Unlocking the Hidden Green Value in Mobile Devices
Reverse logistics for mobile devices is more important than ever. Mobile-connected devices exceeded the world's population in 2014. Wearable technology sales will hit 22 million in 2015, and reach 370 million devices over the next five years, according to analyst CCS Insight. Imagine landfills piled high with smartwatches and connected egg trays, instead of smartphones and laptops. It's not a pretty picture.
Original equipment manufacturers (OEMs) and retailers have been running reverse logistics for decades. The market has matured into a $400-billion industry. But new technological innovations, such as connected devices, present an even larger opportunity for retailers and device manufacturers.
Products are often returned, processed, and either triaged, refurbished, or recycled by a third-party logistics (3PL) provider in order to nix the step of shipping back to the OEM. Retailers are offering more trade-in and upgrade programs to provide a better customer experience. Companies are also investing additional resources into developing corporate sustainability programs to further green business models because consumers are pushing for these programs, which allow them to recoup some money ethically.
Reverse logistics is complex, requiring a networked model to provide the most value, and a host of technological management and IT process expertise. Every reverse logistics strategy should take into account the following points:
- Business intelligence is vital. Keeping data clean and up to date is one of the biggest challenges in the reverse logistics system. Devices must be tracked throughout the entire lifecycle, until they are ready to be repaired or recycled.
- Certification standards are essential. Proper certification levels, such as the certification of component parts by device manufacturers, must be met throughout each step of the reverse logistics process. The certification process is often rigorous, as manufacturers want to ensure the parts put back in their devices are quality components. Many organizations seek help from providers with expertise in device recovery that will meet manufacturer specifications, as well as adhere to industry standards, such as ISO and Responsible Recycling.
- Collaboration is crucial. A truly networked reverse logistics program features a smooth communication and data pipeline between manufacturers, providers, and suppliers. Ensuring that a product's lifecycle is visible through to its final destination means all parties must collaborate to swiftly address issues, such as hardware and software glitches, or high failure rates. Greater collaboration also ensures forward logistics operations are better integrated with reverse logistics for faster redeployment and sales.
This data provides a clear picture of demand management and forecasting, and shows the root causes of returns. The supply chain and point-of-sale data shed light on how to prevent device returns, how to reduce inventory levels, when to move product, and how much. This knowledge improves return rates, frees up capital, and increases potential revenue.
In the next five years, reverse logistics will be more critical than ever for the mobile device industry. Device lifecycles are extending far beyond cradle-to-grave, and greater volumes of new technology will require more sophisticated reverse logistics programs to avoid filling landfills with wearable technology that could be reused or recycled.