailers and manufacturers would miss a real opportunity for resale, and therefore a larger yield, if they continued their outdated recycling process.
The key to optimizing the CE returns process and yielding the greatest return on returns is to truly understand the current market value of the item. Many CE products have a significant aftermarket value and it is worth the money to consider not only refurbishing damaged products, but also repairing them. It’s also key to have clear guidelines about where to draw the line between cost-effective repair versus potential value in the recovery of materials.
ModusLink leads the industry in reclaim services. Part of that process is strict evaluation and grading, then multiple levels of repair capability. Here is a breakdown of repair efforts:
LEVEL 1: No Fault Found
At this level, the unit is tested and inspected and if it passes the full functional test, the item can be repackaged and kitted for resale. This simple process is simply to ensure the unit is working properly. According to the 2011 Accenture study, 95% of all U.S. returned CE products will pass this level.
LEVEL 2: Software Upgrade
In addition to level 1 repair, some units may benefit from a software upgrade. This assures that when the product goes back out into the market it functions at the highest level for that product and support requirements for the product will be minimized.
LEVEL 3: Minor Repair
This level means that during the inspection process, the unit failed, but that failure is assumed to be a typical problem that can be remedied quickly. This may include repair or replacement of basic electronics or cosmetic parts. Once this repair is completed, extensive testing of the unit is performed again. If it passes, it goes on to resale. If it fails, it goes to Level 4 Repair.
LEVEL 4: Component Level Repair
In-depth diagnosis and repair is required to identify and fix damage all the way down to the circuit or component level. Years of experience and certifications are required as well as specialized equipment such as microscopes, temperature controlled soldering stations, heat guns, and BGA repair stations. Often times a small repair from an experienced technician on a valuable device, can increase yield to levels not thought possible before.
While many CE companies are taking this route to maximizing returns, a good number more can benefit from a proper feasibility study regarding repair options, parts availability and repair costs. This, coupled with a good market valuation study on the particular product, can help outline a specific plan for optimization of returns and added support for the bottom line.
It’s a growing problem with no easy solution: with the expansion of technology, an increasing amount of electronics waste is ending up in developing countries such as Ghana, India and parts of China. Most of this e-waste comes from the US and Europe, while only a small amount of it is produced locally. Africa is seeing a slightly different trend, where the burgeoning access to PCs and cell phones is creating a domestic e-waste problem. According to the UN Africa will produce more E-waste than Europe by 2017.
Although under the Basel Convention, the export of hazardous materials to other countries is prohibited, waste electrical items are routinely exported as functioning equipment or bundled with other products such as used cars. There is potential benefit to be found as most of the products are stripped to get at the high-value metals such as copper and gold. However, the toxicity of these materials directly and significantly affect the health of the people involved and pollute the landscape, soil and water for years to come. In these developing areas there are virtually no locations where the products can be processed and recycled in a safe and environmentally friendly manner. In response to this illegal dumping and the hazards it presents, many countries have put programs and legislation in place to manage waste recycling. The WEEE Directive, which puts recycling goals in place, and RoHS, which restricts certain materials use in the manufacturing of electronics, is two examples. Recognizing the problem and the opportunity to play a part in solving it, many of the largest consumer electronics companies, including HP and Samsung, have set up recycling and take back programs that manage and audit the returns and recycling process so the products are dealt with in an environmentally responsible way.
Going a step further, ModusLink is working with several entrepreneurial companies that have developed various business models based on managing the return, reuse and recycling of electronics. They represent a merging of sound business opportunity, social responsibility and even humanitarian effort in bridging the digital divide with lower cost refurbished products.
For companies looking to develop programs, several best practice points to consider include:
- Where the WEEE Directive is in place, join the local recycling group.
- Where legislation is not in place, adhere to guidelines set up by the Basel convention on the certification and testing of waste electrical equipment and get any waste recycled in a certified manner.
- Set up an accessible and efficient reverse supply chain in your country of operation.
- Work with retail and distributor channels to incentivise customers to recycle when purchasing new products.
Is your company addressing this issue in a new, unique way? Tell us about it.
Last week saw the first conference of the Council of Supply Chain Management Professionals (CSCMP) to be held in India. Assembling more than one hundred ‘movers and shakers’ in the industry from across the country and overseas, the Mumbai conference addressed various relevant topics from network design to vertical or horizontal collaboration.
Inevitably, both speakers and delegates referred - with apparent levels of frustration - to the inadequacy of systems and infrastructure to cope with the current and projected growth of consumer demand in the region. In a country of 1.2 billion inhabitants, the figures are quite extraordinary … and so are the challenges:
- serious infrastructure deficit from lack of roads and road maintenance;
- absence of deep sea ports and lack of port handling equipment;
- endemic road traffic and airport congestion,
- negligible use of alternatives cargo transport modes such as rail, coastal or inland waterways; and
- the highly fragmented, complex and restrictive regulations governing trade licences, import/export and various other taxes.
