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TF3 Project Report: Best Practices in Re-Use Success Factors and Barriers for Re-use Operating Models

Best Practices in Re-Use

Success Factors and Barriers for Re-use Operating Models

Project Report

29 April 2011

Author

Ramon Kissling, Empa, St. Gallen/ Switzerland

To

Task Force Re-use of the StEP Initiative for Solving the E-Waste Problem

i


Project group

• Andrew, Stefan (TU Braunschweig)

• Böni, Heinz (Empa)

• Borrman, Jeff (Datec)

• Cox-Kearns, Jean (Dell)

• Dickenson, John (AER Worldwide)

• Fitzpatrick, Colin (University of Limerick

• Holberg, Thomas (Dataserv)

• Kissling, Ramon (Empa)

• Kramer, Daniel (Datec)

• Luger, Tobias (TU Braunschweig)

• Lüpschen, Claudia (UNU)

• O’Connor, Clementine (Bio Intelligence Service)

• O’Connell, Maurice (University of Limerick)

• van Loon, Joep (Flection)

• Zide, Marie (Ericsson)

Acknowledgements

We would like to thank all case study partners and interviewees for their valuable input. Moreover, we

would like to thank the following persons for their support and constructive comments:

• Dittke, Susanne (EnviroSense CC)


• Schluep, Mathias (Empa)

• Uribe, Lina (Empa)

• Widmer, Rolf (Empa)

ii


Abstract

The present report has a twofold purpose: it aims first to define a typology for the most common re-use

operating models for electrical and electronic equipment (EEE) and second to identify specific and

generic success factors and barriers for the different models derived from this typology. Thereby, the

outcome of this study may serve as a basis for further work to support re-use.

The scope of the study was limited to information and communication technologies (ICT) and large

household appliances.

To describe and categorize re-use operating models, an analytical framework was defined, which

consists of four dimensions, i.e. the supply chain, the offer, the customers and the financial structure.

Based on this framework, standardized telephonic and personal interviews were conducted with 28

case study partners.

Four re-use operating models for ICT and large household appliances were identified:

• The Networking Equipment Recovery model

• The IT Asset Management model

• The Close the Digital Divide model

• The Social Enterprise model

The first two models are for-profit, whereas the last two are not-for profit. Moreover, models differ in

terms of customer segments and products and services offered to these customers. The Networking

Equipment model processes information technology (IT) networking equipment for original equipment

manufacturers (OEMs) as main customers. IT Asset Management organizations specialize in

refurbishment of desktop and notebook computers for resale to distributors and retailers. The Close

the Digital Divide model provides used computers to eligible recipients in developing countries. Social

Enterprises prepare computers or large household appliances for re-use and sell them through retail

shops to individual users.

The identified models constitute generic ways to structure re-use operations along the four dimensions

of the analytical framework (“supply chain”, “offer”, “customers”, “finance”). Different entities can utilize

one or multiple combinations of these models.

It should be noted, that the difference between the two for-profit-models is not definite and different

views were hold in the sub-group. Even though the present division into the Networking Equipment

Recovery model and the IT Asset Management model follows from the theoretical application of the

analytical framework, the two models might overlap a lot in practice. An alternative categorization

would be to distinguish only three models: one for-profit-model and two not-for-profit-models.

As for success factors and barriers the interview data revealed clear differences between the four

models. Especially the not-for profit models have distinct success factors and barriers due to the

export of used equipment to developing countries, where recycling and disposal of distributed

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products poses a major problem, or due to the nature of large household appliances requiring different

collection and preparation for re-use processes.

However, a list of generic success factors and barriers, which are relevant for each re-use operating

model, could also be identified. The identified generic re-use success factors and barriers were ranked

by the interviewees with regards to their importance. On the one hand, the difficulty in accessing

sufficient volumes of good quality used equipment and the lack of legislations, which support,

incentivize and - if necessary - enforce this access, were identified as most impactful barriers. On the

other hand, the control and securing of product and process quality were ranked as most important

success factors. Re-use organizations, which adhere to good re-use practices, differentiate

themselves through quality guarantee from non-compliant, informal competitors. Moreover, proven

quality strengthens confidence in re-use of important stakeholders like suppliers, customers,

authorities and the general public.

The lack of a globally recognized re-use standard received the 10th out of 13 ranks. However, in the

interviews, all case study partners affirmed, that they would welcome and support the development of

a globally recognized re-use quality standard, since such a standard would enhance transparency in

the re-use sector and, thereby, also support a more positive societal perception of re-use.

Based on the findings outlined above, the project sub-group makes the following three

recommendations to the StEP initiative:

1. Support the development of a globally recognized re-use quality standard.

Despite the low ranking in the prioritization-survey for the barriers, the sub-group suggests,

that StEP sticks to the objective of supporting the development of a re-use certification

standard, because such a standard could both facilitate the implementation of success factors

and reduce the impact of barriers. For instance, a certified compliance with a globally

recognized standard would serve as a documented proof and signal for controlled process

and product quality, which was ranked as a first priority success factor.

The decision, whether such a standard should be developed by StEP itself or whether existing

standardization initiatives should be supported needs further discussions among the StEP

members. However, in either case the support of the development of a re-use standard should

be based on further research on best re-use practices (see below) and on cooperation with

respective actors and bodies who work on re-use standardization.

Moreover, the sub-group suggests that StEP focuses on two aspects particularly in its work on

and input to standardization and regulation programs. First, standardization work and

regulations should consider specific and generic success factors and barriers for re-use

operating models. They should facilitate success factors (such as documented quality control)

and reduce barriers (such as administrative burdens imposed on transboundary movements of

used equipment, which is destined for function testing or re-use) where reasonable. And

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second, coordination and harmonization of different standards and regulations1 should be

enhanced. Different standards and regulations should not conflict each other. For instance, if

re-use is explicitly given priority in WEEE-legislation, this should also be implemented in public

and industry organized collection and recycling schemes. Such implementation, however,

depends on cooperation and involvement of all concerned parties.

2. Support the definition of quality measures for the collection, preparation for re-use and

distribution (including export) processes.

The analysis has affirmed the importance of quality control for the success of re-use operating

models. The sub-group suggests that StEP defines concrete quality measures for the

collection, preparation for re-use and distribution of used EEE, which could be provided as

input or recommendations to the work on regulations and standards. These quality measures

should take into account differences between designs of re-use operating models and

between product categories. If useful, quality measures should be differentiated for different

re-use operating models and product categories. The definition of measures for control and

documentation of process and product quality should rely on standards that have already

been developed for single processes (e.g. PAS 141:2010 developed by BSI, British Standards

Institution, 2010) or single product types (e.g. the guideline on environmentally sound testing,

refurbishment, & repair of used computing equipment developed by PACE - Partnership for

Action on Computing Equipment, 2011).

3. Support the amelioration of the access to used EEE with re-use potential for re-use

organizations.

Access to sufficient volumes of good quality used equipment was ranked highest in

importance for both success factors and barriers by the interviewees meaning that, even

though being a critical precondition for the success of any re-use operating model, this access

is still significantly hampered. The sub-group therefore suggests that StEP undertakes further

research in how the access to used EEE can be improved and what framework-conditions

should be considered when facilitating this access for re-use organizations; e.g. re-use

organizations complying with a certain re-use standard (see recommendation Nb. 1) could be

granted priority in access to public collection sites for sorting of equipment with potential for re-

use. This work would most probably involve legal and regulative aspects and investigation of

public or industry organized collection schemes. Again, cooperation with respective actors and

bodies is recommended.

1 Examples of regulations and standards, which impact re-use are “the Basel Convention on the Control of transboundary Movements of Hazardous Wastes and their Disposal” (Conference of the Parties to the Basel Convention, 1992), the Directive 2002/96/EC of the European Parliament and of the Council of 27 January 2003 on waste electrical and electronic equipment (WEEE) (European Parliament and Council of the European Union, 2003), the “Guideline on environmentally sound testing, refurbishment, & repair of used computing equipment” (PACE - Partnership for Action on Computing Equipment, 2011) or the PAS141:2010 (BSI, British Standards Institution, 2010).

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With the investigation of re-use operating models, the present study has entered a widely unexplored

field, which uncovered the potential for further research. In relation to the recommendations presented

above, the sub-group suggests focusing on two areas for further research or projects:

1. Best practices in re-use

The present study has identified success factors and barriers; this opens the question of how

these success factors are and can best be implemented. Therefore, a potential for further

research consists in the analysis of best practices for the implementation of critical success

factors, such as track and trace documentation of product flows from collection to preparation

for re-use to distribution to recycling and final disposal. This best practices investigation could

build the basis for deriving quality measures for re-use operations (see recommendation Nb.

2), serve as input for the development or enhancement of a re-use quality standard (see

recommendation Nb. 1) or be used to build a benchmarking reference framework for re-use

organizations.

2. The impact of existing regulations and standards on re-use

The access to sufficient volumes of used EEE, which was identified as a critical barrier, is

largely influenced by the regulative frameworks that re-use operating models operate in. As

mentioned above, a variety of regulations and standards exist that impact re-use operations.

In order to integrate considerations of success factors and barriers as identified in the present

study into existing regulations and into the work on a re-use standard (see recommendation

Nb. 1), an overview over different relevant regulations, collection and recycling schemes and

existing standards as well as a detailed understanding of the concrete impact of them on re-

use operations is necessary. An understanding of the incentives and functioning logics driving

these regulations and collection and recycling systems would enable the derivation of

recommendations for the improvement of the access to EEE with potential for re-use (see

recommendation Nb. 3).

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Table of content

Project group .............................................................................................................................................i

Acknowledgements ...................................................................................................................................i

Abstract ..................................................................................................................................................... ii

Table of content ....................................................................................................................................... vi

Table of figures ....................................................................................................................................... vii

Table of tables ........................................................................................................................................ vii

Abbreviations ......................................................................................................................................... viii

1 Introduction ...................................................................................................................................... 1

1.1 Background of the project .................................................................................................. 1

1.2 Purpose of study ................................................................................................................ 1

1.3 Scope ................................................................................................................................. 2

1.4 Project organization ........................................................................................................... 3

2 Method ............................................................................................................................................. 4

2.1 Inductive research based on case study analysis ............................................................. 4

2.2 Procedure for derivation of results ..................................................................................... 5

2.2.1 Definition of success for re-use operating models ................................................. 5

2.2.2 Definition of the re-use value chain ........................................................................ 6

2.2.3 Definition of an analytical framework for re-use operating models ........................ 8

2.2.4 Collection of data with case study partners ............................................................ 9

2.2.5 Analysis of data and derivation of results ............................................................... 9

3 Results ........................................................................................................................................... 11

3.1 Re-use operating models ................................................................................................. 11

3.1.1 Networking Equipment Recovery Model .............................................................. 13

3.1.2 IT Asset Management Model ................................................................................ 16

3.1.3 Close the Digital Divide Model .............................................................................. 18

3.1.4 Social Enterprise Model ........................................................................................ 20

3.1.5 Summary: comparison of different models ........................................................... 22

3.2 Success factors and barriers for re-use operating models .............................................. 25

3.2.1 Specific success factors and barriers ................................................................... 25

3.2.2 Generic success factors and barriers ................................................................... 30

4 Conclusions and recommendations .............................................................................................. 36

Bibliography ........................................................................................................................................... 40

List of interviews .................................................................................................................................... 41

Appendix ................................................................................................................................................ 42

Appendix 1 - Interview-guide ......................................................................................................... 42

Appendix 2 - List of success factors and barriers mentioned in the interviews ............................ 45

Appendix 3 - Survey for ranking of generic success factors and barriers ..................................... 48

vii


Table of figures

Figure 1: Methodical procedure for derivation of results ......................................................................... 5

Figure 2: Generic EEE value chain and potential actors ......................................................................... 7

Figure 3: Business Model Framework adapted from............................................................................... 8

Figure 4: Analytical framework for case study analysis .......................................................................... 9

Figure 5: Overview of generic re-use operating models for ICT and large household appliances ....... 12

Figure 6: Networking Equipment Recovery model ................................................................................ 13

Figure 7: IT Asset Management model ................................................................................................. 16

Figure 8: Close the Digital Divide model ............................................................................................... 18

Figure 9: Social Enterprise model ......................................................................................................... 20

Figure 10: Generic barriers in order of importance ............................................................................... 32

Figure 11: Generic success factors in order of importance ................................................................... 34

Figure 12: Survey for ranking of generic success factors and barriers for re-use operating models .... 49

Table of tables

Table 1: Scope of study ........................................................................................................................... 2

Table 2: Case study set ........................................................................................................................... 4

Table 3: Number of case studies per re-use operating model and country .......................................... 11

Table 4: For profit re-use operating models .......................................................................................... 23

Table 5: Not for profit re-use operating models ..................................................................................... 24

Table 6: Success factors for the Networking Equipment Recovery model ........................................... 25

Table 7: Barriers for the Networking Equipment Recovery model ........................................................ 25

Table 8: Success factors for the IT Asset Management model ............................................................. 26

Table 9: Barriers for the IT Asset Management model ......................................................................... 26

Table 10: Success factors for the Close the Digital Divide model ......................................................... 27

Table 11: Barriers for the Close the Digital Divide model ..................................................................... 28

Table 12: Success factors for the Social Enterprise model ................................................................... 28

Table 13: Barriers for the Social Enterprise model ............................................................................... 29

Table 14: Distribution of respondents to survey for ranking of success factors and barriers ............... 30

Table 15: Generic barriers derived from the interviews and ranked by the interviewees ..................... 31

Table 16: Generic success factors derived from the interviews and ranked by the interviewees ......... 31

Table 17: Success factors with number of mentions for the different operating models ...................... 46

Table 18: Barriers with number of mentions for the different operating models ................................... 47

viii


Abbreviations

CtDD Close the Digital Divide

CEM Contract Equipment Manufacturer

EEE Electrical and Electronic Equipment

HQ Head Quarter

IAM IT Asset Management

ICT Information and Communication Technologies

IT Information Technology

NER Networking Equipment Recovery

OEM Original Equipment Manufacturer

SE Social Enterprise

StEP Initiative for Solving the E-Waste Problem

TF ReUse Task Force 3 for Re-use of the StEP Initiative

1


1 Introduction

1.1 Background of the project

Over the last decades, the re-use sector for electrical and electronic equipment (EEE) has been

growing steadily. Despite facing different challenges, many organizations have established successful

operating models for the collection, preparation for re-use and redistribution of used EEE both in the

profit and in the non-profit sector. However, up to now, the technological, economic, social and

ecological structure of the re-use value chain and the respective interdependencies are widely

unknown (Baker & King, 2007).

