How OEMs Can Address Surplus Inventory E-Waste

By Logan Wamsley

The incredible electronic culture that the public now inhabits has a dark side, and it is one that has, until recently, been largely ignored: electronic waste, or “e-waste.”

E-waste can be generally described as waste that encompasses all broken, unusable, or obsolete electronic devices, components, and materials, as well as items that can be “e-cycled” (electronics that are going to be reused, resold, salvaged, or recycled). Many of these devices and components contain potentially harmful materials such as lead, cadmium, beryllium, brominated flame retardants, or even mercury and arsenic.

Going arguably back to the 1980s or even beyond, we have evolved into a society that readily embraces the need for change — at least from the perspective of the electronic devices that have become central to our daily lives. We have become accustomed to upgrading our smartphones every 18-24 months, our televisions every three to five years, and as young industries such as the smart home market continue to mature, it can be expected that many of these devices will follow the same trajectory. This doesn’t even include some of the more mundane electronic devices we now take for granted: speakers, GPS devices, thermostats, bathroom scales, routers, etc. Together, these trends create a lot of waste, and that waste has to go somewhere. In fact, the need for proper e-waste management has become an industry unto itself; according to a 2019 report from Reportlinker, the e-waste management market is poised to reach over 34 million metric tons by 2025.

But while many reports focus on the rise of e-waste from the consumer side, the manufacturer side also has played a role in the problem. As the lifecycles of many electronic OEM products continue to decrease, vast amounts of new products continually are introduced into the market. In some respects, the introduction of new products has even outpaced the size of the market; according to BankMyCell, for example, there are actually 1 billion additional mobile connections in the world than there are people.

Such an issue has required OEMs to develop processes throughout all phases of the manufacturing process that acknowledge their responsibility to help lead the market in addressing e-waste. “Although [the rise of markets such as IT] is helping to expand businesses globally,” says Xperien CEO Wale Arewa, “the growing number of ICT devices combined with the declining lifecycle of IT products, is expected to generate the need for businesses to dispose of the electronic waste securely.”

One section of the supply chain that requires particular focus is at the end of a product’s lifecycle, when the OEM must make a decision on how to properly address excess or surplus inventory. Often, in an effort to quickly regain a small portion of the original investment of the inventory and open up finite warehousing space, OEMs make the quick decision to discard their surplus for scrap. At this stage, the impact of the inventory in regards to e-waste is determined by the processes the company chosen to do the scrapping. According to the 2017 Global E-waste Monitor, 80 percent of all e-waste is not documented. In higher-income countries, approximately 4 percent is tossed into residual waste, while the fate of the remaining 76 percent is unknown — likely dumped, traded, or recycled under inferior conditions. While many organizations that specialize in the scrapping of electronic inventory have stringent procedures in place to minimize the impact of the e-waste created by their scrapping process, it is difficult for OEMs to assess the quality of the company’s scrapping process on their own terms. Indeed, many OEMs do not even consider this, and immediately choose a company based on the amount offered for the inventory in question.

Instead of immediately entering such a market, however, there are other options — ones that not only can mitigate the issue of e-waste as it relates to surplus inventory, but can net significantly more ROI based on the market value of the inventory.

Through Partstat’s Surplus Recovery Solution, for example, OEM surplus inventory will be re-sold on the market using a proven, comprehensive marketing strategy driven by Big Data. Although it is true that the components sold will undoubtedly be rendered obsolete at some point in the future, by allowing the industry to make full use of the current supply available, component manufacturers can more easily gauge how much new inventory is required without overestimating customer needs. If OEMs can make an effort to at least minimize the amount of new, unused product that transitions straight into e-waste, their contribution to the e-waste problem can be significantly reduced.