Despite all of the above, sustainability was a recurring theme at this event, starting from the choice of venue: the ITC Maratha, claiming to be the first of its kind to “achieve water, carbon and solid waste recycling positive credentials.”
From a supply chain perspective, the emphasis was put on the ways to quantify the environmental impact of any activity, with an underlying assumption that only what is measured can improve. This also allows you to focus efforts on the biggest issues first. Not just positive on the environment, it was highlighted that those initiatives aimed at reducing energy or material consumption are also likely to be positive for the bottom line.
But all is not rosy - or green for that matter! One of the companies represented shared how it recently invested in solar panels to power one of its sites, only to see them stolen from the building shortly afterwards. In other cases, initiatives somewhat disappointed because the technology was not performing to the desired level.
Nevertheless, I left Mumbai with the unexpected sensation that sustainability is very high on the agenda of my Indian counterparts. And if it was many times underlined that the local authorities have repeatedly fallen short of their own commitments in addressing the environmental issues, there is clearly no shortage of energy, creativity and willingness to take action from the Indian supply chain community.
The following post was written by Scott Crawley, President, Integrated Services for ModusLink.
More than 1.6 billion wireless devices are produced every year. Less than 1% of these devices are recycled1. With smart phones being replaced or upgraded every 11.5 months, most discarded phones show little wear, still perform to the manufacturer’s standards and have considerable life expectancy left. ModusLink has teamed with Sprint Nextel, eRecyclingCorps, Brightstar and CDMA Development Group to found the Device Renewal Forum (DRF) and breathe new life into used electronics.
The DRF is designed to expand the use of renewed devices by building awareness, ensuring product quality and certifying their proper operation. By creating a technology-agnostic “gold standard” for testing and certifying renewed devices globally, we can extend the lifecycle of wireless devices and reduce the more than 65,000 tons of toxic waste created by billions of devices discarded each year.
Earlier this week, I had the pleasure of announcing the creation of the DRF alongside the other founding members during a press conference at the Mobile World Congress in Barcelona. We were able to get in front of the leading players in the wireless space at the industry’s biggest event of the year to discuss the benefits of a device renewal standard. The benefits to the environment are clear. Our objective is to also demonstrate that proper e-recycling and device renewal can have a financial ROI if we create a more secure environment where the economic return from secondary channels outweighs the operational challenges.
This can be done by building confidence in the renewal process among potential customers, the carriers who will provide service for the devices and brand owners whose products are re-entering the market in an uncontrolled manner today. That confidence will come from the creation and maintenance of a common device renewal standard with input from these and other stakeholders in the process.
The potential benefits of this type of standard include:
• A concrete set of performance expectations for a renewed device
• Assurance around robust data wipe processes
• Access to a higher level of technology at a lower cost
• A venue for receiving value for those consumers upgrading their device
• Confidence that renewed devices will operate effectively on their networks
• Creation of a new pool of potential customers
For OEM brands:
• Address key issues of intellectual property protection
• Shorten the replacement cycle for new devices by creating a stronger market for renewed devices
For device renewal partners:
• Create a certifiable standard that will be used in the industry for the protection of employees, consumers and the environment
• Ability to leverage economies of scale
The biggest potential winner in this process is the environment. With more than 80 percent of all cell phone purchases in the U.S. to replace an existing phone2, Dave Edmondson, founder and CEO of eRecyclingCorps summed it up best, “Reuse is the highest order of recycling.”
We are delighted to be a part of the forum and have high ambitions for what it can achieve. I’d like to invite other interested stakeholders to join us in developing the standard and eventually creating standards for other consumer electronics renewal beyond mobile phones. Visit the DRF website to learn more.
Share your success stories about device renewal or other ideas for reducing e-waste below.1. Source: CDG, GSMA and EPA 2. Source: Gartner
This post, written by Robert J. Bowman, originally appeared in the SupplyChainBrain THINK TANK blog and is reposted with permission from SupplyChainBrain.
It’s easy for a top executive who’s concerned about corporate image to profess a solid commitment to sustainability. When it comes to gauging actual progress toward that goal, however, the reality is one of mixed messages.
A study by Accenture, released in the spring of 2011, highlights the dilemma. The firm reached out to 247 C-suite executives in the U.S., U.K. and China. Ninety-three percent said they had sustainability initiatives in place. Seventy-two percent declared that the benefits from those efforts – in the form of enhanced corporate reputation and trust, lower cost and improved brands – had exceeded expectations. And 68 percent viewed sustainability as an integral part of their business.