Even though different regulative frameworks have been established or are being developed to control

product and process quality for the treatment of used EEE2, so far, a globally recognized quality

standard for organizations engaging in the preparation and redistribution of EEE for re-use does not

exist. StEP, the Initiative for Solving the E-Waste Problem3, aims to support the development of such a

standard, which would enhance transparency and social, ecological and economic sustainability of re-

use operations. However, a better, holistic understanding of the complex structure and dynamics of

the re-use sector is a premise for the development of a global quality framework.

1.2 Purpose of study

Against the background outlined above, the StEP Task Force ReUse4 initiated the project «Best

Practices in Re-Use», which aims to identify and document best practices in collection, preparation

and re-distribution for re-use and to provide concrete input to the development of a global re-use

quality standard. The present study about «Success Factors and Barriers for Re-use Operating

Models» was launched as first part of the «Best Practices in Re-Use» project.

The study has a twofold purpose:

• To define a typology for the most common re-use operating models, both profit and not for

profit.

• To identify specific and generic success factors and barriers for the different models derived

from this typology.

The insight from the present study should provide a basis for possible follow-up work under the «Best

Practices in Re-Use» project to better support re-use.

2 E.g. the PAS 141:2010, a standard, which has been developed by the British Standard Institution, and regulates the preparation of EEE for re-use process. 3 See www.step-initiative.org 4 StEP established five taskforces to facilitate research and pilot projects in line with StEP’s objectives. The StEP TF 3 engages in the topic of re-use of EEE and has defined the following goals for its work: “The goal of TF ReUse is to define globally consistent «reuse»-practices, principles, and standards for EEE products from B2B and B2C users that are economically, socially, and environmentally appropriate for: a) Changing consumer behaviour to get acceptance for reuse and early product take back (avoiding long storage at consumer site) b) Extending the usage of EEE products and components c) Reducing the flow of irresponsible reuse between donor and development countries «shame-reuse»” (derived on 04 April 2011 at: http://www.step-initiative.org/pdf/taskforces/TF%203%20ReUse%20-%20TOR.pdf).

2


1.3 Scope

Table 1 summarizes the scope of the study.

Dimension In scope Out of scope

Operating model

- Both for profit and not for profit legal entities organizing an operating model

- Informal sector for re-use of EEE - Sheer trader, private seller

Product category

- Information and Communication

Technologies (ICT) - Large household appliances

- Small household appliances

- Consumer equipment - Lighting equipment, (including electric light

bulbs and household luminaries)

- Electrical and electronic tools - Toys, leisure and sports equipment - Automatic dispensers

- Medical equipment

Geography - Operating models from Africa, South

America, North America, Europe

- Operating models from Asia

Table 1: Scope of study

The study investigates both not for profit and for profit operating models; despite the differences in the

financing, many good practice showcases of re-use operations exist for both sectors. However, the

informal sector has not been included in the scope of this study, which investigates legal entities

preparing EEE for re-use in a comprehensible and transparent way.

Several electrical and electronic product types are suited for re-use (e.g. medical equipment, large

photocopiers). However, the study focuses on ICT products (excluding large photocopiers) and on

large household appliances. For these two product categories, large and steadily growing commercial

and non-commercial markets have developed in the past decade. This situation offers an excellent

opportunity to investigate different operating models that dominate these sectors. Moreover, an

analysis of the technical, social, economic, environmental and legal re-use potential of the different

EEE-categories by O'Connell, Fitzpatrick and Hickey (2010) supports a clear fitness for re-use for ICT

and large household appliances.

As organizations engaging in re-use operations face different challenges in industrialized and in

developing countries, the analysis included operating models from both contexts. The case study set

represents operating models from Latin America, Africa, North America and Europe. When all StEP

members were invited to suggest case studies for the present work no Asian cases were proposed.

Whereas the StEP community has well established relations to the re-use sector in the above

mentioned regions, so far, little contacts have developed to Asian re-use organizations. Due to this

hindered access to concrete data no Asian case study was included in this analysis. However, this

does not imply that no re-use operating models and no good re-use practices may exist in Asian.

3


1.4 Project organization

The study was steered by StEP and jointly worked out by Empa and the Technical University (TU) of

Braunschweig. A subgroup to the StEP Task Force Re-use was formed to ensure and support project

execution. Members of the subgroup were:

• Andrew, Stefan (TU Braunschweig)

• Böni, Heinz (Empa)

• Borrman, Jeff (Datec)

• Cox-Kearns, Jean (Dell)

• Dickenson, John (AER Worldwide)

• Fitzpatrick, Colin (University of Limerick

• Holberg, Thomas (Dataserv)

• Kissling, Ramon (Empa)

• Kramer, Daniel (Datec)

• Luger, Tobias (TU Braunschweig)

• Lüpschen, Claudia (UNU)

• O’Connor, Clementine (Bio Intelligence Service)


• van Loon, Joep (Flection)

• Zide, Marie (Ericsson)

4


2 Method

2.1 Inductive research based on case study analysis

As this study pursues an exploratory purpose an inductive design is applied; the aim is to derive

generic operating models and success factors and barriers by analysing specific successful re-use

cases. The results are based on 28 case studies, listed in the table below.

HQ5 in Africa HQ in Latin America

HQ in North America

HQ in Europe total in %

Info

rmat

ion

and

Com

mun

icat

ion

Tec

hnol

ogie

s

for

prof

it

• Just PC’s

• Mico

• LetMeRepair

• - • AER Worldwide

• PC Rebuilders

and Recyclers

• Dell

• Cisco

• Flection

• Dataserv

• Datec

Technologies

• Ericsson

11 40%

not f

or p

rofit

• Computers for

Schools Kenya

• Camara

Education Ltd

Kenya

• Chilenter

• Computadores

Para Educar

• World Computer

Exchange

• TechSoup Global

• Computers for

Classrooms

• InterConnection

• WITS

• Computer Aid

• Close the Gap

• Rehab

• Camara

13 46%

Larg

e ho

useh

old

equi

pmen

t

for

prof

it

• - • - • - • - 0 0%

not f

or p

rofit

• - • - • - • R.U.S.Z

Reparatur und

Service-Zentrum

• Bryson Electrical

Recycling

• Komosie

• Den Azalee

4 14%

total 5 2 9 12 28 100%

in % 18% 7% 32% 43% 100%

Table 2: Case study set

60% of the case studies are not-for-profit, the rest for-profit organizations. As for geographic

distribution, 20% of the case study partners are headquartered in developing countries. Six of the non-

profit organizations located in industrialized countries engage in the export of ICT equipment to

developing countries. Whereas three organizations process large household appliances, the great

majority of the case study partners focuses on preparing and redistributing ICT equipment for re-use.

This great variety in the case study set poses limitations to the generalizability of the results. However,

the analysis enables the identification of typical patterns by investigating specific good practice case

studies. 5 HQ = Headquarter

5


Semi-structured interviews were conducted with representatives from each case study partner to

derive a generic typology of re-use operating models. All interviewees were also asked, which critical

success factors and barriers they regard as most important for their operations. A comparative

analysis then allowed the derivation of generic success factors and barriers for the different re-use

operating models. Besides telephone interviews, field visits to 13 case study partners were undertaken

to analyse operational processes and practices at site.

2.2 Procedure for derivation of results

The different generic re-use operating models for ICT and large household appliances and the

respective success factors and barriers were derived by following a five-steps process (see figure

below).

Figure 1: Methodical procedure for derivation of re sults

Each of these steps is described in detail below.

2.2.1 Definition of success for re-use operating mo dels

Based on the StEP White Paper «One Global Understanding of Re-use – Towards Common

Definitions» re-use is defined as follows in the present study:

“Re-use of electrical and electronic equipment or its components is to continue the use of it (for the

same purpose for which it was conceived) beyond the point at which its specifications fail to meet the

requirements of the current owner and the owner has ceased use of the product (StEP - Solving the E-

Waste Problem, 2009a).”

Three aspects are important to understand the concept of re-use. First, re-use involves a change of

product ownership; another owner begins use of the EEE or its components and this continued use

then substitutes the use of a new product. Second, re-use can be applied both on the whole-product

level and on the component level. And third, re-use contributes to the ecologic and economic

optimization of the product life cycle, but does not constitute a solution to the e-waste problem in its

own right. By extending the use phase of EEE or its components with a potential for re-use and, thus,

substituting for the use of newly produced EEE or its components, re-use can enhance resource and

energy efficiency over the entire product life cycle. Thereby, potential for re-use is defined as the

ecologic, economic and social advantageousness of re-use compared to direct product-recycling and

disposal (StEP - Solving the E-Waste Problem, 2009a). This definition recognizes the fact, that re-use

constitutes not always the optimal solution at a product’s end-of-life; the product type, the product

6


condition, the eco-efficiency of comparable new substitute-products and other contextual factors

impact the re-use potential.

Since this study aims to identify generic success factors and barriers for re-use operating models, first

the meaning of success needs to be clarified. Derived from the definition outlined above, this study

defines two criteria of success for a re-use operating model. First, a re-use operating model is

successful, when it contributes to the extension of the use phase of products with an ecologic,

economic and social potential for re-use and thus to the avoidance of e-waste. Second, a re-use

operating model is successful, when it is financially viable, i.e. capable to generate a stable income

through the sale of products and services or through other income streams such as public or private

donations, which enable it to properly perform and develop its operations in the long term.

2.2.2 Definition of the re-use value chain

The generic value chain for electrical and electronic equipment (EEE) serves as a frame of reference

for the identification and analysis of the different re-use operating models. Based on Luger (Luger,

2010) and StEP (StEP - Solving the E-Waste Problem, 2009a), six consecutive value chain processes

can be distinguished, which, in an ideal scenario, form a closed loop system. The value chain starts

with the production process, where the function of the product is installed. The product is then

distributed to private and corporate users. Depending on the operator of the distribution channel,

different after-sales services, such as technical support, user training or lease-financing, are offered to

the customers. Once the product reaches its end-of-use and is disposed of, it is collected by public or

private institutions. The products are then tested for function and product safety and, based on the

determined re-use value, sorted for preparation for re-use or recycling and disposal. Re-use

organizations often offer collection in combination with specific after-use services like data destruction,

refurbishment for remarketing or environmental compliance certification. Even though these services

are mainly offered to corporate suppliers (B2B6), individual users (B2C7) may also demand some of

them (e.g. data sanitation). Whereas recycling is responsible for the recovery of materials, which can

be returned into production, preparation for re-use is to recover the function, for which a product

originally was designed. Preparation for re-use of EEE typically involves disassembly, inspection and

cleaning, electrical safety and function testing, component retrieval, component repair, component

exchange, software installation and reassembly (Luger, 2010; StEP - Solving the E-Waste Problem,

2009a). After the preparation for re-use process, products or components, which could not be brought

up to re-use requirements, are forwarded to recycling and disposal. Re-usable products and parts are

redistributed either directly to end-users, to distributors and retailers, back to the original user for

redeployment or to repair service companies as spare parts or components. As for the distribution

channels, equipment is either distributed via direct delivery or via retail outlet shops (mostly for B2C

sales). Many re-use organizations also use the internet as a sales channel by running own electronic

6 “Business to Business” 7 “Business to Consumer”

7


shops on their websites, or by offering the products on electronic market-platforms like ebay8,

BrokerBin9 and others.

Figure 2 depicts the value chain and the actors potentially involved in its different stages. Re-use

organizations typically engage in collection and after-use services, preparation for re-use and re-

distribution. These three processes, together with the linkage to recycling, constitute also the focus of

this study. They either operate all of these processes in-house or focus on one or two core processes

and outsource the others to strategic partners. It is important to note, that the figure below makes no

geographical differentiation for processes and actors. Depending on the concrete re-use operating

model, processes are performed at different geographic locations. Products might, for instance, be

collected and prepared for re-use in Europe and then shipped to Africa, where they are redistributed to

eligible recipients for further use and then, ideally, recollected and recycled locally.

Figure 2: Generic EEE value chain and potential actors

As discussed above, the sequence of the processes in Figure 2 makes clear, that re-use does not

compete with recycling as a solution for the e-waste problem but ideally optimizes economic and

ecologic efficiency of the entire product life cycle by extending the use phase to its optimum duration.

Therefore, it is particularly important, that re-use organizations transparently manage the link to proper

recycling and disposal once their products have reached the definite end of life.

