April 14, 2008
By Jenny Carless, News@Cisco
What happens to used information technology (IT) equipment after a customer
has returned it for repairs or replaced it with newer equipment? Is it possible
to keep discarded routers and switches out of the landfill?
At Cisco, several organizations across the company work to remanufacture or
recycle as much Cisco equipment as possible. These programs constitute part of
the company's efforts to reduce its carbon footprint and help the environment -
but they also make good business sense.
Remanufacturing Is Big Business
Since 2000, Cisco Capital Remarketing, a business unit within Cisco Capital,
has played a primary role in remanufacturing returned units for reuse. In fiscal
2007, the group remanufactured more than 410,000 units, preventing approximately
4,800 tons of equipment from ending up as toxic waste in landfills around the
Remanufactured units may be redeployed as field replacement units to support
warranty claims or resold as Cisco Certified Refurbished Equipment to new and
The availability of refurbished equipment benefits both the customer and the
manufacturer, according to Joseph Pucciarelli, program director, Technology
Financing & Management Strategies at IDC.
"I see three main reasons why customers find refurbished equipment
attractive," he explains. "The first, which applies particularly to large
enterprises, is that they want to maintain what I call infrastructure
homogeneity; in other words, they want consistency across the network portfolio,
because it's much easier to manage and there are more efficiencies of scale.
"Another driver is availability: they may need the equipment now, but the new
model is back-ordered," he adds. "Finally, of course, price sensitivity is a
Cisco Certified Refurbished Equipment sells for at least 25 percent less than
an equivalent new product, and it comes with the same warranty and SMARTnet
options as new products. It is remanufactured to factory specifications, with
all the latest hardware and firmware upgrades.
From a manufacturer's perspective, there are strong business reasons for
offering refurbished equipment. "Providing certified used equipment demonstrates and reinforces that a manufacturer understands the requirements of those IT managers who have to make hard choices about the speed at which they'll get new technology versus the
complexity of managing their infrastructure," Pucciarelli explains. "So you are reinforcing that you understand how to meet these customers' needs.
"Such programs also allow a manufacturer to support the prices on its new
products," he continues. "By offering used as an option, you're broadening the
spectrum of customers you can serve while maintaining integrity in your pricing
Green Remanufacturing Process
Cisco Capital Remarketing remanufactures and sells more than 2,800 different
individual types of product in technology areas including switching, routing,
security, wireless, unified communications, peripherals and more. It serves
customers in 66 countries across SMB, commercial, government, enterprise and
service provider segments.
Remanufacturing includes four primary steps: systems testing, debugging and
repairs, product engineering upgrades, and cleaning and reconditioning. All
units of Cisco Certified Refurbished Equipment are installed with a current
version of Cisco IOS Software.
"We have a strong environmental focus throughout this process," explains
Frank Atter, senior director, Cisco Capital Remarketing. "For example, each unit
undergoes engineering changes to ensure maximum unit performance - and that
means less maintenance, replacement and energy consumption will be required in
the long term."
The entire remanufacturing process meets environmental directives such as
Restriction of Hazardous Substances Directive (RoHS) and Waste Electrical and
Electronic Equipment Directive (WEEE) in the European Union, ISO 14001and
relevant federal and state regulations in the United States.
Trade-Ins, Take-Backs and Recycling
Some of the equipment remanufactured by Cisco Capital Remarketing comes from
Cisco Worldwide Reverse Logistics, a team that organizes, coordinates, tracks
and manages the return of used equipment under its trade-ins and
Every product received through the trade-in program arrives at one of three
warehouses around the world. Product IDs and serial numbers are logged and then
checked against a demand list for refurbished equipment. Any products that are
ultimately not suitable for remanufacturing undergo ecologically compliant
disposal and recycling processes. In 2007, the program recycled 19 million
pounds of equipment.
Cisco's trade-in program is global, operating in all countries where such programs are allowed. Part of Worldwide Reverse Logistics' responsibilities includes regulatory
"We actually go above and beyond in complying with the WEEE directive, which
is intended to make the producers of electronic waste responsible for the
end-of-life management of that waste," explains Duncan McCann, environmental
compliance manager, Cisco Worldwide Reverse Logistics. "It applies to companies
importing into the European market, and we are attempting to register under WEEE
in all European countries, although we're technically only required to do so in
one, because of our importing procedure."
Take-Back and Recycling
The Cisco take-back and recycling program is in place throughout the 27
European Union member states, Norway, Switzerland and South Africa. "The program is free to customers. Anyone in possession of our equipment can log on to our website and arrange for collection," McCann explains. "Outside those 30 nations, service isn't guaranteed, but we will still try to do everything we can if a customer contacts us about returning equipment."
Green Is Here to Stay
In the coming years, efforts to refurbish and recycle IT equipment are expected to increase as customers place more emphasis on following sustainable business practices.
Partners can play an important role in helping disseminate information about
and implementing manufacturers' refurbishing, recycling and other programs. Even
leasing can be an effective strategy for a customer to improve its environmental
"Partners can help explain the benefits - both business and environmental -
of leasing," explains Benson Chan, senior manager, Cisco Capital Remarketing.
"When a customer leases Cisco equipment, we're responsible for taking it back,
decommissioning it, and remanufacturing or recycling. This lets the customer
focus on their business and not on technology life cycle management."
There are benefits for the partners, too.
"Educating our customers on current environmental regulations, assisting them with product life cycle planning and providing them with green options such as Cisco Certified Refurbished Equipment deepens our customer relationships and gives us a strategic advantage," says Frank Kobuszewski, vice president, Technology Solutions Group at CXtec, a Cisco Silver Certified Partner.
For all these business and environmental reasons, it seems that green is here
"If you look at the number of people in the world and the amount of energy
we're using and producing, there seems to be a long-term requirement for large
amounts of energy, which will keep prices high. That will encourage companies to
continue refurbishing and recycling," Pucciarelli notes. "Whether they
call it 'green IT' or not, the fact is that it just makes good business sense."
Jenny Carless is a freelance writer based in Santa Cruz, CA.