CELLULAR DATA- Trade Cycle
How your cell phone is recycled
Since logistics is all about moving things forward, the term “reverse logistics” may hit the ear a little oxymoronically; you know, like “jumbo shrimp” or “two-time Super Bowl champion Eli Manning.” But the fact is a good deal of the products that logistics moves forward into the marketplace eventually need to travel back through that same chain. Whatever the reason—defect, accident, obsolescence, momma wants the pink one—the idea of a trash heap as the last link in the supply chain seems antiquated and not the least bit green. But we’re not talking only of the environment: There’s a lot of money to be saved and made in repairing, reselling or repurposing products and their parts. Take that most ubiquitous of personal electronic devices: the cellphone. We did; and with the help of the folks over at GENCO, the industry giant that pioneered reverse logistics, we followed it forward and back.
GENCO began simply enough as the H. Shear Trucking Co. in 1898; its first pass at logistics involved Hyman Shear delivering commodities in and around Pittsburgh via a wagon drawn by a blind horse.
Through acquisition and consolidation, the company would grow into North America’s second largest 3PL. A key acquisition came in 2010 when the company added ATC Technology Corp., which provides comprehensive engineered solutions for logistics and refurbishment services in consumer electronics; notably, wireless devices.
It does business with numerous well-known wireless device manufacturers and carriers. New and used devices arriving at one of GENCO’s campuses are processed for outbound fulfillment or refurbishment and, in some cases, customized/configured to a consumer’s needs and/or specifications. They are typically run through an inbound quality-assurance check using GENCO’s InQuest Detect, an internally developed software suite that, among other things, performs an end-of-line check to make sure each device has the right software, content and branding.
If a potential anomaly is discovered, GENCO can facilitate necessary fixes. If the issues are endemic, they will work collaboratively with all parties to implement necessary updates and corrections. In rare cases, GENCO has identified and decided, with the involved parties, to hold off shipping until a long-term engineering change or software update can be made.
After being shipped out into the market to perform such critical operations as showing what one is eating or communicating how boring chem lab is, many devices will find their way back to GENCO for various reasons and from multiple sources such as retailers and service providers.
GENCO performs what amounts to physical and electronic triage to determine which devices can be economically repaired and which are destined to be scrapped. Repairs can range from simple cosmetic fixes—mending broken touch screens, removing scratches—to more serious hardware and software overhauls. Randy Engel, GENCO’s Technology Solutions division’s senior vice president of Operations, says repairs are classified by severity and complexity from one on up, with most repairs rating a level one- or two-type repair.
Decisions on effort and cost investment for each repair are made jointly by GENCO and its partners, so “we’re not putting in too much labor and parts if they’re not able to ultimately recover the handling cost,” says Engel. One option GENCO provides to keep those processing costs down is to perform higher level repair at the company’s facility located in the Mexican border city of Matamoros, which benefits from highly competitive labor rates, quick turnaround in transport and border crossing and from its proximity to Port of Brownsville’s free trade zone.
As they do when preparing to ship new devices, GENCO technicians monitor recurrent problems in the returned devices they see. Their systems are able to accurately record the reason for each failure and what was done to resolve the issue. With extensive recorded history of millions of devices processed, it is easy to recognize reasons which are statistically outliers as a percentage of overall failure types. GENCO’s staff of technical experts then focus directly on those items for further exploration and analysis in a lab environment.
GENCO estimates 85 percent of the devices it works on will end up back in the market, somewhere. Because it is able to do everything necessary under its massive roof—repairs, repackaging and kitting—devices move much quicker back into the market than if they were shipped back to their original manufacturer. Quick turnaround is critical in the fast-changing mobile device industry, GENCO’s vice president of Mobility Bob Dumais says, since products “sitting on a shelf amount to ice cubes melting. After awhile, they’re no good to anyone.”
Ultimately, a device that can’t be repaired, because it is too costly or obsolete, is harvested for its parts or its components are recycled down to their base materials. GENCO has become so good at repurposing parts and utilizing its vast network of recycling partners to recover base metals and plastics for reutilization that it’s become a company-wide point of pride that virtually no part of a device will end up in a landfill.
Refurbished devices that end up back in the marketplace are a great value because “if there is a problem, it has been identified and corrected,” Engel says. “In fact, if you look at the data—and we have significant data—the refurbished devices that go back out are at a minimum as good and in many cases actually better than the original.”
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