8 www.ebay.com 9 www.brokerbin.com

8


2.2.3 Definition of an analytical framework for re- use operating models

A descriptive framework for business models defined by Osterwalder et al. (Osterwalder, Pigneur, &

Tucci, 2005) was used to derive generic re-use operating models from the case study analysis.

Osterwalder et al. (Osterwalder, Pigneur, & Tucci, 2005) suggest four dimensions to categorize

business models: the “value proposition” refers to the products and services offered to the customers.

The “infrastructure” subsumes the configuration of the value chain processes and technologies to

deliver the products and services. “Marketing” corresponds to the distribution channels and market

segments served by an organization. “Finance”, finally, refers to the financing model, i.e. an

organization’s cost-revenue-structure.

For the application in this study, the four categories were slightly adapted to the context of EEE-re-use

(see figure below).

Figure 3: Business Model Framework adapted from (Os terwalder, Pigneur, & Tucci, 2005)

As for the infrastructure, the focus was given to the “supply-chain”, i.e. the types of suppliers delivering

used EEE to a re-use operating model and the specific configuration of the EEE-value chain. For the

dimension “value proposition”, the analysis concentrated on the “offer”; what products and services

does a re-use organization offer to its suppliers and to the customers buying or receiving the EEE,

which it has prepared for re-use? The marketing-dimension looks at the segments of “customers”

served and analyses how the relationship to them is organized. Under “finance” the main cost

positions and revenue streams of the re-use organizations were investigated. Revenues can either

stem from sales of products and services, from sales of sorted material for recycling or from public or

private funding. With regards to the financial dimension, it is important to consider, whether an

organization pursues a for-profit or a not-for-profit purpose, since this decision also impacts the other

framework categories.

9


Based on these four dimensions, a standardized framework was developed to analyse and categorize

generic re-use operating models (see figure below).

Figure 4: Analytical framework for case study analy sis

By analyzing the case studies with this framework, four main re-use operating models could be

identified, which are explained in detail in chapter 3.1.

2.2.4 Collection of data with case study partners

Most information was collected through personal interviews, which were conducted either per

telephone or through personal visits. A standardized interview-guide (see appendix), which was

structured along the analytical framework outlined above, served as a basis for all interviews. This

enabled the comparison and a systematic analysis of the results.

Internet-research, mainly by investigating information and documents publicized by the case study

partners on their websites, complemented the information gathered through the interviews.

2.2.5 Analysis of data and derivation of results

The generic re-use operating models for ICT and large household appliances were identified by

comparing the results from the interviews based on similarities and differences in the dimensions of

the analytical framework.

The finance-dimension was identified as a first level differentiating criteria; two for profit driven and two

not-for-profit driven models were identified. On a second level, re-use operating models were

differentiated based on their customers the product- and services-offer and the configuration of the

supply chain.

10


Once the generic re-use operating models had been identified, all success factors and barriers

mentioned in the interviews were listed with the respective respondents. The derivation of generic

success factors and barriers from these specific answers was difficult for two reasons: first, the list

could be incomplete due to important success factors and barriers, which might not have been

mentioned in any of the interviews. Second, success factors and barriers that are relevant for different

operating models could have been mentioned only by one or a few interviewees.

However, based on the interview data, a list of generic success factors and barriers could be derived

too.

11


3 Results

3.1 Re-use operating models

Based on the case study analysis four generic re-use operating models could be distinguished:

1. The Networking Equipment Recovery model

2. The IT Asset Management model

3. The Close the Digital Divide model

4. The Social Enterprise model

These are operating models, which does not necessarily mean they are company models. That is,

different companies and entities can utilize one or multiple combinations of these models. As the

naming indicates, they are conceptualized and described here as generic ways to structure re-use

operations along the four dimensions “supply chain”, “offer”, “customers” and “finance”.

Especially, the distinction between the two for-profit-models is not definite and different views were

hold in the sub-group. The present categorization into the Networking Equipment Recovery model and

the IT Asset Management model follows from the theoretical application of the analytical framework.

However, in practice, the two models might overlap a lot. An alternative categorization would be to

distinguish only three models: one for-profit-model and two not for profit models.

The table below shows the distribution of the case studies per re-use operating model and per country.

Africa Latin

America

North

America

Europe total in %

Networking Equipment

Recovery

0 0 2 2 4 14%

IT Asset Management 3 0 2 2 7 25%

Close the Digital Divide 2 0 2 3 7 25%

Social Enterprise 0 2 3 5 10 36%

total 5 2 9 12 28 100%

in % 18% 7% 32% 43% 100%

Table 3: Number of case studies per re-use operatin g model and country

The Networking Equipment Recovery and the IT Asset Management model are both for-profit oriented.

The Close the Digital Divide and the Social Enterprise Model are not-for-profit10. The figure below

gives an overview of the different models. Each of them is described in detail in the next chapters.

All quantitative and qualitative data and information contained in these descriptions are based on the

interviews conducted with the case study partners. All data and information refer to the period 2009-

2010. In the description of the different models, all quantitative information are indicated as ranges,

which show the difference between the lowest and the highest value within the group of case studies

for the respective operating model. Therefore, the data are not directly generalizable without further

research and verification.

10 Here, the terms „for-profit“ and „not-for-profit“ are used in their legal understanding. A “not-for-profit” organization does not pay its financial surplus to its owners, but invests it in means to achieve the organization’s goals.

12


Figure 5: Overview of generic re-use operating mode ls for ICT and large household appliances

13


3.1.1 Networking Equipment Recovery Model

Figure 6 depicts the actors and flows of products and e-waste for the Networking Equipment Recovery

model.

Figure 6: Networking Equipment Recovery model

Below, the model is described along the four dimensions of the analytical framework.

14


Supply chain Networking equipment, e.g. rack servers, routers or switches, constitutes the majority (65-75%11) of

supply processed by IT Networking Equipment Recovery companies.

They receive most of their input from equipment manufacturers (65-80%). The rest is collected from

corporate commercial users; these corporate users are either customers of an Original Equipment

Manufacturer (OEM), and the Networking Equipment Recovery company takes the equipment back on

behalf to the OEM, or the corporate users hire the Networking Equipment Recovery company directly

for asset recovery or internal redeployment12 services.

Networking Equipment Recovery companies also collect new equipment from equipment

manufacturers13. New equipment consists of excess or obsolete production that has never been used

and accounts for 25-40% of total input.

The Networking Equipment Companies, who participated in this study, collect a several 100’000 units

per year14. The reuse rate is 40-60% of supply. This portion is redistributed for re-use mostly in form of

parts and components. The rest goes to further treatment as e-waste. The rather low re-use rate can

be explained by the fact, that networking equipment can be up to 15 years old (e.g. telecom base

stations), when it is swapped, and, therefore, has a lower potential for reuse as a whole product. This

explains why Networking Equipment Recovery organizations only harvest components and parts from

a huge part of the products received.

Offer Networking Equipment Recovery organizations offer three main services:

- Internal remarketing of whole products: for this service, Networking Equipment Recovery

organizations refurbish the equipment and sell it on behalf of the supplying customer to internal

users within the supplier’s organization; these are typically other business units, which do not need

the newest equipment, or which can employ used equipment for training and education. But OEM

repair and maintenance service centres constitute also an important customer segment; they use

the refurbished equipment for replacement of broken products in maintenance contracts.

- Internal redeployment of components and parts: this service consists of dismantling large

networking equipment taken back from OEM-customers and harvesting components and parts for

re-use. These components and parts are typically sold back to internal or external OEM repair and

maintenance service centres where they are used to provide repair services in maintenance

contracts.

- External remarketing: this is a classical asset recovery service where the Networking Equipment

Recovery organization either buys the used products or components and parts, prepares them for

reuse and sells them to distributors on own account, or it sells them on behalf of the supplying

customer and keeps a portion of the resale profit.

11 In the following, all quantitative information are indicated as ranges, which show the difference between the lowest and the highest value in the group of case studies for the respective operating model 12 According to StEP (StEP - Solving the E-Waste Problem, 2009a, p. 9) “redeployment comprises any action of renewed deployment of previously used electrical and electronic equipment or its components within the organization of the owner.” 13 From Original Equipment Manufacturers (OEMs) or Contract Equipment Manufacturers (CEMs). 14 A more exact figure for quantity of input supply was not accessible in the interviews.

15


Brand protection is an important concern for OEMs. They make sure, that all refurbished products are

sold only to controlled certified distributors. Some OEMs even require the Networking Equipment

Recovery companies to dismantle all products taken back on their behalf and prepare only proprietary

spare parts and components for reuse, for which there is an internal demand from OEM service repair

and maintenance or education centres. As for the rest of the collected equipment, the Networking

Equipment Recovery companies are allowed to refurbish and resell only non-proprietary commodities.

These are usually sold to international distributors or traded on international online market platforms

like BrokerBin15.

In order to be able to offer their services in the different national markets of their global customers,

most Networking Equipment Recovery company run international networks of collection- and

preparation-for-reuse-locations.

Customers As described above, the equipment prepared for reuse is either redeployed by the OEMs or OEM

service partners for repair services or internal training and education programs (20-80%). In this case,

the Networking Equipment Recovery company is paid a processing fee per item. The rest is sold as

commodities or certified refurbished products to distributors and retailers (5-65%). Typically,

Networking Equipment Recovery organizations can generate higher profits by selling refurbished

products and parts to distributors or retailers on the open market compared to the profit made by

redistributing them to OEM customers. However, as mentioned above, many OEMs try to strictly

control the distribution of own used products to the open market. However, they allow the Networking

Equipment Recovery companies to harvest precious materials from the equipment taken back from

OEM customers. The Networking Equipment Recovery companies can sell these materials to

processors at a profit.

Finance The Networking Equipment Recovery case studies, who participated in this analysis, have an annual

income between 10 and 20 Mio. USD. 50-60% of revenues stem from sale of products, 25-30% from

sale of sorted materials for recycling and 10-25% from sale of services (collection, processing fees,

certified data destruction).

15 www.brokerbin.com

16


3.1.2 IT Asset Management Model

Figure 7 depicts the actors and flows of products and e-waste for the IT Asset Management model.

Figure 7: IT Asset Management model


Supply chain In contrast to Networking Equipment Recovery companies, IT Asset Management companies

specialize in the refurbishment and remarketing of desktop and laptop computers (80-85% of

equipment processed).

They receive the majority of their input from commercial corporate users (60-100%). The equipment

from commercial corporate users is either owned by an OEM or a leasing company, which offer a

take-back service to their customers and contract an IT Asset Management company for collection,

refurbishment and remarketing of the equipment, or the equipment is owned by the corporate user,

who directly contracts the IT Asset Management company for asset recovery (see below).

17


As corporate users swap their IT equipment on average every 2-3 years, this equipment comes with a

high potential for re-use (70-95%16).

Whereas the small enterprises17, which participated in this study, process between 2’000-20’000

assets per year, the medium sized enterprises18 with a global network of locations for collection and

refurbishment, process 500’000-1’000’000 assets per year.

Offer IT Asset Management companies are specialized in offering asset recovery services. They collect

used equipment from corporate users, refurbish it and remarket it prevailingly to retailers, who sell it to

individual users. The IT Asset Management company either buys the used equipment from corporate

users and remarkets it on own account or sells on behalf of the supplying customer and keeps an

agreed share of the resale profit. Data sanitation and certification for compliant re-use, recycling and

disposal respectively build a crucial part of an asset recovery service, since corporate users are

particularly concerned about secure destruction of all information and data stored on the used

equipment.

Refurbishment for redeployment is another service, where the collected equipment is refurbished and

redeployed back in the supplier’s organization, either by distributing the equipment to other

organizational units, which do not need the newest equipment, or by selling or donating it to the

employees.

Some IT Asset Management organizations also offer refurbishment for donation programs, where the

refurbished equipment is donated to eligible recipients19. Processing costs are then either covered by

the eligible recipients or by the corporate user, who donates the equipment. Some IT Asset Recovery

companies also charge no processing fee for refurbishment for donations but keep a portion of the

donated equipment for remarketing for their own account.

Customers IT Asset Management companies have four typical customer segments; 0-75%20 of the equipment

goes to retailers and distributors (for external remarketing), 0-60% is distributed back to the supplying

corporate users for redeployment, 5-85% is sold or donated to eligible recipients, and a minor part (5-

16 Only for one case study partner the re-use potential was below 70% (25%). 17 According to the European Commission’s definition an enterprise qualifies as small if it has less than 50 employees and in addition either an annual turnover of less than 10 Mio. Euros and/or a balance sheet total of less than 10 Mio. Euros (derived on 08th April 2011 at http://ec.europa.eu/enterprise/policies/sme/facts-figures-analysis/sme-definition/index_en.htm). 18 According to the European Commission’s definition an enterprise qualifies as medium sized if it has less than <250 employees and in addition either an annual turnover of less than 50 Mio. Euros and/or a balance sheet of less than 43 Mio. Euros (derived on 08th April 2011 at http://ec.europa.eu/enterprise/policies/sme/facts-figures-analysis/sme-definition/index_en.htm) 19 Eligible recipients are defined customer segments that qualify to receive refurbished equipment for free or on special terms. Thereby, the original user, who donates the equipment, or the IT Asset Management company, who distributes it, define which users qualify as eligible recipients. Typically, these are the same groups as served by Close the Digital Divide organizations (see below); educational institutions, health and medical institutions, non-governmental organizations or other not-for-profit organizations. 20 The great variance in these ranges can be explained by the fact that the 7 case studies for the IT Asset Management model differed significantly in terms of customer segments. Whereas most case study partners concentrated on sales to retailers and distributors, one case study partner specialized in refurbishment for redeployment and another sold most of the equipment to eligible recipients.