Seems like a pretty encouraging picture, but being a glass-half-empty kind of guy, I need to point out that a solid one-third of respondents to the Accenture survey saw sustainability as peripheral to their operations. Slightly more, 34 percent, considered it more of a cost than an investment, and 28 percent believed their companies were already spending too much in that area.
In fact, cost continues to be the biggest barrier to achieving corporate sustainability, as specified by 41 percent of the respondents. Other obstacles cited included an inability to measure the results of sustainability initiatives (31 percent), lack of government incentives (30 percent), and a belief that one company can’t make much of a difference in the effort to combat global warming (29 percent).
Turn now to a more positive study, this one by BSR, a global network of more than 250 businesses dedicated to implementing corporate policies that promote sustainability, accountability and human rights. Conducted in tandem with the research consultancy GlobeScan, the survey polled 498 executives from more two-thirds of BSR’s member companies. Eighty-four percent said they were optimistic that global businesses would embrace sustainability and corporate social responsibility as part of their core strategies within the next five years.
Commented BSR president and chief executive officer Aron Cramer: “Recession or not, it seems very clear that companies are maintaining if not extending their commitments to sustainability.” Positive signs include the rise of the chief sustainability officer and increasing attention being paid to the topic by corporate boards. Speaking at a press conference at BSR’s annual conference in San Francisco, Cramer said companies are realizing that sustainability has intrinsic value. They are coming to see it as “one way to future-proof their strategies.”
I’ll buy that to an extent, while noting the self-selecting nature of a group of companies already devoted to achieving sustainability by way of membership in the same organization that’s polling their interest in that very subject. And BSR’s portrait wasn’t all roses. It identified a serious shortfall in efforts to integrate sustainability into core business functions.
More than two-thirds of respondents said their corporate communications and public affairs departments were the most engaged functions in sustainability and CSR. (No surprise there – what else are corporate communications and public affairs for? Can you say “greenwashing”?) But the numbers slide precipitously when it comes to areas such as marketing (42 percent), research and development (41 percent), human resources (37 percent) and finance (18 percent). In fact, the biggest surprise to the 2011 study’s authors was “the level of engagement of sustainability across the enterprise and how little connectivity there is,” said GlobeScan senior vice president Chris Coulter. “The disconnection is really a challenge.”
Former Vice President Al Gore, now the world’s most high-profile cheerleader in the fight to reverse global warming, was the BSR conference’s keynote speaker. He said efforts by CEOs to integrate sustainability into their operations have become “a global movement.” At the same time, he acknowledged a persistent tendency by companies to focus on the short term. Investors are the chief culprits, pressuring businesses to show ever-rising profits on a quarter-to-quarter basis. Such a mentality, Gore said, “is a terribly debilitating force in the market.” Demands from the investment community supply a “constant headwind” for executives struggling to look beyond the next reporting period.
So we’re faced with plenty of good intentions, some progress and an institutional aversion to the kind of long-term thinking that is crucial to the success of any corporate sustainability effort. BSR seems to feel that this attitude is changing rather quickly. And Gore’s message was positive on balance, even though he continues to deride the kind of “magical thinking” that denies the reality of global warming.
It would appear that true progress toward sustainable supply chains won’t be made until all businesses come to see the issue not solely as one of corporate beneficence but of self-interest. Considering the positive impact of efforts such as economizing on fuel, cutting back on packaging, shortening supply lines and making better use of finite resources, that should be an easy case to make.
On January 1st, a new law took effect in California. The California Transparency in Supply Chains Act of 2010 requires any retailer or manufacturer doing business in California and with greater than $100 Million in annual revenue to train employees and publish their approach to eliminating forced labor and human trafficking in their supply chains. The effective date of this legislation comes at a time of increased interest in the social implications of how products are made and distributed. And the interest extends well beyond the industry; I have begun to see people raise this topic on social networking sites like Facebook and Twitter.
The increased focus on socially responsible supply chains is clearly a good thing. Any improvements made in this area – whether as a result of legislation, corporate action, or consumer attention – are unarguably positive. That said, I believe that many of the people outside the supply chain industry who have recently begun to take an interest in social responsibility in the supply chain would be pleased to learn what companies are doing in this area.
In order to comply with the new California law, companies have published their approach to preventing forced labor in their supply chains on their websites. (Here are examples from HP, IBM.) But for most companies (certainly including HP and IBM), a commitment to a socially responsible supply chain is nothing new. For many companies (including ModusLink and many of our clients), joining the Electronic Industry Citizenship Coalition (EICC) was one way to ensure an industry-standard approach to social responsibility. A large number of companies have adopted and published codes of conduct and comprehensive Corporate Social Responsibility (CSR) Reports (view ModusLink’s CSR report) that go well beyond the standards of the EICC. In other words, many of the world’s leading companies are leading by example.