18


30%) is sold directly to individual users, typically through own e-shops or internet market platforms like

ebay.

Finance While the small enterprises, who participated in this study, have an annual income between 200’000

and 500’000 USD, the midsized enterprises’ annual income accounts for 25-30 Mio. USD. 35-90% of

revenues stem from sale of products, 0-50% from sale of sorted materials for recycling and 0-20%

from sale of services (collection, processing fees, certified data destruction).

3.1.3 Close the Digital Divide Model

Figure 8 depicts the actors and flows of products and e-waste for the Close the Digital Divide model.

Figure 8: Close the Digital Divide model


Supply chain Close the Digital Divide organizations focus on the same products like IT Asset Management

companies, i.e. computers, whereby desktop systems constitute the main category (80-85%) besides

laptop computers (10-15%).

19


Most equipment is donated to Close the Digital Divide organizations by corporate commercial and

public users (40-95%). Equipment supplied by individual users accounts for 5-50% of total input. One

of the case study partners receives approx. 40% of the used equipment from non-commercial users

(NGOs, not-for profit organizations).

Due to the relatively large portion of supply by corporate commercial users, who swap their IT assets

more frequently than private households, the average potential for re-use is between 40-90%.

Depending on the size of the Close the Digital Divide organization, total annual supply ranges from

1’000 up to 42’000 units.

Most Close the Digital Divide organizations perform collection and refurbishment in-house. Typically,

they rely on volunteer labour to keep operational costs low. Some Close the Digital Divide

organizations focus only on the sourcing of ICT donations and the identification of eligible recipients

and have completely outsourced all refurbishment operations to professional IT Asset Management

companies. They pay their refurbishing partner a processing fee per item for the collection and

preparation for re-use services.

Offer Equipment is usually donated to Close the Digital Divide organizations. In exchange, they offer

collection, secure data sanitation and certification for compliant preparation for re-use or recycling and

disposal to the donators. Usually, a Close the Digital Divide organization directly provides these

services to suppliers or donators. However, if it has outsourced collection and preparation for re-use to

a refurbishment partner, this partner performs all services offered to suppliers or donators.

Close the digital divide organizations typically refurbish the equipment where it has been collected (in

North America or Europe) and then export it to developing countries. Most Close the Digital Divide

organizations ship the equipment to local distribution partners, local based not-for-profit organizations

and social enterprises, which are not only responsible for local distribution but also for the provision of

technical support and take-back of the equipment for final recycling and disposal at its end-of-life.

Some exporters have even established own subsidiaries in the recipient countries to ensure provision

of these services. Proper recycling and disposal is the biggest challenge for exporters of used ICT

equipment, as developing countries still lack the infrastructure for appropriate end-of-life treatment of

EEE. As a consequence, many exporters have started to engage in partnerships with local as well as

international partners to develop national or regional recycling systems in the recipient countries.

Customers As mentioned above, products are usually distributed through local partners, who perform another

quality check on the equipment, sometimes install operating systems and basic software, and allocate

the equipment to eligible recipients, which are mostly educational institutions, but also medical

institutions or local NGOs and not-for profit organizations.

Some Close the Digital Divide organizations also ship directly to eligible recipients, if these recipients

can proof to have the capacity to secure proper operability and maintenance of the equipment (e.g.

through an internal technical department).

20


Whereas some Close the Digital Divide organizations charge cost recovery prices to the recipients,

others set lower prices and finance the uncovered operational expenses through fundraising.

Finance For the Close the Digital Divide organizations in the case study set annual income ranges from

800’000 to 2’300’000 USD. Whereas for some organizations, fundraising constitutes the major source

of income (0-85%), others generate most income through sale of products (5-90%). Sale of services

and of e-waste or sorted materials to recyclers account for less than 10% of total income.

3.1.4 Social Enterprise Model

Figure 9 depicts the actors and flows of products and e-waste for the Social Enterprise model.

Figure 9: Social Enterprise model


Supply chain Two sub-types of Social Enterprises can be distinguished: organizations that process ICT and such

that focus on large household appliances.

21


- Supply chain for Social Enterprises focusing on ICT:

The main difference between the Social Enterprises who specialize in ICT equipment and the

Close the Digital Divide organizations concerns the location of the market: Social Enterprises do

not export outside the country where they collect the equipment. Desktop and notebook computers

constitute the major product line.

Social Enterprises, which focus on ICT products, source 80-95% of used equipment from corporate

users, the rest from individual users.

Depending on the size of the organization, total annual supply ranges from 9’000 to 500’000 items.

The potential for re-use ranges between 30% and 80%.

- Supply chain for Social Enterprises focusing on large household appliances:

There are three main potential suppliers of used equipment for Social Enterprises who process

large household appliances; individual users (0-85%21), public collection sites (5-70%) or retailers

(0-50%), who transfer customer returns for preparation for re-use or recycling and disposal. One

case study organization also receives equipment from recyclers (0-15%), where it cherry-picks the

re-usable items. Total annual supply ranges from 2’500 to 1’300’000 items per year with a re-use

potential between 10% and 70%.

Offer As for the offer, the main differences between the two Social Enterprise types consider service

offerings.

- Offer for Social Enterprises focusing on ICT:

Social Enterprises that focus on ICT products receive the used equipment as donations. They offer

the same services to supplying customers as Close the Digital Divide organizations: collection,

secure data destruction and certified compliant preparation for re-use or recycling and disposal.

After preparation for re-use they sell a big share of the products to eligible recipients, i.e.

educational or medical institutions or not-for-profit organizations. They offer technical support and

maintenance warranty services to these customers. The Social Enterprises usually charge a fee, if

the customers wish to extend the services beyond the warranty period. Some of the Social

Enterprises also offer user trainings and capacity building support. The service of taking back the

equipment when the products have reached their end-of-life fulfils an important function; it secures

safe recycling and disposal of the products.

- Offer of Social Enterprises focusing on large household appliances:

Social enterprises, which offer large household appliances, often also process small household

appliances and consumer electronics (25-60% of total supply). Washing machines account for 10-

40%, electric cooking appliances for 10-15%, freezing appliances for 0-25% and dish washer for 0-

20% of total supply. In terms of services, Social Enterprises, which process large household

21 The great variance in the ranges reflects the differences between the case studies, which participated in the present study. Each of the four Social Enterprise case studies for large household appliances focuses on a different supply channel: one sources most equipment directly from individual users, another collects mainly from retailers (products returned by customers to retailers when they buy a new product), and two receive most part of used products from public collection sites.

22


appliances, offer collection and certification for compliant preparation for re-use or recycling to

suppliers. To receiving customers, they offer technical support, maintenance and repair services.

Customers

There are also different customer segments for the two product lines:

- Customers of Social Enterprises focusing on ICT:

Desktop and notebook computers are distributed to both eligible recipients (10-100%), mostly

educational institutions, and to low income individual users (0-55%). One of the case study

partners sells mainly to distributors and retailers (90%), like an IT Asset Management organization.

- Customers of Social Enterprises focusing on large household appliances:

Social Enterprises for large household appliances distribute almost exclusively to individual users

through own or externally managed charity retail shops.

Except for one, all of the Social Enterprises, which participated in the present study, whether they

focused on ICT or on large household appliances, sold exclusively to local markets, i.e. in the same

country where they have collected the equipment. One case study partner, who is specialized in ICT

products, sells refurbished equipment to distributors; it is possible, that these distributors export some

equipment outside the country of collection.

Finance The financial structure looks similar for the two Social Enterprise types:

- Financial structure of Social Enterprises focusing on ICT:

The annual income for the Social Enterprise case studies processing ICT equipment amounts to

500’000-5’000’000 USD. For these Social Enterprises, income is generated either through sale of

products (0-80%), through sale of sorted material for recycling (0-30%) or through private or public

funding (0-100%).

- Financial structure of Social Enterprises focusing on large household appliances:

As for the case studies concentrating on large household appliances, total annual income varies

between 450’000 and 38’500’000 USD. Main income streams are as follows: sale of products (15-

80%), collection-, refurbishment- and repair-services (0-80%), private or public funding (5-20%)

and sale of e-waste and sorted materials to recyclers (0-20%).

3.1.5 Summary: comparison of different models

The tables below summarize the identified re-use operating models and compare them along the

dimensions of the analytical framework. The great variety in the case study set and the peculiarities of

the single organizations analysed make it difficult to derive generally valid results, especially when it

comes to quantitative data. Therefore, the quantitative information are indicated as ranges in the

tables. The ranges show the difference between the lowest and the highest value in the group of case

studies for the respective operating model. It is important to be aware of the limited generalizability

when interpreting the data. However, they do provide a basis to understand the typical logics behind

the four models and the aspects that differentiate them from each other.

23


Model Networking Equipment Recovery (4 case studies) IT Asset Management (7 case studies) S

up

ply

Ch

ain

Supplying customers

• Equipment manufacturers (production sites, labs, excess & obsolete production): 65-80%

• Corporate commercial & public user (customer take-backs for OEMs, asset recovery services): 20-35%

• Corporate commercial and public users: 60-100% • Distributors and retailers: 0-15% • Individual users: 0-20% • IT service companies: 0-10%

Supply p.a. • >100’000 units • 2’000-1’000’000 units

Re-use rate • approx. 40-60% • 25-95%

Value chain • In-house • Collection • Preparation for re-use • Recycling

22: dismantling and sorting of materials

• Outsourced • Recycling: pre- and end-processing of materials • Disposal of hazardous waste

• In-house • Collection • Preparation for re-use • Recycling: dismantling and sorting of materials


Off

er Products lines • IT networking products

• IT networking parts & components: boards, PCBs, ICBs, Hard-disks • Desktop computer systems (incl. monitors): 40-75% • Notebook computers: 10-40% • Others (mobiles, networking equipment, …): 15-30%

Pricing • no information • Desktop computers: 10-500 USD (depending on specs.) • Laptop computers: 200-750 USD (depending on specs.)

Min. specs • depend on market demand • Pentium 3-4 (status 2011)

Services offered

• To supplying customers • Asset recovery and remarketing • Preparation for redeployment as spare products or parts for maintenance and

repair services • Data security and brand protection

• To receiving customers • Product warranty: 1-3 months

• To supplying customers • Asset recovery and remarketing • Data security

• To receiving customers • Product warranty: 12 months

Cu

sto

me

rs

Receiving customers

• Distributors and retailers: 5-65% • Equipment manufacturers (for internal re-use in labs or as spare parts for

maintenance and service repairs provided to OEM customers): 20-80% • Others (OEM service repair companies, private users): 0-20%

• Distributors and retailers: 0-75% • Corporate commercial and public users(reemployment): 0-60% • Eligible recipients: 5-85% • Individual users: 5-30%

Market region • Global • National, regional, or global 23

Fin

an

ce

Purpose • For profit • For profit

Income p.a. • 10’000’000-20’000’000 USD • 200’000-30’000’000 USD

Revenues • sale of products, components and parts: 50-60% • sale of sorted materials for recycling: 25-30% • sale of services (collection, processing fees, …): 10-25%

• sale of products, components & parts: 35-90% • sale of sorted materials for recycling: 0-50% • sale of services: 0-20%

Costs • Procurement: 60% • Employee compensation: 15% • Operations (building/ energy): 10% • Logistics: 10% • Admin & Marketing: 5%

• Procurement: 10-60% • Employee compensation: 15-40% • Operations (building/ energy): 10-20% • Logistics: 10% • Admin & Marketing: 0-20%

Table 4: For profit re-use operating models (quanti tative ranges indicate extreme poles on the scale f or case studies of same re-use operating model)

22 The recycling chain includes collection, dismantling, pre-processing and end-processing of materials (StEP - Solving the E-Waste Problem, 2009b, p. 13). Some re-use organization perform some of these processes, typically dismantling and sorting of recyclable materials, in-house. Pre- and end-processing is usually outsourced to specialized processors. 23 Three of the IT Asset Management case studies, which participated in this analysis, operate on an international scale: two focus on the European market region, one operates globally.

24


Model Close the Digital Divide (7 case studies) Social Enterprise for ICT (6 case studies) Social Enterprise for large household appliances (4 c.)

Su

pp

ly C

ha

in

Supplying customers

• Corporate commercial & public user: 40-95% • Corporate non-commercial users: 0-40% • Individual users: 5-50%

• Corporate commercial and public users: 45-95% • Individual users: 0-20% • Distributors: 0-50% (new equipment)

• Municipalities (public collection sites): 5-70% • Individual users: 0-85% • Retailers: 0-55%

Supply p.a. • 1’000-42’000 units • 9’000-500’000 units • 2’500-1’300’000 units

Re-use rate • 40-90% • 30-80% • 10-70%

Value chain • In-house • Collection • Preparation for re-use • Recycling: dismantling and sorting of materials


• In-house • Collection • Preparation for re-use • Recycling: dismantling and sorting of materials


• In-house • Collection • Preparation for re-use

• Outsourced • Recycling: dismantling and sorting of materials • Recycling: pre- and end-processing of materials • Disposal of hazardous waste

Off

er Products lines • Desktop computer systems (incl. monitors): 80-90%

• Notebook computers: 10-15% • Others (printers, networking equipment, …): 1-5%

• Desktop computer systems (incl. monitors): 50-100% • Notebook computers: 5-30% • Others (consumer electronics, networking, …): 1-25%

• Washing machines: 10-40% • Electrical cooking appliances: 10-15% • Dish washers: 5-20% • Cooling and freezing appliances: 0-25% • Other (ICT: 0-5%; consumer electronics): 25-60%

Pricing • Desktop computers: 40-200 USD (depending on specs) • Laptop computers: 150-250 USD (depending on specs)

• Desktop comp.: 0 (donations)-200 USD (dep. on specs) • Laptop comp.: 0 (donations)-300 USD (dep. on specs.)

• Cooling & freezing appliances: 70-200 USD • Washing machine: 100-1’000 USD • Electrical cooking appliances: 80-280 USD

Min. specs • Pentium 4 (status 2011) • Pentium 3-4 (status 2011) • No standardized minimal specs.

Services offered

• To supplying customers • Refurbishment for donation • Data security

• To receiving customers (provided by local partners) • Product warranty: 0-12months • Technical support, maintenance and repair • ICT education and user training • Take-back for recycling and disposal

• To supplying customers • Refurbishment for donation • Data security

• To receiving customers • Product warranty: 1-12 months • Technical support, maintenance and repair • ICT education and user training • Take-back for recycling and disposal

• To supplying customers: - • To receiving customers

• Product warranty: 6-12 months • Technical support, maintenance and repair • Take-back for recycling and disposal

Cu

sto

me

rs

Receiving customers

• Non-commercial corporate users (eligible recipients; educational institutions, health institutions, not-for profit organizations, NGOs): 0-100%

• Individual users: 0-10%

• Distributors and retailers: 0-90% • Corporate non-commercial users (educational

institutions, health, institutions, NGOs): 10-100% • Individual users: 0-55%

• Individual users: 95-100% • Corporate non-commercial users (retirement homes,

schools, …): 0-5%

Market region • Developing countries (Export) • Local • Local

Fin

an

ce

Purpose • Not-for profit • Not-for profit • Not for profit

Income p.a. • 800’000-2’300’000 USD • 500’000-38’500’000 USD • 450’000-4’300’000 USD

Revenues • sale of products, components & parts: 5-90% • sale of sorted materials for recycling: 0-10% • sale of services (collection, processing fees, …): 5-15% • Private and public funding: 0-85%

• sale of products, components & parts: 0-80% • sale of sorted materials for recycling: 0-30% • sale of services: 0-5% • Private and public funding: 0-100%

• sale of products, components & parts: 15-80% • sale of sorted materials for recycling: 0-20% • sale of services (technical support, repair, …): 0-80% • Private and public funding: 5-20%

Costs • Procurement: 5-60% • Employee compensation: 15-70% • Operations (building/ energy): 5-50% • Logistics: 5-10% • Admin & Marketing: 5-20%

• Procurement: 5-40% • Employee compensation: 15-60% • Operations (building/ energy): 10-20% • Logistics: 10-20% • Admin & Marketing: 5-20%

• Procurement: 5-10% • Employee compensation: 40-70% • Operations (building/ energy): 15-25% • Logistics: 5-40% • Admin & Marketing: 5-10%

Table 5: Not for profit re-use operating models (qu antitative ranges indicate extreme poles on the sca le for case studies of same re-use operating model)

25


3.2 Success factors and barriers for re-use operati ng models

Each interviewee was asked to name the success factors and barriers, which she/he regards as

critical for her/his organization’s operations. Given this open question-format, a diverse list of success

factors and barriers resulted from the interviews. The tables in appendix 2 exhibit this list and show

how many case study partners representing the same operating model have mentioned the respective

success factor and barrier. It is important to note, that this list is directly composed from the 28 case

study interviews. It might not be complete as interviewees might have not mentioned some factors

because they personally do not regard them as important or because they have simply forgotten to

mention them. For the same reason, some factors or barriers, which were mentioned only for one

operating model, might be relevant for other models as well. Moreover, due to lack of time in the

interview, some interviewees have not answered the question for the success factors and barriers at

all, and their perspective is therefore missing in this analysis. In the tables, each success factor and

barrier was attributed to a dimension of the analytical framework (supply chain, offer, customers or

finance). However, a clear attribution is not always possible as some factors and barriers impact

several dimensions of an operating model.

Being aware of these methodical limitations the success factors and barriers for each model can be

summarized as follows.

3.2.1 Specific success factors and barriers

The success factors and barriers for each model are summarized in the tables below without further

comments. The discussion follows in chapter 3.2.2 where the generic success factors and barriers are

presented.

3.2.1.1 Success factors and barriers for the Networ king Equipment Recovery model Operating mo-del dimension

Success factors Mentions in interviews

Supply chain 1. Secure user data sanitation and/or OEM brand protection 1 Supply chain 2. Geographic coverage (national or international network for collection,

preparation for re-use and/or re-distribution) 1

Supply chain 3. Cooperation with partners (for collection, preparation for re-use, research & development, distribution and customer services)

1

Customers 4. Stakeholder relationship management (trust of supplying and receiving customers, reputation, positive recognition and presence in media, political backing, network of influential contacts)

1

Table 6: Success factors for the Networking Equipmen t Recovery model

Operating mo-del dimension

Barriers Mentions in interviews

Supply chain 1. Complex legal and regulatory situation leads to administrative effort and costs for collection, preparation for re-use and redistribution of used products (especially for transboundary movements from Non-OECD to OECD countries)

2

Supply chain 2. Unpredictability in supply and demand 1 Supply chain 3. Risk of unsound preparation for re-use by non-certified actors; customers

buying OEM branded equipment from such actors, could experience problems with the product, which would negatively impact the OEM’s reputation

1

Supply chain 4. Corruption and lack of governmental enforcement of anti-corruption legislation

1

Customers 5. Some OEMs do not approve of the sale of used products, because they fear that these products compete with OEM branded new products

1

Finance 6. Costs for global take-back for re-use and recycling program for OEMs 1 Table 7: Barriers for the Networking Equipment Recov ery model

26


3.2.1.2 Specific success factors and barriers for t he IT Asset Management model Operating mo-del dimension

Success factors Mentions in interviews

Supply chain 1. Access to high quality used equipment (local or import) 4 Supply chain 2. Control of product and process quality during preparation for re-use 4 Supply chain 3. Qualification as OEM authorized take-back partner 2 Supply chain 4. Secure user data sanitation and/or OEM brand protection 2 Supply chain 5. Certified compliance with environmental legislation and regulations 2 Supply chain 6. Diversified know-how and experience of employees/ volunteers 2 Supply chain 7. Geographic coverage (national or international network for collection and

preparation for re-use) 2

Supply chain 8. Diversified portfolio of supplying customers 1 Supply chain 9. Transparency & track-and-trace capability from collection to preparation

for re-use to re-distribution (and to recycling and disposal if relevant) of used products.

1

Supply chain 10. Throughput volumes 1 Supply chain 11. Turnover rate (short storage duration given a fast deterioration of asset

value) 1

Supply chain 12. Value conserving logistics 1 Supply chain 13. Cooperation with partners (for collection, preparation for re-use,

research & development, distribution and customer services) 1

Supply chain 14. Short technology cycles (if users swap equipment regularly, it becomes available for preparation and redistribution for re-use)

1

Offer 15. Quality and reliability of products 2 Offer 16. Customer services (offered to both supplying and receiving customers) 2 Customers 17. Stakeholder relationship management (trust of supplying and receiving

customers, reputation, positive recognition and presence in media, political backing, network of influential contacts)

3

Customers 18. Diversified portfolio of customer segments 1 Customers 19. Capability to adapt quickly to the market 1

Table 8: Success factors for the IT Asset Management model



Supply chain 1. Bad re-use practices (“shame re-use”) lead to reluctance towards re-use 2 Supply chain 2. Access to sufficient volumes of used equipment at good quality and at

low costs 1

Supply chain 3. Access to the right products at good quality (diversified assortment of product lines; e.g. shortage of monitors, since original users swap less monitors)

1

Supply chain 4. Lack of sound take-back-, recycling- and disposal-infrastructure in recipient countries, especially for products containing hazardous materials. Costs of formal recycling operations exceed revenues generated from sales of sorted materials. Little support of OEMs in the development of local recycling and disposal systems.

1

Supply chain 5. Complex legal and regulatory situation leads to administrative effort and costs for collection, preparation for re-use and redistribution (especially for transboundary movements from Non-OECD to OECD countries).

1

Supply chain 6. Variety of different standards and lack of global re-use standard with clear definitions

1

Supply chain 7. Market for products: prices of new EEE decrease, approaching the level of refurbishing costs. Demand for used EEE decreases

1

Supply chain 8. Regular software up-date requirements imply faster hardware up-grades 1 Customers 9. Economic situation: users renew their ICT assets less often and recipients

buy less during recession 1

Finance 10. Logistics costs 1 Table 9: Barriers for the IT Asset Management model

27


3.2.1.3 Success factors and barriers for the Close the Digital Divide model Operating mo-

del dimension

Success factors Mentions in

interviews

Supply chain 1. Securing of a proper recycling solution for the equipment, which is distributed for re-use

4

Supply chain 2. Access to high quality used equipment (local or import) 3

Supply chain 3. Control of product and process quality during preparation for re-use 2

Supply chain 4. Project management: planning, monitoring and reporting competences 1

Supply chain 5. Secure user data sanitation and/or OEM brand protection 1

Supply chain 6. Certified compliance with environmental legislation and regulations 1

Supply chain 7. Diversified know-how and experience of employees/ volunteers 1

Supply chain 8. Cooperation with partners (for collection, preparation for re-use, research & development, distribution and customer services)

1

Offer 9. Capacity building (ICT trainer and user training) 3

Offer 10. Quality and reliability of products 1

Offer 11. Low pricing of products distribute for re-use 1

Offer 12. Product sales and service contacts with obligation for product return and take-back at end-of-use

1

Offer 13. Ability to offer attractive sustainable and socially responsible services and/or products to suppliers and/or recipients (given an increasing public interest in sustainable production and consumption)

1

Customers 14. Local presence for provision of technical support, education and training services and take-back for recycling and disposal services (either through local subsidiaries or partners or own staff temporarily visiting and consulting the recipients)

3


2

Customers 16. Diversified portfolio of customer segments 1

Customers 17. Identification of eligible recipients 1

Customers 18. Geographic coverage (national or international network for collection, preparation for re-use and/or re-distribution)

2

Finance 19. Cost effective preparation for re-use process 2

Finance 20. Volunteer labour (low labour costs) 1 Table 10: Success factors for the Close the Digital Divide model



Supply chain 1. Lack of sound take-back-, recycling- and disposal-infrastructure in recipient countries, especially for products containing hazardous materials; Costs of formal recycling operations exceed revenues generated from sales of sorted materials; Little support of OEMs in the development of local recycling and disposal systems.

4

Supply chain 2. Access to sufficient volumes of used equipment at good quality and at low costs

3

Supply chain 3. Competition from informal sector or un-licenced recyclers. Some of them pay for used equipment, which also increases procurement costs for compliant institutions.

2

Supply chain 4. Bad re-use practices (“shame re-use”) lead to reluctance towards re-use. 2 Supply chain 5. Ban on import of refurbished IT equipment in certain countries 2 Supply chain 6. Lack of legislation that sets financial incentives for re-use and enforces re-

use 2

Supply chain 7. Competition with recyclers for supply of used equipment (some recyclers pay for used equipment)

1

Supply chain 8. Public and industry organized collection and recycling schemes do not consider re-use in their design (no value conserving collection; logistical and financial discrimination of retailers, who contribute EEE for re-use)

1

Supply chain 9. Corruption and little enforcement of anti-corruption legislation 1 Supply chain 10. Reliability and transparency of reporting systems in recipient countries 1 Customers 11. Market for products: prices of new EEE decrease, approaching the level of

refurbishing costs. Demand for used EEE decreases 2

Customers 12. Economic situation: during recession users less often renew their ICT assets and recipients buy less

1

28


Customers 13. Economic and technical constraints of customers (limited financial resources for procurement of equipment, limited infrastructure for proper use of equipment)

1

Finance 14. Funding of services (e.g. capacity building) provided to eligible recipients (fundraising needed)

1

Finance 15. Dependence on donations and/or public funds, which constitute instable and restricted income streams, makes long-term planning difficult

1

Table 11: Barriers for the Close the Digital Divide model

3.2.1.4 Success factors and barriers for the Social Enterprise model Operating mo-

del dimension

Success factors Mentions in

interviews

Supply chain 1. Contracts with compliance schemes (or operation of own compliance scheme) for collection with option to pick the units with a high potential for re-use

3

Supply chain 2. Cooperations with network-partners (for collection, preparation for re-use, research & development, distribution and customer services)

3

Supply chain 3. Constant supply of the right mix of appliances 2


2

Supply chain 5. Ensure training and employment opportunities (long-term employment & training for disadvantaged or volunteering people)

2

Supply chain 6. Access to high quality used equipment (local or import) 1

Supply chain 7. Diversified portfolio of supplying customers 1

Supply chain 8. Being a Microsoft Registered Refurbisher (reduced prices for Microsoft licensed systems)

1

Supply chain 9. Combination of recycling and preparation for re-use in-house enables optimization of value recovery

1

Supply chain 10. Project management: planning, monitoring and reporting competences 1

Supply chain 11. Control of product and process quality during preparation for re-use 1

Supply chain 12. Short technology cycles (if users swap equipment regularly, it becomes available for preparation and redistribution for re-use)

1

Offer 13. Low pricing of products distribute for re-use 3

Offer 14. Support of recipients in infrastructure development (to accelerate the adaptation and delivery of equipment)

3

Offer 15. Capability to offer a certain range of products to customers on a continuous basis (continuity of supply)

1

Offer 16. Customer services to both supplying and receiving customers 1

Offer 17. Ability to offer attractive sustainable and socially responsible services and/or products to suppliers and/or recipients (given an increasing public interest in sustainable production and consumption)

1


4

Finance 19. Budget provided by the government 1

Finance 20. Cost effective preparation for re-use process 1 Table 12: Success factors for the Social Enterprise mo del

29




Supply chain 1. Access to sufficient volumes of used equipment at good quality and at low costs

3


3

Supply chain 3. No consideration of re-use in product designs 3 Supply chain 4. Access to the right products at good quality (diversified assortment of

product lines) 1

Supply chain 5. Competition from informal sector or un-licenced recyclers. Some of them pay for used equipment, which also increases procurement costs for compliant institutions

1

Supply chain 6. Public and industry organized collection and recycling schemes do not consider re-use in their design (no value conserving collection; logistical and financial discrimination of retailers who contribute EEE for re-use)

1

Supply chain 7. Retailers regard resale of used equipment as competition and are therefore reluctant to provide product returns for preparation for re-use

1

Supply chain 8. Difficult and expensive procurement of spare parts for older equipment 1 Supply chain 9. Duration of testing procedures: up to 3 days for large household

appliances, 3-4 days for entire preparation for re-use process 1

Supply chain 10. Societal discussion on the soundness of re-use of appliances (producers promote the selling of new appliances, not re-use)

1

Supply chain 11. Technical expertise needed for preparation for re-use of ICT equipment 1 Supply chain 12. Difficulty to recruit skilled engineers 1 Supply chain 13. Better prices can be made by selling used ICT products to recyclers than

by preparing it for re-use 1

Supply chain 14. Social and educational purpose sometimes conflicts with requirements of efficient operations: education and assistance of unskilled workers demands time, personnel and financial resources

1

Supply chain 15. Variety of different standards and lack of global re-use standard with clear definitions

1

Supply chain 16. Lack of legislation that sets incentives for re-use and enforces re-use 1 Supply chain 17. Regular software up-date requirements imply faster hardware up-grades

(Windows 7 will require greater amounts of Ram that is more expensive for older computers)

1

Supply chain 18. Complex legal and regulatory situation leads to administrative effort and costs for collection, preparation for re-use and redistribution

1

Offer 19. Too many warranty returns (especially for washing machines) 1 Customers 20. Market for products: prices of new EEE decrease, approaching the level of

refurbishing costs. Demand for used EEE decreases) 3

Customers 21. Economic situation: users renew their ICT assets less often and recipients buy less during recession

1

Customers 22. Eligible recipients demand increasingly new equipment, which is more economical and flexibly applicable in the public schools

1

Customers 23. Economic and technical constraints of customers (limited financial resources for procurement of equipment, limited infrastructure for proper use of equipment)

1


2

Finance 25. Labour costs 1 Table 13: Barriers for the Social Enterprise model

30


3.2.2 Generic success factors and barriers

Given the methodical limitations discussed above, it is difficult to derive generic success factors and

barriers from the lists presented in these tables.

However, the interviews reveal tendencies and also confirm existing knowledge and experience with

regards to success factors and barriers for re-use. Based on this and own interpretation, the project

sub-group derived a list of generic re-use success factors and barriers from the interviews, which is

presented in Table 15 and Table 16. These factors are considered important for all four re-use

operating models.

The two lists with the generic success factors and barriers (Table 15 and Table 16) were provided to

all interview partners24, who participated in this study and represent the different case study

organizations; the interviewees were asked to rank25 the generic success factors and barriers with

regards to their importance. It should be noted, that all of these factors and barriers are considered of

importance for re-use operating models. But the ranking enables a prioritization of the results.

The table below shows the distribution of the respondents to the survey. The composition of the

respondents reflects, with minor deviations, the distribution of the case studies for the four re-use

operating models (compare Table 3). Therefore, the results can be considered representative for the

case study set.

Africa Latin

America

North

America

Europe total in %

Networking Equipment

Recovery

0 0 1 2 3 13%

IT Asset Management 4 0 1 2 7 30%

Close the Digital Divide 1 0 2 2 5 22%

Social Enterprise 0 1 3 4 8 35%

total 5 1 7 10 23 100%

in % 22% 4% 30% 43% 100%

Table 14: Distribution of respondents to survey for ranking of success factors and barriers

The tables below contain the list of the generic success factors and barriers with the ranking that

resulted from the survey.

24 For some case study organizations, interviews were conducted with several representatives of the same organization. This explains why the number of respondents for IT Asset Management model organizations headquartered in Africa is higher than the number of respective actual case studies (compare Table 3). 25 For the analysis, a weighting was attributed to each rank (rank 1 was weighed 13 - or 15 respectively for the barriers -, rank to was weighted 12, rank 3 was weighted 11 and so forth. This allowed to derive an average weighing for each success factor (and barrier) and to rank them accordingly.

31



Barriers Rank

Supply chain 1. Lack of legislation that sets financial incentives for re-use and enforces re-use 1 Supply chain 2. Access to sufficient volumes of used equipment at good quality and at low costs 2 Supply chain 3. Bad re-use practices (“shame re-use”) lead to reluctance towards re-use 3 Supply chain 4. Competition from informal sector and from un-licenced recyclers (some of them

pay for used equipment, which also increases procurement costs for compliant institutions)

4


5


626

Supply chain 7. Unpredictability in supply and demand 6 Customers 8. Societal discussion on the soundness of re-use of appliances (producers

promote the selling of new appliances, not re-use) 7

27


7


8

Supply chain 11. No consideration of re-use in product designs 9 Supply chain 12. Variety of different standards and lack of global re-use standard with clear

definitions 10

Customers 13. Market for products: prices of new EEE decrease, approaching the level of refurbishing costs. Demand for used EEE decreases

11

Finance 14. Logistics costs 12 Finance 15. Labour costs 13

Table 15: Generic barriers derived from the intervi ews and ranked by the interviewees


Success factors Rank

Offer 1. Quality and reliability of products distributed for re-use 1 Supply chain 2. Control of product and process quality during preparation for re-use 2 Supply chain 3. Access to high quality used equipment (local or import) 3 Supply chain 4. Secure user data sanitation and/or OEM brand protection 4 Offer 5. Ability to offer attractive sustainable and socially responsible services and/or

products to suppliers and/or recipients (given an increasing public interest in sustainable production and consumption)

528


5

Supply chain 7. Transparency & track-and-trace capability from collection to preparation for re-use to re-distribution (and to recycling and disposal if relevant) of used products.

6


7

Offer 9. “One-stop-solution” (ability to offer the suppliers one single contact for collection, preparation for re-use and recycling of used products)

8

Supply chain 10. Turnover rate (short storage duration given a fast deterioration of asset value) 9 Supply chain 11. Throughput volumes 10 Supply chain 12. Value conserving logistics 11 Finance 13. Low pricing of products distributed for re-use 12

Table 16: Generic success factors derived from the interviews and ranked by the interviewees

26 The fact that “some OEMs do not approve of the sale of used products” received the same average weighing as the “unpredictability in supply and demand”. Therefore, these two barriers share rank 6. 27 The “societal discussion on the soundness of re-use” received the same average weighing as the “complex legal and regulatory situation”. Therefore, these two barriers share rank 7. 28 The “stakeholder relationship management” received the same average weighing as the “ability to offer an attractive sustainable service and/ or product”. Therefore, these two success factors share rank 5.

32


Figure 10 presents the barriers with the weighted average ranking.

Figure 10: Generic barriers in order of importance

The analysis reveals four groups of barriers for re-use organizations. They are discussed below.

• 1st priority - barriers related to the access to sufficient volumes of used equipment:

The survey results confirm that the sourcing of sufficient volumes of used good quality

equipment is a key challenge for every organization, who engages in re-use of EEE (rank 2).

Except for ranks 3 and 4, the first seven barriers in the priority ranking can all be directly

related to the difficulty in accessing EEE with re-use potential. The survey results indicate that

the legal framework conditions today not optimally support re-use organizations in accessing

sufficient volumes for preparation for re-use: the lack of legislations, which incentivize and

enforce re-use is seen as the most impactful barrier (rank 1). Moreover, public and industry

organized collection and recycling schemes do not consider or support re-use in their design

(rank 5). Instead, re-use organizations often need to directly compete with recyclers for EEE,

which has a potential for re-use. However, competition with recyclers is considered less critical

by the respondents (rank 8). A greater challenge is seen in the fact that some OEMs prohibit

the redistribution of their products, once they have taken them back from their customers (rank

6). Instead, they demand dismantling and recycling even if products have a potential for re-

use. OEMs prevent used products from re-entering the market to protect new products against

competing with low-priced used equipment. However, re-use organizations argue, that used

products are distributed to other markets and customer segments than new EEE. The

Unpredictability in supply and demand (rank 629) can be interpreted as a consequence of the

different factors hampering access to used EEE with potential for re-use.

• 2nd priority - barriers related to informal and illegal re-use practices:

A considerable barrier stems from informal and illegal practices, so called “shame re-use”

(rank 3) like the export of e-waste, which has been declared as functioning EEE for re-use.

This e-waste most often ends up being informally recycled in developing countries causing

29 The fact that “some OEMs do not approve of the sale of used products” received the same average weighing as the “unpredictability in supply and demand”. Therefore, these two barriers share rank 6.

33


damages to the health of the people who process it and to the surrounding environment30.

Such practices lead to a critical public attitude towards re-use and thereby also negatively

impact organizations that live up to socially and environmentally sound re-use practices. The

societal discussion on the soundness of re-use and the promotion by some producers of the

selling of new instead of used appliances (rank 7) was, among other aspects, also activated

through the revelation of problematic re-use practices. How customers, OEMs and other

stakeholders perceive the quality and soundness of re-use activities and used products seem

to constitute a serious challenge for re-use organizations, since it directly influences the

behaviour of potential suppliers and customers, i.e. the offer of used equipment for preparation

for re-use as well as the demand for products, which have been prepared for re-use.

Besides the negative impact on the image of re-use, informal actors also distort competition in

the re-use sector, which is seen as one of the most impactful barriers for compliant re-use

organizations (rank 4); informal actors save on costs, which accrue from implementation of

effective social and environmental regulations, and compete with compliant re-use

organizations in both access to used equipment and redistribution of EEE prepared for re-use.

• 3rd priority - barriers related to regulations, standards and product design:

Another challenge consists in the variance and complexity in regulations leading to

administrative costs (rank 731), particularly for re-use organizations, which operate

internationally. For instance, in some cases, it is more economical to ship used EEE to

international testing and refurbishment centres instead of testing all products locally. However,

depending on the countries of origin and of destination, such transboundary movements of

used EEE are significantly hampered by national and international regulations.

The existence of a variety of different standards and the lack of a globally recognized re-use

standard makes it difficult to refer to common definitions of good re-use practices and to

enhance transparency and quality control in the re-use sector. However, this barrier was not

considered of most urgent priority in the survey (rank 10).

Also, the incomplete consideration of re-use in product design is not ranked among the most

important barriers for re-use (rank 9). The investigation of the different case studies for the

present analysis showed, that re-use organizations are capable of assessing the quality and

design of used products and of developing adequate efficient processes to prepare these

products for re-use. However, this ranking does not deny the fact that re-use is not accurately

considered in new-product designs today.

As mentioned above, the competition with recyclers for used EEE also ranks lower (rank 8).

• 4th priority - barriers related to costs:

All barriers directly related to costs (logistics and labour costs) or to market prices for used

equipment were ranked lowest by the case study partners (ranks 11-13).

30 For a detailed discussion of the negative social and environmental effects of e-waste processing in developing countries see Cobbing (Cobbing, 2008). 31 The “societal discussion on the soundness of re-use” received the same average weighing as the “complex legal and regulatory situation”. Therefore, these two barriers share rank 7.

34


The next figure presents the success factors with the weighted average ranking.

Figure 11: Generic success factors in order of impo rtance

The success factors can be clustered into four groups and can be discussed in relation to the barriers

outlined above.

• 1st priority - success factors related to product and process quality:

Quality and reliability of products distributed for re-use is ranked by far as most important

success factor (rank 1) followed by the control of product and process quality during

preparation for re-use (rank 2), the access to high quality used equipment (rank 3) and the

secure destruction of user data (rank 4). This prioritization of product and process quality

factors can directly be related to the ranking of the barriers. Strict control of product and

process quality and reliable guarantee of data and brand security enables re-use

organizations to differentiate themselves from the informal sector and non-compliant actors,

which are perceived as critical barriers. Moreover, proven quality of preparation-for-re-use-

processes and products offered for re-use serves as a means to dissolve the negative public

perception of the re-use sector.

• 2nd priority - success factors related to stakeholder relationships:

Interestingly, stakeholder relationship management was ranked as relatively important for the

success of re-use operations (rank 5). Since re-use organizations deal with “waste” they are

more exposed to public attention than other enterprises and organizations. Gaining and

confirming the trust of the different stakeholder groups then becomes a critical success factor.

Careful communication and convincing action are also a means to positively influence the

above mentioned societal discussion on the soundness of re-use and the image that

consumers have of used products.

The general boom in sustainable production and consumption is seen as an opportunity and

the ability to offer a sustainable or “green” product and service seems to play an important role

in stakeholder communications and marketing measures (rank 532).

32 The “stakeholder relationship management” received the same average weighing as the “ability to offer an attractive sustainable service and/ or product”. Therefore, these two success factors share rank 5.

35


• 3rd priority - success factors related to documentation and reporting:

The third group of success factors focuses on the enhancement of transparency in the life

cycle of used products. The ability to secure a proper recycling solution for the products that

have been distributed for re-use (rank 7) is especially important, when products are distributed

in countries, where recycling infrastructure is not developed yet to satisfactory standards. This,

together with track-and trace capability for products collected and prepared for re-use from

collection to recycling (rank 6), plays an important role in gaining trust of stakeholders in re-

use operations. A transparent documentation and reporting of the preparation for re-use value

chain to the recycling destination of the distributed products might also contribute to releasing

the reluctance of large corporate users to provide their EEE to re-use organizations.

• 4th priority - success factors related to costs and revenues:

Analogous to the assessment of the barriers, cost and revenue related success factors, i.e.

turnover rate (rank 9), throughput volumes (rank 10) and low pricing of products distributed for

re-use (rank 12), were ranked least important. Also, value conserving logistics is ranked

relatively low (rank 11) - this is probably regarded as a standard condition for the success of

re-use operations. Moreover, the ability to offer a one-stop-solution including collection,

preparation for re-use and recycling is considered less important (rank 8). This might be

explained by the fact that most re-use organizations cooperate with partners to offer and

deliver these different services to their customers (and suppliers).

36


4 Conclusions and recommendations

This study identified four generic re-use operating models for ICT products and large household

appliances:

1. The Networking Equipment Recovery model

2. The IT Asset Management model

3. The Close the Digital Divide model

4. The Social Enterprise model

On a first-level, the models differentiate from each other based on their financial orientation; whereas

the two first types are for-profit oriented, the Close the Digital Divide and the Social Enterprise model

pursue both a not-for profit purpose. They aim to provide marginalized people with access to ICT

products and to the internet or to affordable household appliances and to create employment and

education opportunities for disadvantaged people.

Second, these operating models differ in terms of their offerings and customer segments. The

Networking Equipment Recovery model offers refurbishment and redeployment services on large

networking equipment mainly for OEMs. The IT Asset Management model specializes in asset

recovery services for desktop and notebook computers for miscellaneous large corporate users. Close

the Digital Divide organizations also refurbish desktop and notebook computers, but they distribute

them at low prices to eligible institutional recipients in developing countries. Social Enterprises, finally,

prepare ICT or large household appliances (and consumer electronics) for resale through charity

outlets to individual users.

The identified models constitute generic ways to structure re-use operations along the four dimensions

of the analytical framework (“supply chain”, “offer”, “customers”, “finance”). Different entities can utilize

one or multiple combinations of these models.

It should be noted, that the difference between the two for-profit-models is not definite and different

views were hold in the sub-group. Even though the present division into the Networking Equipment

Recovery model and the IT Asset Management model follows from the theoretical application of the

analytical framework, the two models might overlap a lot in practice. An alternative categorization

would be to distinguish only three models: one for-profit-model and two not for profit models.

A list of success factors and barriers for the operating models was derived from the case study

interviews. The analysis revealed some clearly specific success factors and barriers for the different

models. For instance, the competence to provide for capacity building support in the installation,

maintenance and use of ICT-equipment is critical for Close the Digital Divide organizations, since they

distribute to recipients in developing countries, who often lack the infrastructure and experience to

ensure an optimal use of these technologies.

Based on a comparison of the specific success factors and barriers, a list of generic success factors

and barriers was identified, which are relevant for each re-use operating model. Being aware of the

methodical limitations, this list does not claim to be exhaustive. However, the interview data represent

37


the perception of a diverse set of re-use organizations, which live up to good re-use practices and

belong to the leading actors in their respective segments.

The identified generic re-use success factors and barriers were ranked by the interviewees with

regards to their importance. On the one hand, the difficulty in accessing sufficient volumes of good

quality used equipment and the lack of legislations, which support, incentivize and - if necessary -

enforce this access, were identified as most impactful barriers. On the other hand, the control and

securing of product and process quality were ranked as most important success factors. Re-use

organizations, which adhere to good re-use practices, differentiate themselves through quality

guarantee from non-compliant, informal competitors. Moreover, proven quality strengthens confidence

in re-use of important stakeholders like suppliers, customers, authorities and the general public.

The lack of a globally recognized re-use standard was ranked 10th out of 13 ranks. However, in the

interviews, all case study partners affirmed, that they would welcome and support the development of

a globally recognized re-use quality standard, since such a standard would enhance transparency in

the re-use sector and, thereby, also support a more positive societal perception of re-use.

Based on the findings outlined above, the project sub-group makes the following three

recommendations to the StEP initiative:

1. Support the development of a globally recognized re-use quality standard.

Despite the low ranking in the prioritization-survey for the barriers, the sub-group suggests,

that StEP sticks to the objective of supporting the development of a re-use quality standard,

because such a standard could both facilitate the implementation of success factors and

reduce the impact of barriers. For instance, a certified compliance with a globally recognized

standard would serve as a documented proof and signal for controlled process and product

quality, which was ranked as a first priority success factor.

The decision, whether such a standard should be developed by StEP itself or whether existing

standardization initiatives should be supported needs further discussions among the StEP

members. However, in either case the support of the development of a re-use standard should

be based on further research on best re-use practices (see below) and on cooperation with

respective actors and bodies who work on re-use standardization.

Moreover, the sub-group suggests that StEP focuses on two aspects particularly in its work on

and input to standardization and regulation work. First, standardization work and regulations

should consider specific and generic success factors and barriers for re-use operating models.

It should facilitate success factors (such as documented quality control) and reduce barriers

(such as administrative burdens imposed on transboundary movements of used equipment,

which is destined for function testing or for controlled re-use) where possible. And second,

coordination and harmonization of different standards and regulations33 should be enhanced.

33 Examples of regulations and standards, which impact re-use are «the Basel Convention on the Control of transboundary Movements of Hazardous Wastes and their Disposal» (Conference of the Parties to the Basel Convention, 1992), «the Directive 2002/96/EC of the European Parliament and of the Council of 27 January 2003 on waste electrical and electronic equipment (WEEE)» (European Parliament and Council of the European Union, 2003), «the Guideline on environmentally sound testing, refurbishment, & repair of used computing equipment» (PACE - Partnership for Action on Computing Equipment, 2011) or the «PAS141:2010» (BSI, British Standards Institution, 2010).

38


Different standards and regulations should not conflict each other. For instance, if re-use is

explicitly given priority in a WEEE-legislation, this should also be implemented in public and

industry organized collection and recycling schemes. Such implementation, however, depends

on cooperation and involvement of all concerned parties.

2. Support the definition of quality measures for the collection, preparation for re-use and

distribution (including export) processes.

The analysis has affirmed the importance of quality control for the success of re-use operating

models. The sub-group suggests that StEP defines concrete quality measures for the

collection, preparation for re-use and distribution of used EEE, which could be provided as

input or recommendations to the work on a standard and on regulations. These quality

measures should take into account differences between designs of re-use operating models

and between product categories. If useful, quality measures should be differentiated for

different re-use operating models and product categories. The definition of measures for

control and documentation of process and product quality should rely on standards that have

already been developed for single processes (e.g. PAS 141:2010 developed by BSI, British

Standards Institution, 2010) or single product types (e.g. the «guideline on environmentally

sound testing, refurbishment, & repair of used computing equipment» developed by PACE -

Partnership for Action on Computing Equipment, 2011).

3. Support the amelioration of the access to used equipment with re-use potential for re-use

organizations.

Access to sufficient volumes of good quality used equipment was ranked highest in

importance for both success factors and barriers by the interviewees, meaning that access to

used EEE with re-use potential is a critical precondition for the success of any re-use

operating model and at the same time, this access is still significantly hampered. The sub-

group therefore suggests that StEP undertakes further research in how the access to used

EEE can be improved and what framework-conditions should be considered when facilitating

this access for re-use organizations; e.g. re-use organizations complying with a certain re-use

standard (see recommendation Nb. 1) could be granted priority in access to public collection

sites for sorting of equipment with potential for re-use. This work would most probably involve

legal and regulative aspects and investigation of public or industry organized collection

schemes. Again, cooperation with respective actors and bodies is recommended.

With the investigation of re-use operating models, the present study has entered a widely unexplored

field, which uncovered the potential for further research. In relation to the recommendations presented

above, the sub-group suggests focusing on two areas for further research or projects:

1. Best practices in re-use

The present study has identified success factors and barriers; this opens the question of how

these success factors are and can best be implemented. Therefore, a potential for further

research consists in the analysis of best practices for the implementation of critical success

factors, such as track and trace documentation of product flows from collection to preparation

39


for re-use to distribution to recycling and final disposal. This best practices investigation could

build the basis for deriving quality measures for re-use operations (see recommendation Nb.

2), serve as input for the development or enhancement of a re-use quality standard (see

recommendation Nb. 1) or be used to build a benchmarking reference framework for re-use

organizations.

2. The impact of existing regulations and standards on re-use

The access to sufficient volumes of used EEE, which was identified as a critical barrier, is

largely influenced by the regulative frameworks that re-use operating models operate in. As

mentioned above, a variety of regulations and standards exist that impact re-use operations.

In order to integrate considerations of success factors and barriers as identified in the present

study into existing regulations and into the work on a re-use standard (see recommendation

Nb. 1), an overview over different relevant regulations, collection and recycling schemes and

existing standards as well as a detailed understanding of the concrete impact of these on re-

use operations is necessary. An understanding of the incentives and functioning logics driving

these regulations and collection and recycling systems would enable the derivation of

recommendations with regards to improving the access to EEE with potential for re-use (see

recommendation Nb. 3).

40


Bibliography

Baker, S., & King, A. (7. May 2007). Organising Reuse: Managing the Process of Design For

Remanufacture (DFR). POMS 18th Annual Conference Dallas, Texas, U.S.A.

BSI, British Standards Institution. (2010). PAS141:2010. Specification for the processing for reuse of

waste and used electrical and electronic equipment (WEEE and UEEE). England, England:

British Standards Institution (BSI).

Cobbing, M. (2008). Toxic Tech: Not in Our Backyard. Uncovering the Hidden Flows of e-Waste.

Amsterdam: Greenpeace International.

Conference of the Parties to the Basel Convention. (1992). Basel Convention on the Control of

transboundary Movements of Hazardous Wastes and their Disposal. Geneva: Secretariat of

the Basel Convention.

European Parliament and Council of the European Union. (2003). Directive 2002/96/EC of the

European Parliament and of the Council of 27 January 2003 on waste electrical and electronic

equipment (WEEE). Bruxelles: European Parliament and Council of the European Union.

Luger, T. (2010). Referenzprozessbasierte Gestaltung und Bewertung von Reverse Supply Chains.

Braunschweig: Dissertation, Technische Universität Braunschweig.

O'Connell, M., Fitzpatrick, C., & Hickey, S. (2010, May 17-19). Investigating reuse of B2C WEEE in

Ireland. Sustainable Systems and Technology (ISSST), pp. 1-6.

Osterwalder, A., Pigneur, Y., & Tucci, C. L. (Volume 15 2005). Clarifying business models: origins,

present and future of the concept. Communications of AIS.

PACE - Partnership for Action on Computing Equipment. (2011). Guideline on environmentally sound

testing, refurbishment, & repair of used computing equipment. Geneva: Secretariat of the

Basel Convention.

StEP - Solving the E-Waste Problem. (5. March 2009a). One Global Understanding of Re-Use –

Common Definitions. StEP White Paper.

StEP - Solving the E-Waste Problem. (2009b). Recycling - from E-Waste to Resources. Berlin: United

Nations Environment Programme & United Nations University.

41


List of interviews Date Interviewee Organization Head-

quarter Contact Interview

er (Empa) 1 20101021 Haley Bowcock (Environmental Advocacy Officer,

Computer Aid International) David Griffiths (General Production Manager) Marcos Gomes Da Silva (Director of Operations)

Computer Aid England Personal Ramon Kissling

2 20101029 Guillermo Albarran (project coordinator) Chilenter Chile Telephone Lina Uribe 3 20101029 Sepp Eisenriegler (Managing Director of the

„Reparatur- und Service-Zentrum R.U.S.Z, President of the Austrian National Association for Social Economy RepaNet, President of the European Association for Social Economy RREUSE)

Reparatur- und Service-Zentrum R.U.S.Z

Austria Telephone Ramon Kissling

4 20101102 Angel Camacho (Coordinator e-Waste) Computadores para Educar

Columbia Telephone Lina Uribe

5 20101102 Willie Cade, Owner and CEO of PC Rebuilders & Recyclers

PC Rebuilders & Recyclers

USA Telephone Ramon Kissling

6 20101108 Charles Brennick (Founder and Director of InterConnection)

InterConnection USA Telephone Ramon Kissling

7 20101108 Thomas Holberg (Director) Dataserv Germany Telephone Ramon Kissling

8 20101111 Pat Furr (Founder/ CEO) Computers for Classrooms


9 20101112 Jeff Borrman, Datec Technologies Ltd. Datec Technoligies Ltd.

Scotland Telephone Ramon Kissling

10 20101119 Jim Lynch (Director, Computer Recycling & Reuse and GreenTech Program)

TechSoup Global


11 20101119 Tim Wagendorp (Komosie, Project Manager Revisie)

Komosie Belgium Personal Ramon Kissling

12 20101123 Martin Reddy (WEEE Recycling Manager) Rehab Recycle Ireland Personal Ramon Kissling

13 20101123 Eoghan Crosby, Technical Director Camara Ireland Personal Ramon Kissling

14 20101208 Jan Ryckaert (Coordinator of the Revisie re-use centre of ‘Den Azalee’)

Den Azalee Belgium Personal Ramon Kissling

15 20101208 David Leyssens, Project Coordinator Close the Gap Belgium Personal Ramon Kissling

16 20101209 Joep van Loon, Owner and Director of Flection International b.v.

Flection Int. b.v. The Netherlands

Personal Ramon Kissling

17 20101213 Jean Cox-Kearns (Director of Compliance, Dell, Global Takeback)

Dell USA Telephone Ramon Kissling

18 20101217 Elaine Coleman, Sales & Marketing Manager Bryson Electrical Recycling

Bryson Electrical Recycling

Northern Ireland

Personal Ramon Kissling

19 20110110 Timothy Anderson (President & Founder of World Computer Exchange, WCE-Canada Executive Director)

World Computer Exchange


20 20110111 Angela Haas (President WITS Inc) WITS Inc USA Telephone Ramon Kissling

21 20110113 John Dickenson (Vice-President Business Development, AER Worldwide)

AER Worldwide USA Telephone Ramon Kissling

22 20110124 Andrew Craig, Managing Director Mico Mico South Africa Personal Ramon Kissling

23 20110125 Justin van der Walt (owner and director, Just PC’s)

Just PC's South Africa Personal Ramon Kissling

24 20110128 Marianne Barnard (Regional Operations Manager LetMeRapair)

LetMeRepair South Africa

South Africa Personal Ramon Kissling

25 20110128 Willie Immelman (National Site Manager – eWaste, LetMeRecycle)

LetMeRecycle South Africa

South Africa Personal Ramon Kissling

26 20110131 Dr. Tom Musili, (Founder and Executive Director) Seth Munyambu (eWaste Management Officer)

Computers for Schools Kenya

Kenya Personal Ramon Kissling

27 20110203 Daudi Morara Okioma (CEO Camara Education Ltd Kenya)

Camara Education Ltd Kenya


28 20110204 Alan Crosby (CEO EACR) East African Computer Recycling


29 20110216 Marie Zide (Ericsson) Ericsson Sweden Telephone Ramon Kissling

30 20110307 Gideon Schroeder (Cisco, Recycling Program Manager for the Americas)

Cisco USA Telephone Ramon Kissling

42


Appendix

Appendix 1 - Interview-guide

Project: Best practices in re-use operating models

Document: Interview guide

Content: …

Interview: …

Date of interview: …

Interviewee: …

Interviewer: …

0.0 Profile

0.1 Name • …

0.2 Homepage • …

0.3 Year of foundation • …

0.4 Location of headquarter • …

0.5 Location of subsidiaries • …

0.6 Organization type • …

0.7 Corporate mission • …

43


1.0 Personnel

1.1 Total number of employees in FTE (full time equivalent)

• …

1.2 Number of employees in operations • …

1.3 Expertise in operations • …

1.4 Regular education and training • …

2.0 Products & services offered

2.1 Assortment • …

2.2 Product lines in percentages of total products sold

• …

2.3 Minimal hardware requirements • …

2.4 Average age of used products • …

2.5 Average re-use lifespan • …

2.6 Operating system • …

2.7 Product warranty • …

2.8 Product labels/ certificates • …

2.9 Services offered to supplying customers

• …

2.10 Services offered to receiving customers

• …

3.0 Procurement

3.1 Suppliers • …

3.2 Quantity of product supply in # of items per year

• …

3.3 Potential for re-use in % of total annual product supply

• …

3.4 Price level of product supply average price per item in USD

• …

4.0 Processes

4.1 Processes performed in-house by (name of case study partner)

• …

4.2 Processes performed by Partners • …

4.3 Function testing technology • …

4.4 Product safety testing technology • …

4.5 Information & documentation system (IDS) for recording, storage & administration of data

• …

4.6 Information tracked • …

4.7 Quality Management System • …

44


5.0 Marketing & Distribution

5.1 Total annual turnover in total number of items sold per year

• …

5.2 Market segments • …

5.3 Distribution channels • …

5.4 Average product resale prices • …

5.5 Average product margin in % of resale price

• …

5.6 Average service prices processing fees per item

• …

6.0 Finances

6.1 Total annual income • …

6.2 Revenue streams in % of total revenues

• …

6.3 Cost pools in % of total costs

• ...

6.4 Profit margin total revenues minus total costs in % of total revenues

• …

6.5 Average annual growth over the last 5 years

• …

7.0 Main success factors and barriers

7.1 Success factors • …

7.2 Barriers • …

Thank you for your valuable contribution!

45


Appendix 2 - List of success factors and barriers m entioned in the interviews

See tables on the following pages.

46


Framework Success factor NER34

IAM CDD SE total

Supply chain 1. Access to high quality used equipment (local or import) 0 4 3 1 8

Supply chain 2. Constant supply of the right mix of appliances 0 0 0 2 2

Supply chain 3. Diversified portfolio of supplying customers 0 1 0 1 2

Supply chain 4. Contracts with compliance schemes (or operation of own compliance scheme) for collection with “cherry-picking” option. 0 0 0 3 3

Supply chain 5. Qualification as OEM authorized take-back partner 0 2 0 0 2

Supply chain 6. Being a Microsoft Registered Refurbisher (reduced prices for Microsoft licensed systems) 0 0 0 1 1

Supply chain 7. Securing of a proper recycling solution for the equipment, which is distributed for re-use 0 0 4 2 6

Supply chain 8. Combination of recycling and preparation for re-use in-house enables optimization of value recovery 0 0 0 1 1

Supply chain 9. Project management: planning, monitoring and reporting competences. 0 0 1 1 2

Supply chain 10. Control of product and process quality during preparation for re-use 0 4 2 1 7

Supply chain 11. Transparency & track-and-trace capability from collection to preparation for re-use to re-distribution (and to recycling and disposal if relevant) of used products.

0 1 0 0 1

Supply chain 12. Secure user data sanitation and/or OEM brand protection 1 2 1 0 4

Supply chain 13. Certified compliance with environmental legislation and regulations 0 2 1 0 3

Supply chain 14. Throughput volumes 0 1 0 0 1

Supply chain 15. Turnover rate (short storage duration given a fast deterioration of asset value) 0 1 0 0 1

Supply chain 16. Diversified know-how and experience of employees/ volunteers stuff 0 2 1 0 3

Supply chain 17. Ensure training and employment opportunities (long-term employment & training for disadvantaged or volunteering people) 0 0 0 2 2

Supply chain 18. Geographic coverage (national or international network for collection, preparation for re-use and/or re-distribution) 1 2 2 0 5

Supply chain 19. Value conserving logistics 0 1 0 0 1

Supply chain 20. Cooperation with -partners (for collection, preparation for re-use, research & development, distribution and customer services)

1 1 1 3 6

Supply chain 21. Short technology cycles (if users swap equipment regularly, it becomes available for preparation and redistribution for re-use) 0 1 0 1 2

Offer 22. Quality and reliability of products distributed for re-use 0 2 1 0 3

Offer 23. Low pricing of products distribute for re-use 0 0 1 3 4

Offer 24. Capability to offer a certain range of products to customers on a continuous basis (continuity of offered assortment) 0 0 0 1 1

Offer 25. “One-stop-solution” (ability to offer the suppliers one single contact for collection, preparation for re-use and recycling of used products)

0 0 1 0 1

Offer 26. Support of recipients in infrastructure development (to accelerate the adaptation and delivery of equipment) 0 0 0 1 1

Offer 27. Capacity building (ICT trainer and user training) 0 0 3 0 3

Offer 28. Customer services to both supplying and receiving customers 0 2 0 3 5

Offer 29. Product sales and service contacts with obligation for product return and take-back at end-of-use 0 0 1 0 1

Offer 30. 1Ability to offer attractive sustainable and socially responsible services and/or products to suppliers and/or recipients (given an increasing public interest in sustainable production and consumption)

0 0 1 1 2

Customers 31. Diversified portfolio of customer segments 0 1 1 0 2

Customers 32. Identification of eligible recipients 0 0 1 0 1


1 3 2 4 10

Customers 34. Local presence for provision of technical support, education and training services and take-back for recycling and disposal services (either through local subsidiaries or partners or own staff temporarily visiting and consulting the recipients)

0 0 3 0 3

Customers 35. Capability to adapt quickly to the market 0 1 0 0 1

Finance 36. Budget provided by the government 0 0 0 1 1

Finance 37. Cost effective preparation for re-use process 0 0 2 1 3

Finance 38. Volunteer labour (low labour costs) 0 0 1 0 1

total 4 34 34 34 106

Table 17: Success factors with number of mentions b y case studies for the different operating models

34 NER = Networking Equipment Recovery Model; IAM = IT Asset Recovery Model; CDD = Close the Digital Divide Model; SE = Social Enterprise Model

47


Framework Barrier NER IAM CDD SE total

Supply chain 1. Access to sufficient volumes of used equipment at good quality and at low costs 0 1 3 3 7

Supply chain 2. Access to the right products at good quality (availability of a diversified assortment of product lines) 0 1 0 1 2

Supply chain 3. Competition with recyclers for supply of used equipment (some recyclers pay for used equipment) 0 0 1 3 4

Supply chain 4. Competition from informal sector and from un-licenced recyclers (some of them pay for used equipment, which also increases procurement costs for compliant institutions)

0 0 2 1 3


0 0 1 1 2

Supply chain 6. Retailers regard sale of used EEE as competition and are reluctant to provide product returns for preparation for re-use. 0 0 0 1 1

Supply chain 7. Unpredictability in supply and demand. 1 0 0 0 1

Supply chain 8. Lack of sound take-back-, recycling- and disposal-infrastructure in recipient countries. Costs of formal recycling operations exceed revenues generated from sales of sorted materials. Little support from OEMs in developing local recycling systems

0 1 4 0 5

Supply chain 9. Bad re-use practices (“shame re-use”) lead to reluctance towards re-use 0 2 2 0 4

Supply chain 10. Difficult and expensive procurement of spare parts for older equipment 0 0 0 1 1

Supply chain 11. Risk of unsound preparation for re-use by non-certified actors; customers buying OEM branded equipment from such actors, could experience problems with the product, which would negatively impact the OEM’s reputation

1 0 0 0 1

Supply chain 12. Loss of control over re-use, recycling and disposal destination of own branded products; illegal recycling and bad practice recycling of OEM branded products could negatively impact the OEM’s reputation

1 0 0 0 1

Supply chain 13. No consideration of re-use in product designs 0 0 0 3 3

Supply chain 14. Duration of testing procedure: up to 3 days for large household appliances, 3-4 days for entire preparation for re-use process 0 0 0 1 1

Supply chain 15. Societal discussion on the soundness of re-use of appliances (producers promote the selling of new appliances, not re-use) 0 0 0 1 1

Supply chain 16. Technical expertise required for preparation for re-use of ICT equipment 0 0 0 1 1

Supply chain 17. Difficulty to recruit skilled engineers 0 0 0 1 1

Supply chain 18. Better prices can be made by selling used ICT equipment to recyclers than by preparing it for re-use 0 0 0 1 1

Supply chain 19. Social and educational purpose sometimes conflicts with requirements of efficient operations: education and assistance of unskilled workers demands time, personnel and financial resources

0 0 0 1 1


2 1 0 1 4

Supply chain 21. Ban on import of refurbished IT equipment in certain countries 0 0 2 0 2

Supply chain 22. Corruption and lack of governmental enforcement of anti-corruption legislation 1 0 1 0 2

Supply chain 23. Variety of different standards and lack of global re-use standard with clear definitions 0 1 0 1 2

Supply chain 24. Lack of legislation that sets financial incentives for re-use and enforces re-use 0 0 2 1 3

Supply chain 25. Regular software up-date requirements imply faster hardware up-grades (Windows 7 will require greater amounts of Ram that is more expensive for older computers)

0 1 0 1 2

Supply chain 26. Reliability and transparency of reporting systems in recipient countries 0 0 1 0 1

Offer 27. Too many warranty returns (esp. washing machines: 15-20%) 0 0 0 1 1

Customers 28. Market for products: prices of new EEE decrease, approaching the level of refurbishing costs. Demand for used EEE decreases 0 1 2 3 6


1 0 0 0 1

Customers 30. Economic situation: users renew their ICT assets less often and recipients buy less during recession. 0 1 1 1 3

Customers 31. Eligible recipients increasingly demand new equipment, which is more economical & flexibly applicable in the public schools. 0 0 0 1 1

Customers 32. Economic and technical constraints of customers (limited financial resources for procurement of equipment, limited infrastructure for proper use of equipment).

0 0 1 1 2

Finance 33. Labour costs 0 0 0 1 1

Finance 34. Logistics costs 0 1 0 0 1

Finance 35. Funding of services (e.g. capacity building) provided to eligible recipients (fundraising needed) 0 0 1 0 1


0 0 1 2 3

Finance 37. Costs for global take-back for re-use and recycling program for OEMs. 1 0 0 0 1

total 8 11 25 34 77

Table 18: Barriers with number of mentions by case studies for the different operating models

48


Appendix 3 - Survey for ranking of generic success factors and barriers

49


Figure 12: Survey for ranking of generic success fac tors and barriers for re-use operating models

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